Is $140,000 the New Poverty Line for Americans?
A Wall Street portfolio manager made an argument for a $140,000 poverty line for American households. Does it hold water?
Rent is like 50% of my income currently and I'm trapped because nowhere charges less for the same space and I don't qualify for rentals without a guarantor that I no longer have. At this age, my parents were in their 3rd house on a single income with 3 kids.
The wealthy really fucked us over, hey. They're scum for what they did.
They are also scum for what they are doing.
The wealthy do what the wealthy do, voters in their millions enable them.
Up to now you have believed in the existence of tyrants. Well, you were mistaken. There are only slaves. Where none obeys, none commands. -- Anselme Bellagarrigue
Don't insult people over their nature. Money corrupts, especially over many generations. They just play a rigged game and have the edge to win. Time for some regulations. Social capitalism is the answer, fair taxes even on rich people. Prevent wealth hoarding over a certain point. Stop insulting people and get to three voting booth. Start telling real people to change their vote.
Same and I live in what would be considered a rural state. We don't have any big cities and a studio apartment would cost me about $1500 a month about 50 miles outside our biggest city and $1800+ within 50 miles of Portland Maine which is our biggest city. This shit is out of control. Our wages are more in line with a rural state, but our rent prices are near what you'd expect in a bigger city.
that's because your real estate is bought up by people like me with 150K salaries who think your 1800 rent is dirt cheap. In Boston a studio is over 3K now.
i know people who moved to Maine to find cheaper housing because none is available in Boston area. and the people who live in Boston fight any/all development to expand the housing supply, including renters. like i have friends who rent, who pay 3K a month, and then go to town meetings to fight new housing developments, and then complain went there rent goes up another 10%
"a family of four needs $136,500 a year"
I could see that, more likely in more expensive areas. You aren't getting anywhere in New York or San Francisco on $140K.
in New York or San Francisco on $140K.
A month?
The poverty line is for the nation overall. Using some of the highest cost of living areas to set it doesn't make sense. Why would you say a family making considerably more than most of their peers is poor because they would struggle to afford living somewhere else entirely?
It should be localized. it cuts both ways. Why would we say a family struggling to make ends meet is not really poor because they could live comfortably on that salary in a different region?
I highly recommend that you read the actual substack article.
The claim is based around how the original poverty line was the cost of food multiplied by 3. This assumes that food is 33% of your spending and that your other expenses are approximately the other 67%.
The $140k value is based around the fact that the ratio has shifted immensely. Food is cheap in the US relative to the other goods/services required to live in society. If you take the new ratio and extrapolate it out, the multiplier is over 10x the cost of food to account for the other components of spending.
Even if you want to debate the actual number itself. The poverty line is laughable and anyone living at it is legitimately destitute, not just in "casual poverty"
The poverty line is about 32K for a family of four, and 15K for a single person.
fed minimum wage full time is a income of 15K per year. this of course, varies by state, w/ CA min wage becoming 36K a year.
I truly feel for the people that are in that boat..
Which is nuts, because a two bedroom (hope your kids are the same gender) place is gonna be 24k of that. So 8k left over for insurance (car, life, home, and medical) food, childcare, all other bills, taxes, Christmas, school supplies, children's clothes and shoes. It's way below the number that would cover half of that.
The issue is... how do you accurately determine the poverty line without just taking some number and multiplying it. Because not only do costs vary by location, so does their ratio. So you really need a set of costs per location added together, then averaged based on the density of population in the area the costs were pulled from. And of course at that point the finaly number is probably true nowhere. So what is the use of it anyway. Each specific area needs it's own poverty line. The smaller the area the more useful and accurate the number will be. But you can't just say "fine, we will do it by zipcode". Because zipcodes have significant variation of sizes. It needs to be done intelligently and constantly as things shift. So in the end, there simply is no reasonably accurate poverty line unless a human calculates it for a specific address.
Take how much it takes for a living wage in the most expensive part of the country.
And that's it. If you try to shrink wrap it down to where it's bare subsistence anywhere, you trap people in places where everyone with the means leaves. Sure, the cost of living is low, but there's no jobs because everyone with money left. So it becomes impossible to get by, let alone amass the funds needed to relocate.
ISTG there are more commenters up in here who obviously didn't read the article than ones who did.
Like always, how far your money goes depends on multiple factors. 140k in the Midwest alone means you're living comfortably. Like all bills paid off, a lot of extra money for leisure, etc.
