Should the Federal Poverty Line Be $140,000?
December 16, 2025 by
In late November 2025, a viral essay by financial strategist Michael W. Green sparked intense debate about how America measures poverty. Writing in his Substack newsletter, Green argued that the federal poverty line—currently set at approximately $31,200 for a family of four—is dangerously outdated. His provocative claim? The real poverty threshold should be closer to $140,000.
Green’s argument centered on how we calculate the poverty line. In 1963, economist Mollie Orshansky developed the original formula by multiplying the cost of a minimum food budget by three, since food then represented about one-third of family spending. Today, food accounts for only 5-7% of household budgets, while housing, health care, and childcare have grown significantly. Green argued that applying Orshansky’s logic with modern spending patterns would yield a poverty threshold between $130,000 and $150,000.
The essay went viral, drawing coverage from The Washington Post, Fortune, podcasters across the political spectrum, and cable news networks. It struck a nerve with Americans who feel economically squeezed despite statistics suggesting the economy is strong. But is $140,000 really a reasonable poverty line? And what does this debate reveal about how we think about economic well-being in America?
Arguments Supporting Green’s Concerns
- The official poverty measure is fundamentally outdated. Christopher Wimer, co-director of Columbia University’s Center on Poverty and Social Policy, acknowledged that Green “is echoing some things that poverty scholars have talked about for quite a while—the official poverty measure being antiquated.” The formula has not been structurally updated since the 1960s, even as American family budgets have transformed. “Food in budgets has become a much smaller piece,” noted Wimer. “Housing has gotten much more expensive.”
- Middle-class families feel genuinely squeezed. A recent Harris Poll found that 64% of six-figure earners said their income is not a milestone for success but merely the bare minimum for staying afloat. As Libby Rodney, chief strategy officer of the Harris Poll, observed, “Even high earners are financially anxious—they’re living the illusion of affluence while privately juggling credit cards, debt, and survival strategies.” When a teacher and carpenter near Boston earning a combined $150,000 struggle to save for retirement while paying for childcare, something in our economic calculus may be off.
- The “Valley of Death” traps working families. Green highlighted a real phenomenon economists call “benefit cliffs.” As families earn more income, they lose eligibility for programs like Medicaid, the Supplemental Nutrition Assistance Program, and housing assistance—sometimes losing more in benefits than they gain in wages. The Atlanta Federal Reserve has documented these cliffs extensively, showing how a family might be worse off earning $70,000 than $50,000 because of lost benefits. This creates perverse incentives that can trap families in lower-income brackets.
Arguments Against the $140,000 Figure
- The math does not hold up to scrutiny. Economist Noah Smith, in his newsletter Noahpinion, called the $140,000 figure “very silly.” He pointed out that Green used average spending figures as if they were minimum requirements—but averages include plenty of discretionary spending. Green also used cost-of-living data from Essex County, New Jersey, one of the most expensive areas in America, while presenting his numbers as “conservative, national-average data.”
- Green significantly understated typical family income. Economist Jeremy Horpedahl noted that while Green repeatedly cited median household income of $80,000, the relevant figure—median income for married couples with two earners—is approximately $142,000. For the exact family type Green described, half of American families already meet or exceed his proposed threshold.
- Better poverty measures already exist. Scott Winship of the American Enterprise Institute emphasized that the Census Bureau already publishes a Supplemental Poverty Measure (SPM) that accounts for housing, utilities, and government benefits—addressing many of Green’s concerns. The SPM shows a poverty rate of about 12.9%, higher than the official 10.6%, but nowhere near the two-thirds of Americans Green implies are poor.
- Confusing “comfortable” with “not poor” distorts our understanding. Tyler Cowen, an economist at George Mason University, argued that Green conflated the poverty line with a middle-class comfort threshold. As Megan Curran of Columbia’s Center on Poverty and Social Policy put it, “A lot of people up and down the economic spectrum are struggling with affordability issues. [But] how many people have incomes below this real deprivation or suffering threshold—that has declined over time.”
What This Debate Reveals
The passionate response to Green’s essay—both supportive and critical—reveals a genuine tension in American economic life. Economic indicators show historically low unemployment, rising wages, and declining official poverty rates. Yet many families, including those earning six figures, report feeling financially precarious. This gap between statistics and people’s experiences and anxieties deserves serious examination.
The debate also raises fundamental questions about what government should measure and why. The poverty line is not just an academic exercise—it determines eligibility for programs affecting millions of Americans. If we dramatically raised the threshold, should vastly more Americans qualify for government assistance? Or would that fundamentally change what “poverty” means?
Perhaps most importantly, this controversy highlights how different Americans experience the same economy. A $140,000 income means something very different in San Jose, California, than in Little Rock, Arkansas. For a family with young children requiring full-time childcare, that income stretches far less than for families without children or with a stay-at-home parent. These regional and life-stage variations matter enormously for policy.
Discussion Questions
- What should the federal poverty line actually measure—bare survival, basic participation in society, or something else? How should we define economic “need”?
- If families earning six-figure incomes genuinely feel financially stressed, is the problem with how we measure poverty, with the cost of living, with expectations, or with something else entirely?
- The “Valley of Death” concept suggests that earning more money can sometimes leave families worse off due to lost benefits. What responsibility, if any, does government have to smooth these transitions? What are the trade-offs of different approaches?
- Should poverty thresholds vary significantly by region, as they do in the SPM, or should there be a single national standard? What are the advantages and disadvantages of each approach?
- Green’s essay resonated with millions of Americans despite being criticized by many of his fellow economists. What does this disconnect between expert opinion and public sentiment suggest about how we communicate economic data and policy?
As always, we encourage you to join the discussion with your comments or questions below.
Sources
Featured Images: Fortune/Getty Images
[1] Green, Michael W. “Part 1: My Life Is a Lie: How a Broken Benchmark Quietly Broke America.” Yes, I Give a Fig (Substack). 23 Nov. 2025.
[2] Smith, Noah. ‘The $140,000 Poverty Line is Very Silly.” Noahpinion (Substack). 29 Nov. 2025.
[3] Horpedahl, Jeremy. “The Poverty Line is Not $140,000.” Economist Writing Every Day. 26 Nov. 2025.
[4] Winship, Scott. “How Not to Redefine Poverty” and “The Real Math of Survival?” First World Problems (Substack). Nov. 2025.
[5] Washington Post. “Meet the Investor Who Thinks the Poverty Line Should be $140,000.” 29 Nov. 2025.
[6] U.S. Census Bureau. “Poverty in the United States: 2024.” Supplemental Poverty Measure Data.
[7] Wimer, Christopher, et al. Center on Poverty and Social Policy. Columbia University. Historical Supplemental Poverty Measure Research.
[8] Federal Reserve Bank of Atlanta. “Policy Rules Database.” Benefits Cliff Analysis Tools.
[9] Harris Poll. Survey on Six-Figure Earner Financial Anxiety. Nov. 2025.
