Michael W. Green, a Wall Street investor, created a buzz in late 2025 by arguing that the U.S. poverty line should be jacked up to US$140,000 for a family of four. Currently, a family of that size has to be eking by on $33,000 a year to qualify as poor in the federal government’s eyes.
His critique builds on a broader debate about how to measure poverty in the United States. The U.S. government has made few changes to how it officially calculates the poverty rate since President Lyndon B. Johnson launched the “war on poverty” in the 1960s.
Outlets such as The Washington Post, Fortune and Fox News covered Green’s assertions, sparking a flurry of public debate over a topic usually relegated to economists like me.
Having spent more than 15 years researching poverty as an economist, I believe that whether the government ought to draw this line at $33,000, $100,000 or $140,000 is not the real issue. Instead, I’ve been arguing that there is no magic threshold below which you are poor and above which you’re doing fine. Instead, poverty should be understood as a spectrum that can be measured without relying on arbitrary lines.
3 different poverty lines
Think about it: Living on $100 a day is better than $75 a day, which is better than $50, which is better than $25. Nothing magical happens when you cross some arbitrary line. People don’t suddenly escape the constraints and vulnerabilities of having low incomes when they make one dollar more than they used to.
And yet almost all public debates, research and policy treat poverty lines as legitimate – as if this threshold really exists.
Consider three very different poverty lines:
Moving the poverty line to $80 per person per day, which today amounts to roughly $140,000 for a family of four per year, as Green proposes, then 56% of Americans are poor according to World Bank data. So are most people in other high-income countries.
Drawing the poverty line at about $20 per person per day – approximately equivalent to the official U.S. poverty threshold for a family of four – the share of Americans who are below that line plunges to 6%, according to the World Bank data I analyzed.
The World Bank also has a definition of extreme poverty: $3 per person per day. If you put the line there, only 1% of Americans would be officially experiencing poverty.
Even among experts, there is little agreement on where the poverty line should fall. As a result, debates about poverty lines often reveal more about the choice of threshold than about poverty itself.
Measuring poverty without lines
Based on my research, I have proposed letting go of poverty lines to get a more meaningful view of how poverty evolved over time and in different countries.
Instead, I propose a new way to measure poverty, through what I call “average poverty,” which reflects the fact that having less income is always worse than having more.
Average poverty builds on a simple intuition. If someone I’ll call Alex earns half as much as someone else I’ll call Barbara, then Barbara is twice as rich as Alex and Alex is twice as poor as Barbara.
Similar inverse relationships are widespread in other fields: Pace is the reciprocal of speed in running as resistance and conductance are in electricity.
This means that poverty can be defined as the inverse of income, and its unit is simply inverted. If incomes are measured in dollars per day, poverty is measured in days per dollar.
Average poverty therefore captures something very concrete: the average number of minutes, hours or days that it takes to get $1 in income.
For these purposes, income includes earnings from work, government benefits and other sources of money, and it is averaged among all family members. It is expressed in international dollars, which account for inflation and global price differences. The time to get $1 refers to a day of life for anyone at any age and in any circumstance, not just the hours worked by someone with a job.
My proposed measure casts the U.S. in a strikingly different light from traditional poverty statistics. In the U.S., I’ve calculated that it takes 63 minutes on average to get $1 in income. That’s much slower than in many other high-income countries:
United Kingdom: 34 minutes
France: less than 31 minutes
Germany: about 26 minutes
This indicates that average poverty is substantially higher in the U.S., even though U.S. average incomes are higher than in most Western European countries. While average poverty declined over time in most other high-income countries, it has increased almost continuously in the U.S. since 1990 despite swift growth in average incomes.
There is one exception to this trend: during the COVID-19 pandemic, when the U.S. adopted several short-term anti-poverty measures.
The price of inequality
At first glance, this seems paradoxical. How can a rich country’s economy grow and yet get poorer?
The answer is simple: inequality.
Seeing poverty as a spectrum rather than a switch that’s on or off casts light on what traditional measures hide: Inequality matters no matter where you are on the poverty-prosperity continuum. Under this approach, poverty can change for two reasons: either incomes rise or fall on average, or the distribution of income may become more or less unequal.
And the U.S. has one of the most unequal economies in the world, and by far the most unequal among rich countries. Across all 50 states, inequality has risen sharply since 1990, regardless of political orientation, demographic composition or economic structure.
When inequality rises faster than incomes grow, average poverty increases even in a growing economy. This is why the U.S. appears poorer under a continuous measure than when there’s a simple line drawn at the $20-per-day mark: Its income distribution has been getting more unequal even as the average income has risen.
Seeing poverty as a spectrum changes the conversation. It reveals what poverty lines miss and why inequality matters so much.
This article is republished from The Conversation, a nonprofit, independent news organization bringing you facts and trustworthy analysis to help you make sense of our complex world. It was written by: Olivier Sterck, University of Oxford
Read more:
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- Who gets SNAP benefits to buy groceries and what the government pays for the program – in 5 charts
Olivier Sterck receives funding from the Research Foundation Flanders (FWO). He does not work for, consult, own shares in or receive funding from any organization that would benefit from this article.
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