If you have a family and live in the bay area, then it's not that much. I personally wouldn't put it at poverty, but it'd be somewhat close to being paycheck to paycheck (assuming you still need to pay mortgage and whatnot)
That doesn't even buy a single politician.
I thought I heard Sam Bankman-Fried say he was surprised at how little it cost, it was like $50k or something.
State level politicians are like $5k-$10k. Shockingly cheap but you do need to buy most of the set.
I live alone in a moderately low cost of living area making about 52k take home. With no extenuating expenses related to health I can put away a hundred or two a month after rent, gas, utilities, food and car maintenance (I drive and fix old shit myself rather than make a car payment). But that is literally all I can do. If I had a second person to support or was in any other area I'd be underwater quick.
It's mentioned in the substack article that for a single individual his calculations place the poverty line around 50k, while 140k is for a family.
yeah but is your income going to go up? or are you like 50 and it's maxxed out?
context is everything. if you're 25 and your salary will double in 5-10 years your situation isn't bad.
blows my mind in my city how many 22-25 year olds scream how poor they are when they are just starting out their lives and think their 50-60K wage is 'poverty' when it will be 100K in 5 years.
This is highly dependant on where you live, as has been said before.
Yes. The people saying no are no longer temporarily embarrassed millionaires but temporarily embarrassed middle class. Have or have not, and 140k is have not given inflation, healthcare, education, food, rent/mortgage, energy etc.
140K is more 85% of the USA population.
It's upper middle class. it's about 5 grand a month in disposable income. assuming a 1/3 tax rate and 3K in rent/mortage
it's also what I make, and yeah i have that much disposable income per month.
how many kids do you have and how much of your income is going towards their education/childcare?
If $140,000 is the poverty line can I please make poverty wages?
This calculation is for a family of four. Please read more than the headline and comments.
If my wife and I both made 70k I think we could comfortably raise 2 kids.
As is? We would need some serious help.
No obviously not.
This calculation is for a family of four. Please read more than the headline and comments.
Well shit thats a little Less than 3x what I make lol. 💀💀💀💀
The substack is well worth the read.
Math that a lot of us educated poverty-livers have done before. Its refreshing to see one of the econ-bros validate it.
Which method does the U.S. use to calculate its poverty line?
https://en.wikipedia.org/wiki/Poverty_in_the_United_States#Poverty_income_thresholds
TL;DR: "The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation."
“laughable,” arguing that you can’t declare the majority of Americans impoverished because the suburbs they choose to live in are expensive, which is what Green did when he used the middle class suburb of Caldwell, New Jersey, as his median.
"My plastic surgeon said smiling is a waste of Botox, but I can't help but let out a boisterous ha cha fucking cha at the absurdity. If poor people don't want to spend so much money on cost of living they should just go live in the places nobody lives because there are no jobs or resources."
"Poor people are just so bad at managing money. That's why they have to blindly trust everything we say. We know how to spend money wisely, and we know what's best for the economy and them."
"Get out of the way Plebs! We're betting it all on AI!"
"Oh my! Well, that was unfortunate but also completely unforeseeable. I guess the only thing left to do is brush ourselves off, pat ourselves on the back for being such altruistic utilitarians, ignore the screams from the plebs and go again."
"So where's our bailout? Time is money."
“laughable,” arguing that you can’t declare the majority of Americans impoverished because the suburbs they choose to live in are expensive, which is what Green did when he used the middle class suburb of Caldwell, New Jersey, as his median.
Yeah you're right, this is verging on dishonest. The whole point of him picking Caldwell, NJ was to find an extremely median place to live and avoid accusations of cherry-picking San Francisco or Manhattan prices. Essex county is 13th out of 21 counties in NJ for income, NJ is the 11th largest state by population. I'm sure you could find something more mundane, but not that would affect the final numbers to any significant degree unless you were cherry-picking in the other direction.
Sure there's lots of states with much lower property values, but you have to weight it based on where people actually live. Telling poor people to move to Buttfuck, ID and get a job there instead doesn't work.
Maybe. Depends on where you live. If you live somewhere relatively inexpensive it's not bad. However, I'd have to caution that this sounds like gross income (I did a search and the article didn't say), and if it is, this isn't great. Taxes, medical, any union dues, and hopefully a significant chunk going into a retirement fund will eat this up quickly. This is in the 24% fed tax bracket - not including child credit or any pre-tax deductions for something like a 401k, and no State tax taken. 140k take-home would be pretty good.
Like there is a figure low enough for either party.
