Whereas the average household income in 2024 that was $83,730, which means that there are a lot more people living below Groen’s assumed poverty line than we thought. And given that the average fourth-year resident earns about $70,000, does this mean that doctors who are still in training and are single or whose spouses earn little to nothing in salary are effectively living in poverty?
Do general practitioners live below the poverty line?
As Green noted, the formula for determining the poverty line was devised in 1963 by a Social Security Administration economist named Mollie Orshansky. Green writes:
“In 1963, she noted that families were spending roughly a third of their income on groceries. Because price data for many items (for example, housing) was difficult to obtain, if you could calculate a minimum adequate food budget at the supermarket, you could multiply it by three and thus establish a poverty line… She drew a floor: a line below which families were clearly in crisis.
Before 1963, that depth made sense. Housing was relatively cheap. A family could rent a decent apartment or buy a house on one income, as we discussed. Health care was provided by employers and cost relatively little (Blue Cross coverage averaged $10 per month). Childcare didn’t really exist as a market: mothers stayed home, relatives helped, or neighbors (who probably had someone at home) looked after each other’s children. Cars were affordable, if they were prone to breakdowns. With few fancy frills, the neighborhood kids in vo-tech could solve most problems if they did. Tuition could be covered by a summer job. Retirement meant retirement income, not a pile of 401(k) assets that you had to fund yourself.
Orshansky’s formula of food times three was crude, but as a crisis threshold—a measure of “too little”—it roughly matched reality. A family that spent one-third of its income on food would spend the remaining two-thirds on everything else, and those ratios more or less worked. Below that limit you were in a real crisis. You had a fighting chance up there.”
But we don’t live in 1963. In 2026, food costs as a percentage of the family budget will be much lower.
From green:
“For most families it is 5%-7%. Housing now consumes 35%-45%. Healthcare costs 15%-25%. Childcare, for families with young children, can eat 20%-40%.”
These days, you can’t multiply the amount you spend on groceries by three to get an accurate picture of the poverty line. According to Green, you should multiply your grocery bill by 16. Hence his $140,000 number.
Green has received a lot of counter pressure for its calculations (a colleague at the American Enterprise Institute called it “the worst poverty analysis I’ve ever seen”), and it has left observers questioning what poverty really means (is it a dire emergency, or is it living paycheck to paycheck and just getting by?).
While residents making $70,000 or a little less may not be in that state of emergency, it’s clear that many of them believe they should be paid more. In one Medscape 2024 Reporta fourth-year plastic surgery student said the salary figures were “a disgrace,” while a third-year psychiatry student said, “There is no need for slave labor to learn a trade.”
In 2023, Humam Shahare, a fourth-year medical student in Arkansas, and some of his colleagues created a research poster showing that the average PGY-1 salaries of $65,000 earned by plastic surgery residents earned them more than $23,000 after deducting living expenses.
“It’s not about how much you earn, it’s about how much you have in the end,” Shaare said via the OR. “That’s what you’re going to answer: ‘Are your accounts settled?’”
Add in student loan payments, housing costs, and potential child care for a family that could have more children each year, and you can see how a resident who puts in, say, 60 to 80 hours a week and still gets paid five figures might feel squeezed—regardless of where the poverty line actually lies. Or as one pollster in Medscape’s resident salary survey said, “I’m barely surviving.”
Here are some of the other random thoughts floating through my head lately. In old-fashioned sportswriting parlance, we call this clearing the notebook.
A space patch from a WCI friend, doctor and astronaut
As I wrote about seven months ago, Gretchen Green is one of the coolest physicians around, especially since she went to space last year as part of the Blue Origin NS-32 mission and became the first commercial female physician astronaut. You can read more about it in her recent WCI guest post titled Redefining Risk: Lessons from Medicine, Money, and Spaceflight.
After telling her about my interest in space (mainly through my father, who designed a few crew patches for those who launched during the space shuttle era and who designed the original US Astronaut Hall of Fame building in the 1990s), she generously sent me one of her personalized patches that she flew into space on May 31, 2025.
Here it is in all its glory.
A few notes about the patch. The chest x-ray spacesuit was designed in honor of her career in radiology, and part of the patch’s color palette is Radiology Green (hex #00A676).
As the famous saying goes, you can take the astronaut out of the doctor, but you can’t take the doctor out of the astronaut.
What are WCI readers actually reading?
I always find it funny that we get a ton of traffic to all of our Backdoor Roth IRA posts every year from December to February, regardless of when those posts were actually written (which is why we are constantly updating them and republishing them every few years). Anyway, I happened to check WCI’s website traffic on January 1st at noon CT, and this is what I found. The four most visited posts were all related to the Backdoor Roth IRA.
Yes, everyone loves a Backdoor Roth IRA after all the champagne has been drunk and the New Year’s balloons have deflated.
Just in case you want easy access to all those Backdoor Roth posts, here you go:
On the way to the HOF
A warm congratulations goes out to Dr. Flip Homansky, who is part of the class of 2026 for induction into the International Boxing Hall of Fame. Although I have been a HOF voter for the past ten years, I did not vote in the Non-Participants category, where Homansky was elected.
After completing his residency in internal medicine in 1979, Homansky moved to Las Vegas and served as a ringside physician there for 20 years. As noted by the IBHOFhe “was at the forefront and instrumental in many protocols to improve boxer safety, including reducing championship rounds from 15 to 12 and mandatory testing for HIV and anabolic steroids.”
Here is Homansky in action during the 1999 Mike Tyson vs. Orlin Norris fight.
More information here:
Your crystal ball predictions for 2026
What’s the worst financial advice you’ve ever received?
Money song of the week
As we bid a fond farewell to Grateful Dead guitarist/singer Bob Weir after his long, strange journey, we revisit the time he and Jerry Garcia were interviewed about the jam band’s wild success beginning in the 1960s. Basically, he was asked what it was like to be rich and famous, and Weir, who died last month at the age of 78, responded with an interesting answer about pistachios.
Sometimes, if you have enough money, small problems are not even worth considering.
The Grateful Dead released the song in 1974 Money Moneyco-written and sung by Weir, and it tells the story of a man hunted by his partner for, you guessed it, money.
As the song goes,
“She says, ‘Money, honey,’ I’d rob a bank/I just load my gun and walk to the bank/Cut down my neighborhood savings and loans/To keep my sweet Chiquita in cologne.”
The tune has not aged well, and many fans find the message old-fashioned and misogynistic (although some say it was actually more of a funny song). The band apparently only played it live three times, so apparently the members didn’t like it that much either.
Then again, The Dead weren’t known for their deep-cut, 4-minute, 24-second songs. It was known for its bizarrely long concert jams that forced their fans to travel across the country to hear it live. And to give the band their money for years to come.
More information here:
Every money song of the week ever published
Tweet of the week
Apparently it pays to be a pilot.
A Miami-based American Airlines Boeing 737 captain posted his salary history on Reddit, leaving many people speechless.
The pilot’s total year-to-date compensation was $458,000, while hourly pay was $360+ (flight hours only).
Some comments suggest that the pilot was not… pic.twitter.com/3yH1Z5zB1s
– Breaking aviation news and videos (@aviationbrk) December 23, 2025
However, as one Redditor noted, “Start from absolute zero and plan on investing ~$150,000 in your certifications and 10 years of low-paying entry-level jobs before you break even on that investment. And then another 5-10 years before you start making this kind of money.”
How trapped did you feel as a resident? Do you think it is conceivable that a family of four would have to live on around $32,000? What about $140,000?
#docs #poverty #line #random #thoughts #White #coat #investor