The Poverty Paradox: Why Honest Language Matters More Than Ever
I recently came across two statements that helped me understand why poverty conversations in America feel so frustrating and unproductive:
There are two kinds of poverty: absolute and relative… we can solve absolute poverty. In fact, we largely already have, especially in the developed world. Relative poverty is about envy. It’s a spiritual rather than economic problem and will always be with us. Relative Poverty is not a bug, but in a functional economy, it is the Operating System.
And this follow-up observation:
The reason we cannot eliminate it is due to a phenomenon known as the Tocqueville Effect. As social conditions improve, public sensitivity to the remaining inequalities increases, not decreases. In 1900, you didn’t need a smartphone to survive. In 2025, try getting a job, accessing banking, or using 2FA without one. As society advances, the Base Layer of required technology to function in the economy rises. Yesterday’s luxury becomes today’s utility. You cannot solve this because the solution to previous poverty creates the baseline for future poverty.
These observations aren’t meant to dismiss anyone’s struggles. Rather, they explain why we keep talking past each other when discussing poverty, and why our solutions so often fail to help the people who need it most.
This post will better explain what I mean, because understanding this distinction might actually help us address both problems more effectively.
WHY WE NEED TO TALK ABOUT THIS
Before continuing, we need to be clear: real poverty exists in America, and it’s devastating for the families experiencing it.
I’ve seen it here in Cherokee County. Families who genuinely cannot afford adequate food. Kids who don’t have winter coats. Parents choosing between medication and rent. Elderly people living in unsafe conditions. This is real, it’s wrong, and it deserves our attention and resources.
But here’s the problem: when we use the same word, “poverty,” to describe both the family that literally cannot afford food AND the family earning $140,000 who feels financially squeezed, we make it impossible to solve either problem effectively.
We end up with policies designed for one group that get applied to the other, helping neither. We end up with political arguments that generate more heat than light. And most importantly, we end up with people who are genuinely struggling feeling like their pain is being dismissed or politicized.
In explaining the distinction more clearly, I am not trying to dismiss anyone’s struggles, but to help us think more clearly about solutions.
THE TWO TYPES OF ECONOMIC STRUGGLE
Absolute Poverty is the inability to meet basic survival needs, food, shelter, clean water, basic medical care. This is measurable, objective, and most importantly, solvable through economic growth and targeted assistance.
Relative Poverty is feeling poor compared to your neighbors or compared to what you expected to achieve. This is subjective, comparative, and fundamentally different because it’s defined by inequality rather than deprivation.
Both are real. Both cause genuine stress and hardship. But they require completely different solutions.
Here’s an example from my own life: As someone who has managed Type 1 diabetes since 1988, I understand how baselines shift. When I was first diagnosed in the late 1980’s, I was grateful for insulin, the technology that let me survive. But as technology improved (better insulin, faster glucose meters, continuous glucose monitors, insulin pumps, etc.), my baseline expectations rose. What seemed like a miracle in 1988 is now the standard of care in 2025.
Am I worse off because better technology exists? No. But do I feel frustrated when I can’t afford the latest thing that hits the market? Absolutely. Both feelings are real and valid, but one is about survival, and the other is about comparison.
THE PROGRESS WE’VE ACTUALLY MADE
Here’s something that often gets lost in poverty discussions: we’ve made extraordinary progress eliminating absolute poverty, especially in the developed world.
And I want to emphasize this not to dismiss current struggles, but because understanding our success might help us replicate it.
In 1900, the vast majority of humans lived in what we would now call absolute poverty. Life expectancy was around 31 years globally. Child mortality was horrific. Most people worked brutal manual labor just to survive.
Today:
Global extreme poverty (living on less than $2.15/day, adjusted for purchasing power) has fallen from 42% in 1990 to under 10% today
Life expectancy has more than doubled
Access to clean water, sanitation, electricity, and basic healthcare is near-universal in developed countries
Food insecurity in the U.S., while still a serious problem, is primarily about nutrition quality and access, not actual starvation
This happened primarily through economic growth, technological innovation, and yes, targeted safety-net programs for those who genuinely cannot provide for themselves.
Understanding what worked helps us do more of it. And being honest about our progress doesn’t mean ignoring the work that remains.
WHY RELATIVE POVERTY FEELS SO REAL
Here’s where I think a lot of confusion occurs…
The Tocqueville Effect describes a genuine phenomenon: as absolute conditions improve, people become more sensitive to remaining inequalities, not less. This isn’t about people being ungrateful or entitled, it’s about how human psychology actually works.
