Trade
Well-known Member
https://www.yahoo.com/finance/news/wall-street-strategist-explains-today-195231822.html
according to Michael Green, chief strategist and portfolio manager for Simplify Asset Management, conventional gauges don’t capture how much Americans are struggling with the cost of living, even households earning six figures. ..............the federal government’s poverty line, which traces back to the early 1960s and was calculated by tripling the cost of a minimum food diet at the time.
"..........everything changed between 1963 and 2024,” Green wrote. “Housing costs exploded. Health care became the largest household expense for many families. Employer coverage shrank while deductibles grew. Childcare became a market, and that market became ruinously expensive. College went from affordable to crippling. Transportation costs rose as cities sprawled and public transit withered under government neglect.”
Meanwhile, a two-income household is now needed to maintain what one income once provided, but that incurs childcare costs and the need for two cars.
As a result, the poverty line’s narrow focus on food leaves out how much other expenses are now sucking up incomes and lowballing the minimum amount Americans need to get by.
Green estimated that food comprises just 5% to 7% of household spending, but put housing at 35% to 45%, childcare at 20% to 40%, and health care at 15% to 25%.
“If the crisis threshold—the floor below which families cannot function—is honestly updated to current spending patterns, it lands at $140,000,” he added. “What does that tell you about the $31,200 line we still use? It tells you we are measuring starvation.”
according to Michael Green, chief strategist and portfolio manager for Simplify Asset Management, conventional gauges don’t capture how much Americans are struggling with the cost of living, even households earning six figures. ..............the federal government’s poverty line, which traces back to the early 1960s and was calculated by tripling the cost of a minimum food diet at the time.
"..........everything changed between 1963 and 2024,” Green wrote. “Housing costs exploded. Health care became the largest household expense for many families. Employer coverage shrank while deductibles grew. Childcare became a market, and that market became ruinously expensive. College went from affordable to crippling. Transportation costs rose as cities sprawled and public transit withered under government neglect.”
Meanwhile, a two-income household is now needed to maintain what one income once provided, but that incurs childcare costs and the need for two cars.
As a result, the poverty line’s narrow focus on food leaves out how much other expenses are now sucking up incomes and lowballing the minimum amount Americans need to get by.
Green estimated that food comprises just 5% to 7% of household spending, but put housing at 35% to 45%, childcare at 20% to 40%, and health care at 15% to 25%.
“If the crisis threshold—the floor below which families cannot function—is honestly updated to current spending patterns, it lands at $140,000,” he added. “What does that tell you about the $31,200 line we still use? It tells you we are measuring starvation.”
