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Is $140,000 really a

poverty income?

Clearly not, but the

viral debate

underscores the

‘affordability’ issue

Treasury Secretary Scott Bessent is among President Trump’s Cabinet

heads who try to smile away the economic reality facing American

households, but the public isn’t buying it, Times columnist Michael

Hiltzik writes. (Yuri Gripas / Associated Press)

By Michael Hiltzik

Business Columnist | Follow

Dec. 10, 2025 3 AM PT

A wealth manager wrote that

$140,000 a year means poverty in

today’s America, sparking

controversy. He’s wrong, but he

made a good point

On the Sunday before Thanksgiving, a wealth

manager named Michael Green published a

Substack post arguing that a $140,000 income is

the new poverty level for a family of four in

America, where the official poverty line is

$32,150.

The post promptly went viral.

One would hope that economic commentators

coast-to-coast mentioned Green as their “person

I’m most thankful for” at their family gatherings

that week, because he gave them something to

masticate ever since. On the spectrum from left to

right, countless pundits have rerun Green’s

numbers to deride or validate his argument.

It is jarring that in one of the richest

countries in the world, one-

third of the middle class does not

make enough to afford basic

necessities.

— Stephens and Perry, Brookings

“The whole thing doesn’t pass the smell test,”

asserted centrist economist Noah Smith in a very

lengthy rebuttal. On the other side, Tom

Levenson, who teaches science writing at MIT,

gave us a Bluesky thread in which he noted that

“$140,000 in many urban areas in the US is a

family income that is at least precarious, and at

worst, one or two missed paychecks from having

to make rent-or-food choice.”

Green has asserted that the response to his post

has been “massively favorable.” That isn’t my

impression, but leave it aside.

Here’s my quick take: Green made a category

error (and a rhetorical blunder) by hanging his

argument on the concept of “poverty”; that’s the

claim that most of his critics focus on. His real

argument, however, concerns the concept of

affordability. Indeed, in a follow-up post he

redefined his argument as applying to “the hidden

precarity for many American families.”We can

stipulate that making $140,000 a poverty

standard is absurd. Even in a high-cost economy

such as California’s, millions of families live

comfortable lives on much less. (The median

household income in Los Angeles County —

meaning half of all households earn less and half

earn more — is about $86,500.)

Plenty of working families are raising children

and having fruitful social lives on median incomes

or even less: Living thriftily is not the same as

living penuriously or meanly. Much of what

middle-class families give up are things that aren’t

necessarily crucial. Green’s image of families

stripped to the bones with mid-six-figure or even

high five-figure incomes feels like something

conjured up by an asset manager with a distinctly

affluent clientele, which is what he is.

Yet, what his post alludes to implicitly is that the

concept of “middle-class” has evolved over the last

few decades, and not in a good direction. That’s

why so many Americans, including millions with

incomes that used to place them firmly in the

middle class, feel strapped as never before,

wondering how they can afford things their

parents took for granted, such as putting the kids

through college and saving for a comfortable

retirement.“The nation’s affordability crisis has not spared

middle-class families, one-third of which struggle

to afford basic necessities such as food, housing,

and child care,” Hannah Stephens and Andre M.

Perry of the Brookings Institution observed last

week. Their analysis covered 160 U.S. metro

areas, and held firm in all of them.

(They defined the middle class as falling into the

income range of $30,000 to $153,000.)

Let’s give Green’s argument the once-over.

He started with the origin of the federal poverty

calculation, which dates back to 1963, when a

Social Security economist named Mollie

Orshansky figured that since American

households spent an average of one-third of their

budget on food, if you estimated the cost of a

minimally adequate food basket and multiplied by

three, you might have a useful overall standard for

poverty.

“If it is not possible to state unequivocally ‘how

much is enough,’” she wrote, “it should be

possible to assert with confidence how much, on

an average, is too little.” She pegged that at $3,130

for a nonfarm family of four.Green festooned

his post with lots of hand-waving

and magic asterisks to accommodate changes in

American lifestyles over the ensuing six decades

and come up with his $140,000 standard. But if

one applies a constant inflation rate to

Orshansky’s $3,130 via the consumer price index,

you get about $33,440. As it happens, the

government’s official poverty level for a family of

four today is $32,150. Pretty close.

That’s an important figure, because it defines

eligibility for a host of government programs.

Eligibility for Medcaid under the Affordable Care

Act (in states that accepted the ACA’s Medicaid

expansion) runs up to income of 138% of the

poverty level; higher than that steers families into

ACA health plans. As KFF notes, “in states that

have not adopted Medicaid expansion, adults with

income as low as 100% FPL can qualify for

Marketplace plans.”

