Michael Green Warns “Valley of Death” in U.S. Poverty Metrics

Are you among the families earning $100K–$140K trapped in the “Valley of Death?"

Portfolio Manger and Chief Strategist at Simplify, Michael Green is calling for a fundamental overhaul of how the United States measures poverty. Green's recent essay, The Valley of Death, Why $100,000 Is the New Poverty argues that outdated federal thresholds mask the financial distress facing a wide stretch of working households. The article, which is going viral, centers on Green's main point, that the official poverty line, rooted in 1960s assumptions about family budgets, no longer reflects the economic reality most Americans face today. "There’s a valley that I decry as the valley of death, basically between about $40,000 and $100,000 in which you’ve gained $60,000 worth of quote-unquote income… and you’re not any better off," he said.

Green, told AInvest he discovered that the current federal poverty definition still relies on a formula created in 1963, one that assumed food costs represented one-third of a household budget. “We never changed the metrics over the time period in which food prices have fallen dramatically relative to all the other costs that people experience,” Green said.

According to Green, the consequences are stark. The official poverty threshold for a family of four is “around $32,000,” he said, but constructing even a bare-bones budget for such a household today leads to an updated threshold of “anything less than about $100,000 a year.” In higher-cost regions, he added, “you’re looking at somewhere around 140 to $150,000” before a family can begin saving. “Most people at this point are acknowledging that this is correct and are candidly a little terrified because they don’t actually know what to do about it,” Green said on AInvest's podcast Capital & Power.

Green pointed out that this disconnect contributes to a financial “valley of death” for households earning roughly $40,000 to $100,000, families who earn too much to qualify for housing, childcare, or healthcare subsidies but still struggle to meet essential expenses. “They walk to the grocery store or they drive to the grocery store and they see the person next to them who isn’t working, who is getting benefits that are basically duplicating all the additional work that they’re doing, that makes them resentful and angry and it’s understandable.”

The response to his analysis, Green said, has been intense. He described pushback from both political camps, noting that some on the left resist redefining poverty upward, while “on the right…an incredible amount of understandable pride” leads some to reject being labeled poor. Yet, he emphasized, the most common feedback “85 to 90%” comes from readers saying “thank goodness somebody finally spoke to my lived experience.”

Green’s proposed remedies center on adjusting tax policy and strengthening targeted supports for working families. He argues that modest steps, such as expanding the Earned Income Tax Credit and lifting the cap on Social Security payroll taxes, could help middle-income households without creating large new bureaucracies. Eliminating the payroll tax ceiling, he said, would mean high earners “pay Social Security tax on every penny” of income. “Unfortunately, addressing these issues is going to require more progressive tax rates… it is going to require those who are on the extreme lucky end of our society. And I have to emphasize that I consider myself extraordinarily lucky and recognize that I will have to pay more for this,” Green said.

At the same time, Green is sharply critical of expanding government-run childcare programs, especially in high-cost cities. He favors instead providing families with cash through existing tax credits, saying this allows parents, not government systems, greater autonomy: “Almost always the best choice is to have that child raised by their parents,” he said.

Despite the charged political implications, Green believes the public mood may be shifting as older generations see their adult children unable to afford stable lives. “More and more people are waking up to this as they see their children and their grandchildren really begin to suffer,” he said. He also reported that “many in the press” and “a few politicians” have reached out privately about his arguments, though he acknowledges policymakers are “a little terrified because they don’t actually know what to do about it.”

Green says he hopes the debate he has sparked does not “burn it down,” but instead leads to a constructive rethinking of federal policy. “We need to actually have a more progressive tax structure…recognizing the realities of raising children in today’s world,” he said. While Green is unsure whether the momentum will last, he remains “hopeful that it will burn in a constructive manner.”

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