Building economic security for yourself and your family is the dream for many Americans. Navigating the financial barriers to economic mobility can be challenging and stressful to overcome. One significant barrier occurs when career advancement and associated wage increases puts a family above the income eligibility threshold for public assistance programs. This is a reality experienced by many families in our community.
This financial barrier comes in the form of the benefits cliff. People face a benefits cliff when they receive public benefits in the form of housing vouchers, food (such as the Supplemental Nutrition Assistance Program) or childcare subsidy, earn a raise and then discover that they make too much money to continue to receive certain benefits. However, they are not making enough money to sustain themselves and their household because at times the value of the loss of public benefits is greater than the wage increase.
Due to the loss of these programs, career advancement opportunities can result in the family being financially worse off (a benefits cliff) or no better off (a benefits plateau) than before the wage increase.
The realities of balancing a tight budget with no room for unexpected reductions in income or increases in expenses are stressful. However, finding and keeping a job, and continuously working to improve your skills and salary, are the best long-term strategies for economic security.
For the past 18 months, Goodwill Industries of the Southern Piedmont and its strategic partners, Federal Reserve Bank of Richmond, Federal Reserve Bank of Atlanta and NC Budget & Tax Center have been championing solutions to mitigate the impact of the benefits cliff on workers and their families in Mecklenburg County. Goodwill has also been collaborating with other health and human services organizations, local employers, financial services and workforce development organizations, and local government to develop tools and solutions that will inform policy decisions, employers, human services agencies, advocates and workers.
The goals of Mecklenburg County Benefits Cliff Community Project are:
- developing community consensus on the impact of the benefits cliff for workers in our community
- identifying a shared policy agenda
- cataloging practical solutions for multiple stakeholder groups to address some of the disincentives created by benefits cliffs
- developing a playbook which will utilize the Career Ladder Indicator and Financial Forecaster (CLIFF) Dashboard customized for Mecklenburg County
The workgroup has made great progress elevating this work to key stakeholders and identifying policy recommendations and solutions for various stakeholder groups. Now, the project is moving into Phase II – raising awareness about the benefits cliff to the community and igniting others to join Goodwill in advocating solutions that inform policy decisions.
The area for needed policy changes the workgroup initially wants to address is the benefits cliff for childcare subsidies. Losing childcare assistance can result in a drastic benefits cliff. Advocates can address the benefits cliff by recommending that childcare benefits are phased out as families’ incomes rise. Which is why the organization has partnered with NC Budget & Tax Center to identify and advocate for solutions that inform the childcare eligibility requirements and other policy levers at the state and local levers. More to come on how you can help us in our advocacy efforts.
One of the core values for Goodwill is build a village. We know success is not achieved alone and our approach is collective, which is why our partners in this work are the following organizations:
- Federal Reserve Bank of Richmond
- Federal Reserve Bank of Atlanta
- NC Budget & Tax Center
- Leading On Opportunity
- Mecklenburg County
- Charlotte Works
- Atrium Health
- United Way of Central Carolinas
- Freedom Communities
- Financial Security CLT
In addition to these organizations, we are grateful for our process facilitators, Rodney Adams, of R. Adams & Associates and Linda Christopherson, of Linda Christopherson & Associates who have helped us to guide the project, research solutions and bring key thought leaders to the table.
“Because Goodwill has a commitment to help people to see possibilities, seize opportunities and prosper, the impact of benefits cliff is something that we feel compelled to find solutions to address. I’m proud so many other organizations have joined us in championing and raising awareness for this issue. Our hope is to remove as many barriers as possible that keep people from pursuing the life they want to achieve,” said Chris Jackson, president and CEO at Goodwill Industries of the Southern Piedmont.
At the heart of this work is to promote dignity, family stability and economic mobility for those affected by the benefits cliff. The cliff experience can leave individuals feeling defeated or hopeless as they support their families. Goodwill is here to change the narrative and provide solutions for individuals and their families looking to prosper.
If you would like to receive project updates and join us in advocating for solutions to eliminate the benefits cliff and building pathways that help people pursue the life they want to achieve, please contact LaRita Barber at LaRita.Barber@goodwillsp.org or Justin Taylor at Justin.Taylor@goodwillsp.org.