Business
Commentary: Is $140,000 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.
The Federal Communications Commission is taking aim at broadcast networks’ late-night and daytime talk shows, including ABC’s “The View,” which often feature politicians as guests.
On Wednesday, the FCC’s Media Bureau issued a public notice saying broadcast TV stations would be obligated to provide equal time to an opposing political candidate if an appearance by a politician falls short of a “bona fide news” event.
For years, hosts of “The View,” ABC’s “Jimmy Kimmel Live!” and CBS’ “The Late Show with Stephen Colbert,” have freely parried with high-profile politicians without worrying about being subjected to the so-called “equal time” rule, which requires broadcasters to bring on a politician’s rival to provide balanced coverage and multiple viewpoints.
With the new guidance, the FCC appears to take a dim view of whether late-night and daytime talk shows deserve an exemption from the “equal time” rules for stations that transmit programming over the public airwaves. The move comes amid FCC Chairman Brendan Carr’s campaign to challenge broadcast networks ABC, CBS and NBC in an effort to shift more power to local broadcasters, including conservative-leaning television station groups such as Nexstar Media Group and Sinclair Broadcast Group.
Since becoming chairman of the FCC a year ago, the President Trump appointee has been critical of CBS, NBCUniversal and Walt Disney Co. He launched investigations into Disney and Comcast’s diversity hiring practices and reopened a “news distortion” probe into CBS’ edits of a 2024 “60 Minutes” interview with then-Vice President Kamala Harris after Trump sued the network for more than $10 billion.
Carr withheld approval of CBS parent Paramount’s sale to billionaire scion David Ellison’s Skydance until after Paramount agreed to pay Trump $16 million to settle the suit, which several legal observers had deemed frivolous.
During a social media storm over Kimmel’s comments in the wake of the killing of conservative activist Charlie Kirk in September, Carr suggested the FCC might use its regulatory hammer over ABC parent Walt Disney Co. if the Burbank giant failed to take action against Kimmel. “We can do this the easy way or the hard way,” Carr said at the time.
The FCC oversees television station broadcast licenses, and those stations have obligations to serve the public interest.
On Wednesday, the FCC rolled out the new guidance aimed at late-night talk shows and “The View,” saying there’s a difference between a “bona fide news interview” and partisan politics.
“A program that is motivated by partisan purposes, for example, would not be entitled to an exemption under longstanding FCC precedent,” the Media Bureau said in its unsigned four-page document.
The bureau encouraged broadcasters to seek an opinion from the FCC to make sure their shows were in compliance — an advisory that will likely raise anxiety and potentially prompt some TV station groups to scrutinize shows that delve deeply into politics.
ABC, CBS and NBC declined to comment.
Since Trump returned to the White House a year ago, the FCC has stepped up its involvement in overseeing content — a departure from past practice.
Trump has made no secret of his disdain for Kimmel, Colbert, NBC comedian Seth Meyers and various hosts of “The View.”
Recently, “The View” featured former U.S. Rep. Marjorie Taylor Greene, once a Trump acolyte who has become a fierce critic of the president.
Daniel Suhr, president of the conservative Center for American Rights, applauded the FCC move in a statement.
“This important action puts Hollywood hosts and network executives on notice — they can no longer shower Democrats with free airtime while shutting out Republicans,” Suhr said. The organization has lodged several complaints with the FCC about alleged media bias.
Anna M. Gomez, the lone Democrat on the three-person commission, quickly blasted the move.
“For decades, the Commission has recognized that bona fide news interviews, late-night programs, and daytime news shows are entitled to editorial discretion based on newsworthiness, not political favoritism,” Gomez said. “This announcement therefore does not change the law, but it does represent an escalation in this FCC’s ongoing campaign to censor and control speech.”
“The 1st Amendment does not yield to government intimidation,” she said. “Broadcasters should not feel pressured to water down, sanitize or avoid critical coverage out of fear of regulatory retaliation.”
The precedent was established in 2006, when the FCC determined that then-NBC late-night host Jay Leno’s “Tonight Show” interview with actor Arnold Schwarzenegger, who announced his bid for California governor, was a “bona fide” news event, and thus not subject to the FCC rule.
The FCC said that station groups need not rely on that 2006 decision because the agency “has not been presented with any evidence that the interview portion of any late night or daytime television talk show program on air presently would qualify” for such an exemption.
The FCC’s guidance does not apply to cable news programs — only shows that run on broadcast television, which is subject to FCC enforcement actions.
After the longest-operating cafe in L.A. County announced in late December that it would shut down after 139 years, customers of the Original Saugus Cafe began buying up its branded hats, T-shirts, mugs and other merchandise.
When the merch sold out, some took to filching from the tables: glassware, salt and pepper shakers, and even utensils.