When everyone was poor in 1900, the fact that some were slightly less poor wasn’t particularly prominent. But in 2025, when most people have basic survival needs met, comparisons become more psychologically important. The fact that your neighbor has a nicer car or bigger house, better vacation photos on social media, or a better looking physique due becomes a real source of stress and dissatisfaction.
This doesn’t make the feelings invalid. It just means they’re a different type of problem requiring different solutions.
YESTERDAY’S LUXURY IS TODAY’S NECESSITY
Here’s where this becomes really practical. The baseline for what’s considered “necessary” keeps rising, and this creates genuine economic pressure.
In 1900, you could get a job by walking into a local business and asking if they were hiring. No resume, no online application, no email address required.
In 2025, try getting any job, even entry-level retail, without:
A smartphone or computer with internet access
An email address
The ability to fill out online applications
Two-factor authentication access
Digital payment methods for receiving your paycheck
These technologies didn’t exist 30 years ago. They were luxury items 15 years ago. They’re essential survival tools today.
The same is true for:
Banking (try cashing a check without a bank account and ID)
Healthcare (patient portals, appointment scheduling, telehealth)
Education (online homework, Google Classroom, digital textbooks)
Government services (applying for benefits, paying taxes, registering to vote)
This isn’t because people have become more materialistic or entitled. It’s because the economic and social infrastructure has evolved to assume everyone has access to these tools.
So when a family says “we can’t afford what we need,” they might mean:
We literally cannot afford food (absolute poverty, needs immediate help)
We can’t afford the technology/transportation/childcare now required to participate in the economy (rising baseline, requires different solutions)
We can’t afford the lifestyle we see our neighbors enjoying (relative poverty, needs yet another approach)
All three are legitimate struggles. But lumping them together as “poverty” makes it impossible to address any of them effectively.
THE $140,000 POVERTY LINE DEBATE
This confusion played out recently in a viral essay. Asset manager Michael W. Green argued that the “real” poverty line for a family of four isn’t the official $31,200, it’s $140,000.
His argument resonated with a lot of people who feel financially squeezed despite making good money. But economist Tyler Cowen pointed out that Green had confused two different problems: the cost of a comfortable middle-class lifestyle versus actual poverty.
Green calculated what a family needs to afford childcare, nice housing, good healthcare, reliable transportation, and healthy food in suburban New Jersey. He added it all up and got roughly $140,000. This math might be correct for that lifestyle in that location.
But calling it “poverty” creates more problems than it solves.
Economist Noah Smith noted that if Green were right, more than half of American families would be “poor”, including families that clearly have adequate food, shelter, healthcare, and transportation. The median family income for a family of four in the United States is $125,700.
What Green actually identified is the rising baseline, the Tocqueville Effect in action. He correctly observed that childcare, housing, and healthcare have become dramatically more expensive. He correctly noted that the baseline for “normal” middle-class life has risen.
Where I think the conversation went wrong was in the language. The family making $139,000 isn’t experiencing absolute poverty (inability to meet basic survival needs). They’re experiencing what we might better call “middle-class affordability pressure”, the frustration that they can’t afford the lifestyle they expected or that their parents had at the same age.
Both problems deserve attention. But they need different solutions, and using the same word for both makes productive conversation nearly impossible.
Tyler Cowen made an important point: “Prices are high in large part because demand is high, which can only happen because so many more Americans can afford to buy things.” High prices can actually be a sign of widespread prosperity, even while creating real pressure for individual families.
This is uncomfortable but worth understanding: the family struggling to afford $33,000 annual childcare on a $140,000 income is making difficult trade-offs, childcare vs. housing vs. savings vs. vacations. Those trade-offs are harder than they used to be (the baseline has risen), but trade-offs are what most non-poor people make.
A family in actual poverty doesn’t struggle to afford $33,000 childcare. They simply cannot access it at all, period. Understanding this difference helps us design better solutions for both groups.
WHAT THIS MEANS FOR REAL SOLUTIONS
If we accept that these are different problems, it changes how we should approach solutions.
For Absolute Poverty (People Who Cannot Meet Basic Needs):
Targeted and local safety nets that actually work. When people face genuine hardship, cannot afford food, shelter, or basic medical care, we need programs that provide immediate help without creating long-term dependency.
Remove barriers to economic participation. Occupational licensing, zoning restrictions, and other regulations often prevent people from escaping poverty through work or entrepreneurship.