Yes. That as a household income is not actually that far from two median individual incomes. As someone in a high cost of living area, I can see you’d be very restricted on less than that, and it’s tough to see how you’d ever afford to own a home.
God I wish that were me
as income, that is quite a bit above middle income. unless you living in very rich neighborhoods, its still affordable in places even with hcol.
<100k is considered low income though in HCOL.
uh huh, thank you vice and mr wallstreet substack poster for spreading such awareness, but where does that leave people in actual poverty?
Uh... right where they are? The American welfare state is insufficient across the board, so it needs to be strengthened across the board, and employers across the board should be forced to pay living wages.
...we're getting soylent green instead. they all agree on that.
Well he addresses that, the lowest level gets some assistance. Once you reach a certain income to climb out you lose the assistance and effectively are back in poverty again.
vast majority people in actual poverty spend their lifetime in poverty. about 10% make it out, mostly via education for gifted kids.
Well shit thats a little Less than 3x what I make lol. 💀💀💀💀
This calculation is for a family of four. If you live alone on a single income then you're probably right about at the line
No.
The answer is NO, it's not. However, to be completely fair, I've bookmarked the "supporting materials" to give it a review later when I have a little more time.
As someone who grew up in a family actually straggling the poverty line, there's simply 0% chance that any family anywhere in this country is living in poverty with that kind of income. It's well above what most households are bringing in, and while there may be a limited subset of circumstances where that money isn't sufficient, that's not what poverty is.
And I read through some of the comments in this thread -- Assuming they've come from real humans not pushing an agenda, it makes me ashamed to be associated with those people.
there's simply 0% chance that any family anywhere in this country is living in poverty with that kind of income.
The original Substack addresses this point, but the short of it is: Most income gains from 35k to 100k are cancelled out by a loss of government benefits, so there's a lot less difference between these than you'd expect. You only start making real gains starting from 100k. Now a family making 100k will have expendable income that's true, but the vast majority of its income will still go towards essentials so it's still one emergency away from insolvency.
Edit: This means that a family with two incomes and two young children making 50k is getting a market price equivalent of 50k in government benefits, so we can crudely approximate families straddling the poverty line as making 100k net. In that case the difference between the effective official poverty line and the proposed poverty line is a large but realistic 40%.
This makes way more sense. Thanks for the explanation.
Unfortunately, no it doesn't address that point. It's basically, if you pervert the definition from a century ago and interpret it in one specific way for a way of life that's hardly anywhere close to the standard/average, then you can maybe make a clickbait case for a super high income that drives engagement. Think of the click through and comments!
You really should read the article before commenting. I know you are not alone in this thread don't feel singled out, but they make a very good point.
and while there may be a limited subset of circumstances where that money isn’t sufficient, that’s not what poverty is.
bingo. where i live everyone thinks they are in 'poverty' because they can't afford luxuries like expensive cars, expensive vacations, and luxury housing. they are not anywhere near true poverty. but since most grew up wealthy/middle class, they think they are.
as someone who grew up lower-class, it blows my mind how poor most people are with money, and how they blame society rather than their own budgeting skills. i know people who make 40K a year who spend 10K a year traveling, and then cry poor.
No, it’s not. Having to use a budget and not spending whatever you want on anything you want at any time is not poverty. Fuck off with this.
I think the headline is a little misleading.
My gut reaction was the same as yours, but after reading the article I don’t think they are far off.
$140,000 for a family of four in certain locations could be doing very poorly.
After taxes, it’s about $110,000 a year. According to a few sits I found when seaching, the per year cost of a child varies by state. In NY, it’s approx $30k per year. So, for a family of four with two kids that $50k-60k a year.
That leaves about $60k a year. Housing costs in NY is approx $4.3k a month for a 3br house. . That’s $51,600 a year.
You now have $8,400 left for the utilities, food, clothing, etc.
The current federal poverty level is roughly $30k/yr which is basically impossible to make work.
No.
Yes. If you actually read what that means.
Does a single person need $140k? No.
Does a family with kids in a city? Yes.
That number is for a family of four. Could you imagine trying to pay today's costs to raise a family of four? You would basically need six figures
I read the article just fine, actually. If you actually understand what poverty means, you wouldn't make such a ridiculous claim. It'd have to be a really high cost-of-living city for that to be the case, but there are a lot of cities where a family can raise children on $140k easily. Affordability these days is difficult in general, I understand the frustration, and it's probably why people downvoted me by reflex, but creating a poverty line off cherry-picked conditions doesn't make any sense.
