Business

Commentary: Is $140,000 really a poverty income? Clearly not, but the viral debate underscores the ‘affordability’ issue

Published

3 months ago

December 10, 2025

Commentary: Is 0,000 really a poverty income? Clearly not, but the viral debate underscores the ‘affordability’ issue

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 right-of-center 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. She pegged that at $3,130 for a nonfarm family of four.

“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 Olshansky’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 home town 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 $40,000 mortgage: $2,450 a month, or only $29,400. 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 covered 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 has 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. Michel Green put his finger on something, and the likelihood is that things are only getting worse.

Business

California gas is pricey already. The Iran war could cost you even more

Published

53 minutes ago

March 2, 2026

Press Room

California gas is pricey already. The Iran war could cost you even more

The U.S. attack on Iran is expected to have an unwelcome impact on California drivers — a jump in gas prices that could be felt at the pump in a week or two.

The outbreak of war in the Middle East, which virtually closed a key Persian Gulf shipping lane, spiked the price of a barrel of Brent crude oil by as much as $10, with prices rising as high as $82.37 on Monday before settling down.

The price of the international standard dictates what motorists pay for gas globally, including in California, with every dollar increase translating to 2.5 cents at the pump, said Severin Borenstein, faculty director of the Energy Institute at UC Berkeley’s Haas School of Business.

That would mean drivers could pay at least 20 cents more per gallon, though how much damage the conflict will do to wallets remains to be seen.

“The real issue though is the oil markets are just guessing right now at what is going to happen. It’s a time of extreme volatility,” Borenstein said. “We don’t know whether the war will widen or end quickly, and all of those things will drive the price of crude.”

President Trump has lauded the reduction of nationwide gas prices as a validation of his economic agenda despite worries about a weak job market and concerns of persistent inflation.

The upheaval in the Middle East could be more acutely felt in the state.

Californians already pay far more for gas than the rest of the country, with the average cost of a gallon of regular at $4.66, up 3 cents from a week ago and 30 cents from a month ago, according to AAA. The current nationwide average is about $3 per gallon.

The disruption in international crude markets also comes as refiners are switching to producing California’s summer-blend gas, which is less volatile during the state’s hot summers. The switch can drive up the price of a gallon of gas at least 15 cents.

The prices in California are largely driven by higher taxes and a cleaner, less polluting blend required year-round by regulators to combat pollution — and it’s long been a hot-button issue.

The politics were only exacerbated by recent refinery closures, including the Phillips 66 refinery in Wilmington in October and the idling and planned closure of the Valero refinery in Benicia, Calif., which reduced refining capacity in the state by about 18%.

California also has seen a steady reduction in its crude oil production, making it more reliant on international imports of oil and gasoline.

In 2024, only 23.3% of the crude oil refined in the state was pumped in California, with 13% from Alaska and 63% from elsewhere in the world, including about 30% from the Middle East, said Jim Stanley, a spokesperson for the Western States Petroleum Assn.

“We could see a supply crunch and real price volatility” if the Middle East supply is interrupted, he said.

The Strait of Hormuz in the Persian Gulf, through which about 20% of the world’s oil passes, was virtually closed Monday, according to reports. Though it produces only about 3% of global oil, Iran has considerable sway over energy markets because it controls the strait.

Also, in response to the U.S. attack, Iran has fired a barrage of missiles at neighboring Persian Gulf states. Saudi Arabia said it intercepted Iranian drones targeting one of its refinery complexes.

California Republicans and the California Fuels & Convenience Alliance, a trade group representing fuel marketers, gas station owners and others, have blamed Gov. Gavin Newsom’s policies for driving up the price of gas.

A landmark climate change law calls for California to become carbon neutral by 2045, and Newsom told regulators in 2021 to stop issuing fracking permits and to phase out oil extraction by 2045. He also signed a bill allowing local governments to block construction of oil and gas wells.

However, last year Newsom changed his stance and signed a bill that will allow up to 2,000 new oil wells per year through 2036 in Kern County despite legal challenges by environmental groups. The county produces about three-fourths of the state’s crude oil.

Borenstein said he didn’t expect that the new state oil production would do much to lower gas prices because it is only marginally cheaper than oil imported by ocean tankers.

Stanley said the aim of the law was to support the Kern County oil industry, which was facing pipeline closures without additional supplies to ship to state refineries.

Statewide, the industry supports more than 535,000 jobs, $166 billion in economic activity and $48 billion in local and state taxes, according to a report last year by the Los Angeles County Economic Development Corp.

Bloomberg News and the Associated Press contributed to this report.