To Jessie Mercado, 31, and her father, Alfredo — who has owned the beloved cafe in Santa Clarita for 30 years — it was amusing and sweet that many held the establishment so close to their hearts that they wanted to take pieces of it home with them.
A sign posted to the Saugus Superette, the liquor store adjacent the Original Saugus Cafe, promises the reopening of the restaurant.
(Jenn Harris / Los Angeles Times )
But a property manager who took over handling their lease in recent months saw it differently. He left an angry voicemail for her 59-year-old father, reviewed by The Times, telling him to “get the Godd— s— back,” or he would sue.
Customers of the Original Saugus Cafe didn’t have long to mourn the loss of the landmark. The restaurant, which closed on Jan. 4, has already reopened under new management. Meanwhile, behind the scenes, a dispute over the cafe’s ownership has boiled over into a lawsuit as the Mercados insist that they were pushed out.
For decades, Mercado’s father said he had a friendly relationship and verbal lease agreement with the property owner, Hank Arklin Sr., a former state Assembly member who owned several commercial spaces in the area.
But difficulties arose after Arklin died at the age of 97 in August, the Mercados said, and they began dealing with Larry Goodman, who handles properties on behalf of the Arklin family’s company, North Valley Construction.
The Mercados alleged in a lawsuit filed last week that Goodman, North Valley Construction and Arklin’s wife, Louise, had treated the family poorly, tainted the brand, ignored their legal claim to the business and equipment so they would abandon the restaurant.
Despite the ongoing legal challenge, the cafe reopened on Monday at 5 a.m. under new owner Eduardo Reyna and with a slightly different name: Saugus Restaurant. Much of the furniture appears to have remained the same, along with menu items and even some of the employees.
People wait in line to eat at the Original Saugus Cafe during what was thought to be its last day of business after nearly 140 years in Saugus.
(Juliana Yamada / Los Angeles Times)
“People think we lied to them [about shutting down]. That it was a publicity front. I want them to know we were scammed into this,” Mercado said. “It’s sad it had to go down this way.”
Steffanie Stelnick, an attorney representing the Mercados, said that for the new owner and landlord “to open up and run [the cafe] in the same location, representing it as the same business without purchasing it or without permission” is effectively stealing.
Stelnick said she planned to amend the lawsuit to include Reyna.
Reyna did not respond to a phone call request for comment.
Goodman did not respond to multiple phone calls and messages from The Times requesting comment. Louise Arklin also did not respond to requests for comment.
But earlier this month in an interview with the Santa Clarita Valley news outlet the Signal, Goodman disputed that the Mercado family owned the business and said the father had wavered about keeping the restaurant going.
“They don’t have nothing to sell. I own everything,” Goodman said. “We own the cafe. We own the building. The stove. The dishes. The forks. We own everything in there.”
The cafe, in a long, narrow building, was beloved by Santa Clarita residents and was locally renowned for its long-running operation, its cameos in various films and television shows, and visits by Hollywood stars such as Frank Sinatra and John Wayne.
Mercado said her family hadn’t wanted to close. They wanted to continue supporting the 17 employees who worked there. But, she said, they entertained the possibility of selling the business if the right offer came along. Dealings with Goodman, however, had felt hostile and left her father feeling “humiliated” and like they had no option but to leave.
A sign on the door posted in late December announced the cafe’s closure, noting that the “decision was not made lightly.”
On its last day of operation, the line stretched down the block. Among customers saying their goodbyes was Charlane Glover, who shared countless Sunday morning breakfasts with her husband there before his death.
“I can’t imagine it being gone,” said Glover, who waited for over an hour for a table for her and her granddaughter. “We are losing all of our history.”
Mercado’s father got a shock the next morning, his daughter said, when he arrived to pack up only to find the locks had been changed and a sign posted saying the cafe would be “reopening under new ownership soon!”
Alfredo Mercado had started at the restaurant busing tables and washing dishes, she said, working his way up the ladder to bartender and cook positions to eventually acquire ownership of the cafe and its name in 1998. Her father is the sole name listed on the LLC.
Stelnick, the family’s attorney, wrote in a Jan. 6 cease-and-desist letter to Goodman that he made a “wrongful attempt” to take her client’s business and that his alleged “ongoing threats and force have already caused significant damage.”
The Mercados filed suit Jan. 14 in Los Angeles County Superior Court and are pursuing damages — including the taking of their personal property — of at least $500,000.
The complaint alleges that, in August after Arklin’s death, Goodman pressured Mercado’s father to sign a lease that stated that, in addition to the premises, all manner of appliances and utensils were under the purview of the rental agreement — including “kitchen equipment, booths, counters, stools, chairs, registers, utensils, pots, plates, cutlery, and other cooking & mechanical systems” — even though the Mercados had purchased and maintained those items, the lawsuit argued. Goodman, the lawsuit alleged, had indicated the Mercados would not be able to remain on the property as tenants if they did not sign.
