Economist Announces That the Real Poverty Line Is $140,000 Per Year

And most of us are making “not that much,” so…

By Braden Bjella

Published 3 weeks ago in Wtf

Anyone who’s actually alive and breathing in this country knows that doing anything of substance now costs a whole lot of money. How much money, you ask? The answer, according to one economist, is $140,000 annually. For context, around 10% of American households make at least that much money. Great!


So, how did economist Michael Green arrive at this number? According to Green, the original “poverty line” created in the 1960s assumed that, if a family spent about one-third of its income on food, then a food budget of three times that could define the minimum amount needed to avoid a crisis. This idea worked in the mid-60s, because food was 33% of household spending and other major costs (housing, healthcare, childcare, tuition, transportation) were much lower.


However, in the decades since, the cost of food has become a smaller share of the average household’s expenses — and the price of everything else has exploded.


If one keeps the principle behind the original poverty line and uses a food budget as a baseline, the heightened cost of everything else increases the food multiplier from 3 to 16. Consequently, the “poverty line” for a family of four is around $140,000 per year.


I know what you’re thinking — “That just means it’s a bad measurement!” Sure, but if one gets into specifics using national averages, $140,000 really does seem like the “sweet spot” amount for having a comfortable life in this country where all your needs are met without worry. Anything less than that, Green argues, and economic gains are eaten up by additional incurred costs for lack of resources.


For example, a family lacking in funds might consider having both parents work. However, this adds the cost of childcare — and while the family may still come out making more money than had they not had both parents work, the gains are relatively modest.


What are you supposed to do with this information besides “get sad”? I don’t know — maybe try asking your boss for a raise, I guess. That, or just see if he keeps his wallet in his desk and sneaks a few twenties while he’s in the John. 

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