Business

Block to cut more than 4,000 jobs amid AI disruption of the workplace

Published

13 hours ago

March 2, 2026

Press Room

Block to cut more than 4,000 jobs amid AI disruption of the workplace

Fintech company Block said Thursday that it’s cutting more than 4,000 workers or nearly half of its workforce as artificial intelligence disrupts the way people work.

The Oakland parent company of payment services Square and Cash App saw its stock surge by more than 23% in after-hours trading after making the layoff announcement.

Jack Dorsey, the co-founder and head of Block, said in a post on social media site X that the company didn’t make the decision because the company is in financial trouble.

“We’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company,” he said.

Block is the latest tech company to announce massive cuts as employers push workers to use more AI tools to do more with fewer people. Amazon in January said it was laying off 16,000 people as part of effort to remove layers within the company.

Block has laid off workers in previous years. In 2025, Block said it planned to slash 931 jobs, or 8% of its workforce, citing performance and strategic issues but Dorsey said at the time that the company wasn’t trying to replace workers with AI.

As tech companies embrace AI tools that can code, generate text and do other tasks, worker anxiety about whether their jobs will be automated have heightened.

In his note to employees Dorsey said that he was weighing whether to make cuts gradually throughout months or years but chose to act immediately.

“Repeated rounds of cuts are destructive to morale, to focus, and to the trust that customers and shareholders place in our ability to lead,” he told workers. “I’d rather take a hard, clear action now and build from a position we believe in than manage a slow reduction of people toward the same outcome.”

Dorsey is also the co-founder of Twitter, which was later renamed to X after billionaire Elon Musk purchased the company in 2022.

As of December, Block had 10,205 full-time employees globally, according to the company’s annual report. The company said it plans to reduce its workforce by the end of the second quarter of fiscal year 2026.

The company’s gross profit in 2025 reached more than $10 billion, up 17% compared to the previous year.

Dorsey said he plans to address employees in a live video session and noted that their emails and Slack will remain open until Thursday evening so they can say goodbye to colleagues.

“I know doing it this way might feel awkward,” he said. “I’d rather it feel awkward and human than efficient and cold.”

Business

WGA cancels Los Angeles awards show amid labor strike

Published

1 day ago

March 1, 2026

Press Room

WGA cancels Los Angeles awards show amid labor strike

The Writers Guild of America West has canceled its awards ceremony scheduled to take place March 8 as its staff union members continue to strike, demanding higher pay and protections against artificial intelligence.

In a letter sent to members on Sunday, WGA West’s board of directors, including President Michele Mulroney, wrote, “The non-supervisory staff of the WGAW are currently on strike and the Guild would not ask our members or guests to cross a picket line to attend the awards show. The WGAW staff have a right to strike and our exceptional nominees and honorees deserve an uncomplicated celebration of their achievements.”

The New York ceremony, scheduled on the same day, is expected go forward while an alternative celebration for Los Angeles-based nominees will take place at a later date, according to the letter.

Comedian and actor Atsuko Okatsuka was set to host the L.A. show, while filmmaker James Cameron was to receive the WGA West Laurel Award.

WGA union staffers have been striking outside the guild’s Los Angeles headquarters on Fairfax Avenue since Feb. 17. The union alleged that management did not intend to reach an agreement on the pending contract. Further, it claimed that guild management had “surveilled workers for union activity, terminated union supporters, and engaged in bad faith surface bargaining.”

On Tuesday, the labor organization said that management had raised the specter of canceling the ceremony during a call about contraction negotiations.

“Make no mistake: this is an attempt by WGAW management to drive a wedge between WGSU and WGA membership when we should be building unity ahead of MBA [Minimum Basic Agreement] negotiations with the AMPTP [Alliance of Motion Picture and Television Producers],” wrote the staff union. “We urge Guild management to end this strike now,” the union wrote on Instagram.

The union, made up of more than 100 employees who work in areas including legal, communications and residuals, was formed last spring and first authorized a strike in January with 82% of its members. Contract negotiations, which began in September, have focused on the use of artificial intelligence, pay raises and “basic protections” including grievance procedures.

The WGA has said that it offered “comprehensive proposals with numerous union protections and improvements to compensation and benefits.”

The ceremony’s cancellation, coming just weeks before the Academy Awards, casts a shadow over the upcoming contraction negotiations between the WGA and the Alliance of Motion Picture and Television Producers, which represents the studios and streamers.

In 2023, the WGA went on a strike lasting 148 days, the second-longest strike in the union’s history.

Times staff writer Cerys Davies contributed to this report.