Green’s critics generally note that the median

household income in the U.S. was $83,730 in

2024, meaning that he’s placed well more than

half of America into the poverty zone. That just

swears at reality.

It needs to be said that Green’s approach differs

from those articles that regularly appear asking us

to commiserate with families earning $400,000

or $500,000 because they can’t make ends meet.

As I’ve reported in the past, these articles

invariably depend on sleight-of-hand. They offer

their own definitions of “rich” and list as

necessary or unavoidable expenses many items

that ordinary families would consider luxuries —

lavish vacations, charitable donations (including

to the adults’ alma maters), etc., etc. The strapped

family eking out an existence on $500,000

featured in one such piece had fully-funded

retirement and college plans, payments on two

luxury cars, “date nights” every other week ... you

get the drift.

Levenson ran the numbers for a hypothetical

family in his hometown of Brookline, Mass.,

which is objectively upper-crust, but his approach

applies more widely. Let’s run them for a

hypothetical household in Los Angeles County.

These figures are necessarily conjectural, because

your mileage may vary — in fact, everyone’s

mileage varies.

The median monthly rent in L.A., according to

Zillow, is $2,750, or $33,000 a year. On the other

hand, the median home price in the county is

close to $1 million. At today’s average mortgage

rate of 6.2% and assuming a 20% down payment,

the cost of an $800,000 mortgage runs to $4,900

a month, or $58,800 a year. One can find a

cheaper home farther from the coast, so for

argument’s sake let’s posit a $500,000 home with

a $400,000 mortgage: $2,450 a month, or only

$29,400 a year. But you’re probably living farther

from work, so your transportation costs go up.

The property tax on that $1-million home:

$10,000 in year one. (On the $500,000 home, it’s

$5,000.)

State and federal taxes on a $140,000 income:

about $18,000. Social Security payroll tax:

$8,680.

So of our $140,000, housing and taxes leave us

with somewhere between $44,500 and $78,920.

Food: The bureau of economic analysis pegs the

annual spending of a four-member California

family at an average $18,000. That figure is

almost certainly on the upswing.

Healthcare? In its annual report on employer-

sponsored health coverage, KFF found that the

employee share of family coverage reached

$6,850 this year, with employers shouldering the

balance of the average $27,000 total. For families

on Affordable Care Act plans, the costs are

impossible to calculate just now, because

Republicans in Congress can’t get their act

together to extend the premium subsidies that

make these plans workable.

Then there’s child care. In the old days, when

single-earner families were more common than

today, that wasn’t as much of an issue than it is

today. But if both parents work, children have to

be stowed in child care until they’re old enough

for kindergarten or first grade — let’s say up to

age 5 or 6. In California, according to one survey,

that’s about $13,000 per year per child.

A few more things we haven’t counted yet:

cellphone account, say $100 a month; home Wi-

Fi, another $100; computers, $1,000 or so each;

cars, $17,000 to $25,000 used; auto and home

insurance, $1,500 each; gasoline; and utilities

($3,300 a year, according to SoFi).

At the low end of housing costs, our California

family has remaining monthly discretionary

income of a few hundred dollars. At the higher

mortgage level they’re underwater. Levenson

adds, “Our notional couple best not have any

student loans.”It’s also worth noting that our couple hasn’t put a

dime into retirement or college funding. If they

set aside 10% of their income for 401(k)

contributions, they’re in trouble.

What we’re actually looking at is the collapse of

the American middle class. “It is jarring that in

one of the richest countries in the world, one-

third of the middle class does not make enough to

afford basic necessities,” Stephens and Perry of

Brookings write. “The single woman living in

Pennsylvania buying her first home, the Latino or

Hispanic couple in Indiana running a local

business, the Black parents in Texas starting their

family — all of these faces of the American middle

class are struggling with affordability when they

shouldn’t have to.”

Trump could alleviate these pressures, notably by

knocking off the tariff stunts. For all that he

declares “affordability” to be a Democratic hoax or

that his acolytes Treasury Secretary Scott Bessent,

Commerce Secretary Howard Lutnick and White

House chief economist Kevin Hassett try to smile

away the reality, the American public isn’t fooled.

The Conference Board, a business think tank,

reported that U.S. consumer confidence fell

sharply in November. No surprise. Michael Green

put his finger on something, and the likelihood is

that things are only getting worse.

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Michael Hiltzik

Pulitzer Prize-winning journalist

Michael Hiltzik has written for the

Los Angeles Times for more than 40 years. His

business column appears in print every Sunday

and Wednesday, and occasionally on other days.

Hiltzik and colleague Chuck Philips shared the

1999 Pulitzer Prize for articles exposing

corruption in the entertainment industry. Follow

him on Bluesky at hiltzikm.bsky.social, on X at

@hiltzikm and on Facebook atfacebook.com/hiltzik.