Focus on economic growth and job creation. The best anti-poverty program remains a thriving economy with abundant job opportunities at all skill levels.
Address the rising baseline realistically. If internet access and smartphones are now essential to function economically (they are), then ensuring access makes practical sense, just like we did with electricity and roads.
For Middle-Class Affordability Pressure (The Rising Baseline):
Be honest about what we’re addressing. Stop calling it “poverty” when we mean “it’s harder to achieve middle-class stability than it used to be.” Honest language leads to better solutions.
Address the actual cost drivers. Housing costs have exploded largely due to zoning restrictions and regulatory barriers to building. Healthcare costs have risen partly due to lack of price transparency and competition. Childcare costs reflect a market that didn’t exist 50 years ago. Each needs targeted reforms, not blanket redistribution.
Stop subsidizing rising baselines. Every time government steps in to subsidize the rising baseline, it accelerates the baseline’s rise. If smartphones are essential, the answer isn’t “government should provide free smartphones.” The answer is “make sure the economy is strong enough that people can afford smartphones through their own work.”
Accept that the baseline will keep rising. Your great-grandchildren will consider things “necessities” that we can’t even imagine today. That’s progress. The goal is ensuring everyone can reach the current baseline, not preventing the baseline from rising.
For Relative Poverty (Feeling Poor by Comparison):
Address the cultural and spiritual dimensions. Comparison-driven dissatisfaction is partly a spiritual and cultural problem. Strong communities, religious and philosophical traditions that emphasize gratitude, and cultural messages about defining success by your own improvement rather than others’ achievements all matter.
Teach economic literacy. People need to understand that wealth is not zero-sum, that someone else’s success doesn’t cause your struggles, and that comparing yourself to others is often counterproductive.
Focus on opportunity, not outcomes. The question isn’t “why are some people richer than others?” It’s “does everyone have a fair shot at improving their situation?”
After 37 years, I’ve learned that comparing my diabetes management to another diabetic’s is pointless and destructive. Their circumstances differ from mine. Their body responds differently to insulin. Their life demands differ. The only useful comparison is me today versus me yesterday, am I improving or declining? The same principle applies economically.
MY UNCOMMON SENSE
Here’s what I think we should do:
1. Use Honest Language - Stop conflating absolute poverty, middle-class affordability pressure, and relative poverty. Create separate metrics and separate policy responses. When we say “40 million Americans live in poverty,” be clear about what we mean and who specifically needs what type of help.
2. Focus on the Baseline, Not the Gap - For absolute poverty: ensure everyone can meet basic survival needs and participate in the economy. For middle-class pressure: address the specific cost drivers (housing, healthcare, childcare) with targeted reforms. For relative poverty: acknowledge it’s largely a personal and cultural issue that government cannot solve.
3. Prioritize What Actually Works - Economic freedom, property rights, technological innovation, and targeted safety nets have done more to reduce absolute poverty than any other approach in human history. Let’s do more of what actually works.
4. Accept Some Uncomfortable Truths - The baseline will keep rising. Inequality will always exist in a free society. Some people will always feel “behind” their neighbors. These aren’t problems to solve, they’re realities to accept while we focus on ensuring everyone has genuine opportunity and no one lacks basic necessities.
5. Support Local Solutions - Most importantly: solutions should be local, not federal. Cherokee County government and community organizations understand local needs better than bureaucrats in Washington. Bottom-up solutions beat top-down mandates.
I’m not writing this to dismiss anyone’s struggles. I’m writing it because I think our confused language is actually making things worse for everyone, especially for those in genuine need.
When we call everything “poverty,” we end up with policies that don’t effectively address absolute poverty, don’t meaningfully reduce middle-class financial pressure, and definitely don’t solve the comparison-driven anxiety that plagues even wealthy Americans.
The people who literally cannot afford food deserve immediate help. The families struggling with rising baseline costs deserve honest analysis of cost drivers and practical reforms. The people feeling “poor” despite comfortable incomes deserve cultural wisdom about comparison and contentment, not government programs that won’t solve their actual problem.
All three groups deserve honesty, not political talking points that conflate their very different situations.
Honest language and clear thinking are prerequisites for effective action.
We’ve made extraordinary progress eliminating absolute poverty. The baseline keeps rising, creating new pressures. Some people will always feel “behind.” All three statements can be simultaneously true.
The question is: can we be honest enough about these distinctions to actually help the people who need it most?
If you want to have a constructive conversation about this or anything else, message me at dan@thrailkill.us, and let’s grab coffee or a beer.
Have a good one,
Dan