Wall Street portfolio manager Michael Green set the cat among the pigeons recently by claiming the new poverty line for a family of four in the United States was $140,000 (€119,000) a year.
The figure is a multiple of the official poverty line for a family of four set by the US department of health and human Services ($32,150) and almost 70 per cent higher than the median household income in the US ($83,730).
Green’s number, contained in a provocative post on Substack, was criticised as ridiculous by statisticians and poverty campaigners who picked holes in his calculations.
But it struck a chord with many others who held it up as proof of why “middle America” is so financially compromised.
After decades of stagnating wages and rising costs, many middle-class Americans feel the system no longer affords them a fair bite of the cherry in terms of home ownership, healthcare and university access.
Cost of living was the stick used by US president Donald Trump to beat Joe Biden when in opposition, now it’s probably the biggest sword hanging over his own presidency.
“We have been told, implicitly, that a family earning $80,000 is doing fine − safely above poverty, solidly middle class, perhaps comfortable,” Green writes.
But if you consider what a household actually spends on childcare, housing, healthcare and other essentials in 2025, he says, “that $80,000 family would be living in deep poverty”.
The basic premise of his thesis is that the share of income the middle class must spend on non-discretionary items has grown significantly.
Instead of commanding a third of household income, it now commands a half.
Green sets out what he describes as a “basic needs” budget for a family of four, with two jobs and two kids, which, he says, involves “no vacations, no Netflix, no luxury. Just the ‘Participation Tickets’ required to hold a job and raise kids”.
His basic expenditure list comprises: childcare ($32,773); housing ($23,267); food ($14,717); transportation ($14,828); healthcare ($10,567) and other essentials ($21,857).
Why are apartments in Ireland so much more expensive to build than houses?
When state and federal taxes are accounted, Green says “you arrive at a required gross income of $136,500″.
You’ll notice the single largest item on his list is childcare. “This is the trap,” Green says. “To reach the median household income of $80,000, most families require two earners,” he says. “But the moment you add the second earner to chase that income, you trigger the childcare expense.”
Green is the chief strategist and portfolio manager at Simplify Asset Management and an unlikely champion of middle America.
His numbers have been attacked as spurious and many campaigners argue that “poverty” means going without things such as food, health insurance, a car.
But Green insists what he is describing is not absolute poverty but “precarity … that feeling of holding on by your fingernails”.
One of the more interesting reactions came from the Financial Times’s chief data reporter John Burn-Murdoch, who noted that the squeeze from essentials – seen in most advanced economies – has come alongside a fall in the price of mass-produced goods such as clothes, electronics and household appliances which explains why household spending cumulatively across all categories hasn’t changed much.
In other words, the high cost of essential services has been offset by cheaper consumer goods.
Burn-Murdoch concludes that the squeeze on middle-class incomes from essential services is – contrary to appearances – a reflection of prosperity.
“Why have services like education and healthcare become so expensive across the rich world? Because the people performing these services reside in affluent societies and dynamic economies where they can rightly command a high wage,” he writes.
“The prosperous world’s middle class is absolutely right to feel increasingly squeezed by the rising costs of essential services, but the squeeze and the prosperity are two sides of the same coin,” Burn-Murdoch writes.
Headlines about Ireland’s squeezed middle or rip-off Ireland feed into the same cost-of-living debates here.
It’s hard to dispel the notion that two incomes are now needed to buy what one bought back in the 1960s and 1970s.
Access to healthcare and healthcare costs in the US are to a certain extent specific to the US but the relatively high cost of childcare and housing that Green details in his $140,000 thesis are just as evident here.
The Central Bank’s borrowing restrictions here – three to four times income – is reflection of where house prices used to be.
It’s hard to unpack Ireland’s economy at the best of times. But not unlike the US, we have healthy, even supercharged, growth metrics juxtaposed with a conspicuous price squeeze on households.
Trump insists that “prices are all coming down” but the facts on the ground say otherwise and his move to roll back tariffs on several basic food items (he signed an executive order last month allowing a range of food products to avoid tariffs) is an admission of sorts.
Cost of living is undeniably the chief challenge facing Trump ahead of the 2026 midterms.