How the Middle Class Was Quietly Wiped Out

The economy, they tell me, is great. Stocks are at an all-time high. GDP growth is up. Jobs are tight, but almost all new jobs are going to American-born workers. Real weekly wages are up, even adjusting for inflation, and inflation is slowing down. Materially, we have never been better off. We have supercomputers in our pockets, air conditioning in our homes, antibiotics, modern dentistry. So, why do so many Americans Still feel poor.

When it comes to the economy, feelings don't seem to care about facts. Michael W. Green, a Wall Street portfolio manager I first heard of three days ago, just gave us a viral explanation of why this is the case. The key, he says, is a metric most of us take on good faith, the poverty line. In 2025, the U.S. Census gave us 32,150 as the poverty line for a household of four in the lower 48 states. Green says, not so fast. It should be closer to 140,000.

That's right. A family making $140,000 a year is poor. At face value, this sounds suspicious. The 2024 median income for a family with two or more children was $109,000. Are you telling me $140,000 makes me poor? Cue the hysteria and the suck-it-up-buttercup reactions. Green was instantly ridiculed. It's completely disconnected from reality, said economist Kevin Corinth of the American Enterprise Institute. It's laughable to put a poverty line far above the median income in the United States. Noah Smith wrote, the whole thing doesn't pass the smell test.

So, I did some digging, and sure, green's numbers don't all stand up to scrutiny. Maybe child care costs $25,700 a year, and not $32,000 a year. And I'll grant that a median makes a bad floor when it comes to identifying destitution and doling out welfare. It's not sustainable. But the attacks on green miss the point. And I might argue they do it on purpose. Worse, they ignore the alarming problem that green and most of us see in the economy. Telling Gen Zers who can't find affordable housing to just lay off the scented candles and how entitled they sound is ignorant and elitist.

On the other hand, equally unhelpful is the impulse to scold all the boomers for being selfish when they complain about property taxes. Both angles ignore the fact that we have two economies going on in America. One is the economy inhabited by people who already have money and equity. The other economy is the one where everyone lives paycheck to paycheck, where the line going up just means the American dream is getting farther and farther out of your reach. Even if you're comfortably middle class on the surface, you're also just one major crisis, a fire, a fall, a job loss.

away from ruin. Green's thesis caught on like wildfire, and it was generally well-received because he put actual numbers to this two-tiered, K-shaped economy. He asked, is it possible that Americans are better off materially than ever before, and still farther off from achieving the American dream? It is, and here's why. But first, a word from our sponsor.

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Holyheroes.com, helping you bring the joy of the faith to your family. And now, back to that poverty line. Today, the U.S. Census Bureau publishes two poverty measures. The first is the Official Poverty Measure, or OPM, which has remained mostly unchanged since 1963. In 2024, it clocked in at 10.6%, about 36 million Americans live in poverty. The second is the Supplemental Poverty Measure, or SPM, which tries to be more realistic, folding in food, clothing, shelter, utilities, taxes, and location. That gave us 12.9% in 2024, or nearly 44 million Americans living in poverty.

Green's argument is simple. Both measures are arithmetically bankrupt. They're built on 1960s assumptions. Especially the idea that food eats 30% of a family budget. Today, that's a fantasy. Those metrics simply can't tell us what it costs to build a family, survive, and save for the future in real life. As such, they should have no bearing on how we think about economic policy. We need to paint a new picture. Green wanted to see what would happen if you tossed the official stats aside And just calculated the cost of existing.

So, he built a bare-bones budget for a family of four. Two working parents, two kids. No vacations, no Netflix, no fun money. Just the basic participation tickets you need to hold a job and raise kids in 2024. Using conservative data from New Jersey, he landed here. Child care is $32,773 per year. Housing, $23,000 a year. Food and transportation both clock in at just under $15,000 a year. Healthcare, almost $11,000 a year. And other essentials, almost $22,000 a year, making the required net income $118,000 annually.

Add in federal, state, and FICA taxes, about $18,500. And the required gross income is? A hundred and thirty-six thousand, five hundred dollars a year. The key insight here, in 2024, food is no longer the big expense. Housing now eats 35 to 45 percent of that budget. Health care takes 15 to 25 percent. Child care, 20 to 40 percent. And that category, other essentials, for which Green got a lot of flack. Includes the quiet money vampires of modern life, cell phone plans, housekeeping supplies, pet food, and the small army of subscription trials that you forgot to cancel.

