Is $136K the New Poverty Line? An Essay Goes Viral

The government puts the poverty line for a family of four at $32,150. But a Wall Street portfolio manager has ignited a robust debate by calculating the figure in the real world to be four times higher at $136,500, reports the Washington Post. Michael W. Green of Simplify Asset Management crunched the cost of housing, food, transportation, health care, child care, and other essentials for a family with two earners and two kids in his viral Substack essay, per Fortune.

"This is unfortunately very much the lived experience for people who are trapped in that valley of death," Green tells the Post, using his term for people who make too much money to qualify for benefits but too little to comfortably afford necessities. He criticizes the current federal poverty formula, which goes back to 1963, as outdated:

• "Everything changed between 1963 and 2024," he writes. "Housing costs exploded. Healthcare became the largest household expense for many families. Employer coverage shrank while deductibles grew. Childcare became a market, and that market became ruinously expensive. College went from affordable to crippling. Transportation costs rose as cities sprawled and public transit withered under government neglect."

To be clear, critics say Green's own reasoning is flawed and that a family earning six figures should not be considered in poverty. They say Green's budget relies on average costs, not the lowest possible, and that, for example, many families spend less after their children age out of day care. "If Mike is right, most Americans are poor people," writes Noah Smith in a detailed rebuttal blog piece. This "isn't just slightly wrong or technically wrong, but just totally off-base and out of touch with reality."

Still, alternative calculators, like MIT's Living Wage Calculator, also put the cost of basic security for a family of four above $100,000 in many areas. By official measures, 35 million Americans live in poverty, with disproportionate impacts on Black, Hispanic, and Native American children. Green's essay suggests expanding tax credits for families and loosening housing regulations to make life more affordable.