If you've never heard of the Cliff Effect don't feel bad most people haven't. It's one of those things that you most likely wouldn't know about or understand unless you have been directly impacted by it. It's so mysterious that even those who ARE impacted may not know the technical name for what they're experiencing. The Cliff Effect or Benefits Cliff as it is sometimes called, describes what happens when the working poor begin to earn more income and begin to lose basic needs subsidies such as food stamps, subsidized housing, subsidized childcare and health insurance benefits. It sounds like this is a good thing because isn't that the goal? For people to be working and no longer need subsidies to survive?
Unfortunately, more people ARE working but they aren't earning enough to completely escape the subsidy trap. There was a time when working hard and earning raises and promotions could put you on the path to self-sufficiency and independence from the welfare systems and subsidies. That is not the case in our current society. The cost of living has outpaced our wages in such a way that people are turning down raises and promotions because those wages could put someone in a WORSE financial position. Can you imagine?
There have been many pieces written about this issue and I've seen people argue that this is just "another leftist excuse" made to expand our budget to include more money for subsidies and "make excuses for those who don't want to work". Neither of these accusations describe my opinion about what needs to happen. From my perspective what needs to happen are a few things,
We need to be working with our local, state and federal legislators to first educate them about how this issue is impacting people. Many of the legislators that I have spoken to were not familiar with the Cliff and were eager to learn more. People are being impacted financially, that's obvious but they are also being impacted emotionally and psychologically. Imagine getting up and going to work every day and the more you work, the worse you're doing. This is an issue that needs to be addressed in a bi-partisan way. Democrats and Republicans ultimately want the same thing when it comes to getting more people off of public subsidies, into the workforce and in a better financial decision. They don't always agree about how to get there but we've seen some possibilities for joint introduction of legislation that can reduce the number of people facing the decision to work more or stay stagnant and be able to keep their housing and childcare.
Another way that I think we can give families some relief involves administrative changes within the agencies that manage subsidized programs, such as housing and childcare. The criteria for eligibility can be changed to "ramp" people off of their subsidy instead of complete and automatic ineligibility. Currently if someone is even $1 over the eligibility guidelines, they will no longer qualify for housing subsidies. A .25 raise could put a family at risk of homelessness.
Workforce Development programming led and facilitated by people who understand the impact of the Cliff can help their clients navigate the issue more effectively and work with employers offering livable wage jobs instead of wondering why they see the same people rotating in and out of the program because of the Cliff.
Changing the narrative
Of all of the impact that the Cliff Effect has on people, I believe the emotional and psychological is the most long lasting. Imagine getting up, going to work every day, leaving your children day in and day out, in a lot of cases, working multiple jobs to make ends meet and the ends never meet. Then imagine that you are constantly described as a person who is "waiting for a handout" or are "lazy" and just "don't want to work". Every step you take towards independence is met with another brick wall or obstacle that has nothing to do with your abilities or efforts, but you are blamed anyway. It has an impact on the way you view yourself. You may begin to think. "why should I even keep trying?' There is a certain amount of despair attached to working until you're bone tired but not getting any further ahead.
I believe that we all have a basic responsibility to learn more about the systems and policies that are keeping people poor. We have a responsibility to find solutions to fix the systems and policies that may have had good original intentions but now have unintended negative consequences.
If you’re interested in learning more or have suggestions for solutions, contact me: email@example.com
Learn more about the Cliff here: http://theconversation.com/getting-poorer-while-working-harder-the-cliff-effect-113422.