Critics pounced with the same message. Americans have never had it better, so stop whining. Green is a fool. Their evidence? Well, to cherry pick a few, the daily supply of calories per person has risen since 1960. From just over 3,000 a day to nearly 4,000. Another example, per capita floor space has risen for four-person households. More than 80% of these households have two or more cars, so most Americans do have adequate transportation.

Most Americans today have health insurance. You can almost hear the boomer voiceover, see, everything is fine. To be fair, child care is not a forever cost. But Green's critics forgot. That even when you smooth it out over time, the floor for participation still lands around $100,000 a year. That's before savings, emergencies, or retirement plans. And don't get me started on large families. The MIT calculator taps out somewhere around kid number four and starts doing the Lord's Prayer. Another critique, green uses averages.

Poor Americans, the critique goes, I don't know, I don't know. Find cheaper grocery stores, cheaper apartments, and cheaper child care. Fine, I'll grant it. Averages make bad floors. And yet, green is not alone. MIT's living wage calculator also puts a living wage for a family of four at $129,572 per year. The Economic Policy Institute says a modest but adequate living in the United States is a great way to save money. So, let's get started. In New Haven County, where I raise my children, is $132,335 per year for only two kids.

When I enter seven, the website breaks out into tongues and collapses. Meanwhile, 59% of American households do not have $1,000 in an emergency fund. 80% of Gen Zers worry they could not cover immediate expenses if they lost their income. Those are not feelings. Those are facts. So, yes, we have AC, we have smartphones, and plumbing that does not involve a shovel, but today's luxuries are mandatory participation fees in modern society. Green explains it best. To function in 1955 society, to have a job, call a doctor, and be a citizen, you needed a telephone line.

That participation ticket cost you $5 a month. Adjusted for standard inflation, that $5 a month should be $58 a month today, but you cannot run a household in 2024 on one $58 landline. The cost of that participation ticket for a family of four is not $58. It is $200 a month. The utility I'm buying is connection to the economy. This is the heart of the hedonic misdirection. Our tools improved, but the cost of belonging tripled.

So, is Green actually saying the poverty line should be $140,000 a year? No, that number just made economists hair-catch fire. His point is that the poverty line is absurdly outdated, and whether the real number is $90,000, $100,000, or $140,000, and whether the real number is $100,000, or $100,000, or $100,000, or $100,000, The point is that the potential for upward mobility is what we lost. Those numbers are just the entry fee to participate in the economy with government handouts. But even at those levels, families can no longer climb from the bottom half of the K-shaped economy to the top.

As Green put it in his follow-up piece, the American dream wasn't about net worth. It was about mobility. By inflating asset prices, we didn't create wealth. We destroyed mobility. We turned the ladder into a drawbridge, raised it up, and told the people stuck outside to be grateful that the castle looks so expensive. That's why the middle class is dying. Pew Research shows year after year that since 1980, incomes for the top 5% have skyrocketed while everyone else crawls. So, yes, boomer assets have also skyrocketed in value.

Houses they bought for $20,000 in 1975 are now worth over $1 million, but all that money is trapped. Unless Grandpa dies and gives the whole house to his grandson, the house will never buy said grandson access to the top of the K. The price of that access has risen far faster than the price of Grandpa's house.

But you can still climb up through the ladder. It's just harder now, right? Not so fast. We've built a system with benefit cliffs so steep that climbing the ladder only leads to loss of essential benefits and permanent financial fragility. Translation, work harder, lose your benefits, you're still broke. Green calls the income bracket where American families get crushed that $40,000 to $100,000 a year range the valley of death.

That's the zone where earning more makes you poorer. Try explaining that to older Americans who already own a home and bought their first house for $20,000. You'll hear every generation has its challenges. Green counters. Today, the challenge is an arithmetic failure.

The necessary monthly cash outflow exceeds the income available for far more families, making the promised middle-class outcome almost impossible. Not just difficult. The anger we're seeing on Twitter, at Trump rallies, and in the New York Mamdani race, that populism is the rational anger of guys like Mike Biskey, an Ohio dad and army vet who wrote this viral thread on Twitter. I feed a family of six on approximately $120 to $130 per week. Meanwhile, in Ohio, Snap pays a family of my size of $120 to $130 per week.

