In a bold proposition that stirred conversations in late 2025, Wall Street investor Michael W. Green suggested redefining the U.S. poverty threshold to US$140,000 annually for a family of four. This is a sharp contrast to the current federal benchmark, which deems a family of four earning less than $33,000 per year as impoverished.
Green’s viewpoint adds a new dimension to the ongoing debate about poverty measurement in America, a system largely unchanged since the 1960s. The U.S. government continues to employ a poverty assessment method established during President Lyndon B. Johnson’s era, despite significant socio-economic changes over the decades.
Green’s assertions attracted widespread media attention, with outlets like The Washington Post, Fortune, and Fox News covering the topic, sparking public discourse on an issue usually confined to academic circles.
With over 15 years of research in poverty as an economist, I contend that the crux of the matter isn’t about where the poverty line should be drawn—whether at $33,000, $100,000, or $140,000. Instead, the focus should be on understanding poverty as a continuum that transcends arbitrary thresholds.
Reimagining Poverty Lines
The public discussion often treats poverty lines as definitive markers, yet they ignore the complexities of living with limited income. The reality is that financial challenges persist regardless of minor income shifts. The assumption that crossing a fixed financial line alters one’s economic reality is a misconception.
A look at varying poverty benchmarks reveals stark differences in poverty prevalence. If the poverty threshold were set at $80 per person per day (equating to $140,000 yearly for a family of four), World Bank data suggests that 56% of Americans would be considered poor, along with many in other affluent nations.
Conversely, setting the bar at $20 per person per day aligns with the current U.S. threshold, reducing the poverty rate to 6%. On the extreme end, the World Bank’s definition of poverty—$3 per person per day—would classify just 1% of Americans as impoverished.
The lack of consensus among experts regarding an appropriate poverty line underscores the arbitrariness of these thresholds, which often reflect the chosen criteria more than the reality of poverty.
Rethinking Poverty Measurement
My research advocates for abandoning traditional poverty lines to gain a clearer understanding of poverty’s evolution globally. I propose a measurement approach called “average poverty,” emphasizing that lower income invariably imposes greater hardship.
Average poverty is grounded in the notion that poverty is the inverse of income, akin to concepts like pace in running or resistance in electricity. This approach quantifies poverty as the time required to earn $1, expressed in “days per dollar,” offering a tangible perspective on income disparity.
In practical terms, this means assessing average poverty by calculating the average duration needed to earn a dollar, factoring in all income sources including wages and benefits. In the U.S., this equates to 63 minutes per dollar, a stark contrast to countries like the United Kingdom (34 minutes), France (less than 31 minutes), and Germany (about 26 minutes).
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United Kingdom: 34 minutes
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France: less than 31 minutes
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Germany: about 26 minutes
This metric reveals higher average poverty in the U.S. despite its relatively high average incomes, highlighting that while other high-income countries have seen reductions in average poverty, the U.S. has experienced increases since 1990, except during the COVID-19 pandemic when temporary anti-poverty measures were implemented.
The Impact of Inequality
It may seem paradoxical that a wealthy nation can experience rising poverty amid economic growth, but this phenomenon is largely driven by inequality. A continuous poverty measure reveals the significant role inequality plays in the U.S., a country with one of the most unequal income distributions among affluent nations.
As inequality intensifies faster than income growth, average poverty rises even in a prospering economy. This explains why the U.S. appears poorer under a continuous measure than with a static poverty line at $20 per day, as the nation’s income distribution has become more unequal despite increasing average incomes.
Viewing poverty as a spectrum rather than a fixed state highlights the critical importance of addressing inequality, offering a more nuanced understanding of economic hardship.