At the end of August, the Arklin family’s company, North Valley Construction, submitted trademark applications for the names “Saugus Café,” “The Original Saugus Café” and “Saugus Café1.”
The lawsuit said the filing of applications showed the property owner was pursuing a “confusingly similar” name and that infringement on the Mercados’ business was thus “willful, deliberate, and malicious.”
Mercado said her father hadn’t acted sooner because he didn’t understand the extent of his claim over the business.
“We just didn’t know our rights,” Mercado said.
Staff photographer Juliana Yamada contributed to this report.
Netflix reported a strong finish to its fiscal year Tuesday, with revenue climbing 18% in the fourth quarter to just over $12 billion compared with a year ago.
The streaming giant’s profits during the same period reached $2.4 billion, or 56 cents a share, up from $1.87 billion, or 43 cents a share, a year earlier, the company reported.
The results were slightly ahead of Wall Street estimates and driven by growth in the company’s advertising business, higher prices and increases in paid memberships, which surpassed the 325-million mark, Netflix said in a letter to shareholders.
Netflix said total engagement on its platform, meaning the amount of time its users spent watching content, rose 2% in the second half of the year.
The company got a big boost in the quarter from the final season of its hit series “Stranger Things,” among other popular shows, documentaries and movies, including Guillermo del Toro’s “Frankenstein” and “Wake Up Dead Man: A Knives Out Mystery.”
Netflix said “KPop Demon Hunters” broke records as its most-watched movie with 482 million views in the last half of 2025. Users wanted to sing along with “KPop Demon Hunters Lyric Videos,” which scored 32 million views.
The streamer’s top series was the second season of “Wednesday,” which pulled in 124 million views. The first season of the series also popped with 47 million more.
For the year, the Los Gatos-based company reported revenue of $45.2 billion, up 16% from 2024.
The latest earnings report follows news earlier Tuesday that Netflix modified its offer to buy Warner Bros. Discovery, making it an all-cash bid. The companies agreed on the deal, valued at $82.7 billion, in December.
The agreement between the most successful streaming platform and the storied movie studio behind “Casablanca,” Harry Potter and “Batman” has its share of supporters and detractors. Netflix shares have been on a decline since the December announcement.
“Investors will ponder whether Netflix becoming HBO faster than HBO became Netflix serves their interest,” said Emarketer senior analyst Ross Benes. “So far, markets have not responded kindly to the acquisition.”
Rival bidder Paramount has made clear it will continue its hostile takeover attempt for Warner Bros., despite some setbacks. It has given the company’s investors a Jan. 21 deadline to tender their shares. It remains to be seen whether Paramount opts to extend that deadline.
Warner Bros. has rejected Paramount’s overtures multiple times in recent months, while expressing its preference for its deal with Netflix.
The results were released after markets closed. Netflix shares ended the day at $87.05, down 1% on Tuesday.
Times staff writer Meg James contributed to this report.
Why each playoff team can win the Super Bowl: Seattle’s defense to the good Drake Maye
San Diego vacation rental tax proposal sparks debate ahead of committee review
Milwaukee area lands six James Beard semifinalists for 2026 awards
Busiest airport in America is not in Atlanta anymore. See where it is.
ICE detains 5-year-old. JD Vance in Minneapolis. Live updates
Florida High School Football Rankings: Top 25 teams – Oct. 21
Cleary's 21 help Le Moyne down Central Connecticut State 69-64 in OT
How old is Bo Nix? What to know about Oregon quarterback ahead of 2024 NFL Draft
99th annual Pony Swim held in Virginia
Indiana Members Credit Union announced as new anchor tenant at Bottleworks District
Judge rules NYC’s lone Republican congressional district unconstitutional, orders redraw
French firm Lactalis latest to recall baby formula amid contamination scare
Autopsy finds Cuban immigrant in ICE custody died of homicide due to asphyxia
Supreme Court appears ready to keep Lisa Cook on Federal Reserve board despite Trump efforts to fire her
Greenland, NATO and war: Fact-checking Trump’s Davos speech
-
Sports4 days agoMiami’s Carson Beck turns heads with stunning admission about attending classes as college athlete
-
Detroit, MI1 week agoSchool Closings: List of closures across metro Detroit
-
Culture1 week agoTry This Quiz on Myths and Stories That Inspired Recent Books
-
Lifestyle1 week agoJulio Iglesias accused of sexual assault as Spanish prosecutors study the allegations
-
Education1 week agoVideo: Lego Unveils New Smart Brick
-
Pittsburg, PA3 days agoSean McDermott Should Be Steelers Next Head Coach
-
Education1 week ago
How a Syrian Hiking Club Is Rediscovering the Country
-
Sports2 days agoMiami star throws punch at Indiana player after national championship loss