Around $1,400 per month. My entire food budget runs about $520 to $560 monthly. Snap recipients are getting roughly $900 more per month than what my family actually spends feeding six people real food. Mike's receipts are real, and his reaction is entirely understandable.

That's the rage Green calls the valley of death. When you're drowning, and you see the lifeguard throw a life vest to the person treading water next to you, you feel a homicidal rage at the lifeguard. We've built a system where you must be destitute to qualify for aid, or wealthy enough to ignore the cost. Everyone in between gets eaten alive. The family earning $65,000 a year, the family that just lost their subsidies and is now paying $65,000 a year, and the family that just lost their subsidies and is now paying $32,000 a year for daycare and $12,000 a year for health care deductibles is hyper-aware of the family earning $30,000 and getting subsidized food, rent, child care, and health care.

They see the neighbor at the grocery store using an EBT card while they put items back on the shelf. Economists and Greens critics call that racism or entitlement. It's not. It's math. And that anger is rational. Because the structure of the modern economy pushes two outcomes. Young people opt out of forming families. It's hard to be pro-baby when rent eats 40% of your take-home pay. Or families who do form are functionally forced to hand their children over to state-run care and education.

That's not just depressing. It's un-American. And even more disturbingly, It's anti-human. And guys, we shouldn't just blame the boomers. As I mentioned above, the system has tied their wealth up in traction. Boomer assets exist not to buy access for their heirs, but to support themselves as they age. That million-dollar home? As soon as grandpa needs memory care, the real estate will be sold to pay for it. That 401k is not capital going to you, his grandchildren. It's already spent, earmarked for elder care.

Even boomers who enjoyed middle-class living are no longer in a position to buy their grandchildren a seat at the high table, and the latter to reach the table isn't one the kids can climb on their own anymore, either. Which brings us to the incontrovertible fact that the modern economy as it exists today in America is profoundly anti-family. The American dream is no longer your friend, because it's on its final legs. That means the choice to get married, have children, care for them, and your aging parents is radically countercultural.

It's counter-market realities and will require superhuman grit. You will have to create goals and networks that just don't make sense to a lot of people who are trapped in the lie that you can just better your circumstances by playing by the rules. So, I'm with Green on the big picture. The middle class is disappearing. But here's my message. Don't be a victim. There is hope. After all, America is a nation of builders, and humans are a species of adaptation.

Yes, you have to adjust your expectations, and sometimes radically. You have been failed by selfish actors, and a government that prioritized short-term gains at the expense of average Americans. But that does not give any of us an excuse to despair or mope around. If you think about the historical cycle, hard times create strong men, strong men create good times, good times create weak men, and weak men create hard times, you are here. And it's a great place to become a strong man, or woman.

We will rebuild, and you can build a meaningful, beautiful life in just about any system, whether it's rigged for or against you. My primary suggestion? Build a family. If you're unmarried, build up other families. Why? Because no matter what happens economically, your family is your spiritual wealth. You will always have a purpose and hope if your family is your first priority. Putting family and faith first will give you a foundation for real creativity when it comes to navigating our economic reality.

Economically, on a practical level, consider ways to make yourself more valuable where you are now. Get financially literate. Try Small is Beautiful, or Dave Ramsey, or Rich Dad, Poor Dad. Not so you can wallow in frustrations and feeling like a victim, but so that you can opt out of parts of the economy designed to fleece you. Do not finance your burritos, let alone your vehicles. Do not rack up credit card debt.

Start investing in assets early, even in very small amounts, in a Roth IRA or a 401k, and commit to compound interest. Think of this as a 30-year project for your family, not a get-rich-quick for yourself. And yes, advocate for policies that rebuild, not just grow. An economy that rewards families, not just the top 1%. Can I make a plug? Normalize adult children and the elderly living at home. It's fine. It's historical. It's how most of the world operates. Hope is not a luxury.

It's the lifeline of every generation that ever pushed back against the current. We are not the first to face an economy that feels impossible, and we will not be the last to persevere. So, do not retreat. Gird your loins. Choose courage over cynicism, resilience over resignation.

Build the life the numbers say you can't. The American dream may be battered. The middle class may be languishing. But with God's grace, you will rise again. If you liked this episode, be sure to subscribe to The Deep. We bring you a new episode every Thursday at 4 p.m. Eastern.