‘Cliff Effect’ leaves people unable to afford an income raise

Keleigh Pereira | Family Self-Sufficiency Director, Greenfield Housing Authority
Member of Coalition to End Hunger Policy Team

“The Working poor” is a term that is commonly used in the world where I live and work. I run a self-sufficiency program that supports vouchered tenants for two housing authorities, and a public policy task force for the Franklin County Resource Network. I participate on many other coalitions and community groups, including the Communities that Care Coalition and the Coalition to End Hunger. I am also a commissioner for the Franklin-Hampshire Commission on the Status of Women and Girls.

Through my work, I’ve come to realize that the term “self-sufficiency” is kind of a lie. Who is truly self-sufficient? Not me. I rely on my family, my partner and a few dear friends when things get rocky in any aspect of my life. While raising two children, I have used the very systems that I help others in the community obtain — and I am not alone in this. Many of the staff working in programs that serve a low-income population in western Massachusetts, actually qualify for their own benefits. Some of us only make it because we have learned how to “rob Peter to pay Paul,” or we have resources in relationships.

The working poor isn’t just an anecdotal term we throw around. It’s a clear and true existence for many people who rely on resources like SNAP benefits, heat assistance programs, food banks, and cash assistance programs. Many of us come home at the end of the day uncertain how we will afford an increase in the cost of our insurance or electric bill. We’re forced to make decisions about affording a medical procedure. We have to consider whether to pay for our child’s soccer cleats because they grew out of the pair we purchased a month ago.

Unfortunately, there is an inaccurate perception that poor people don’t work, people on food stamps aren’t employed, and people who live in subsidized housing are lazy free-loaders. The truth is that most of my programs’ participants do work, yet still need all of those benefits — and more. In fact, it’s common for me to have someone in my office who asks me to help them determine if the 50 cents raise they’ve been offered is going to negatively affect them. This is what we refer to as the “Cliff Effect.” It’s this period of time (which could be years for some, or forever for those that don’t receive raises in income) where people have to start paying out-of-pocket for things like childcare or health insurance, making such a huge negative financial impact that they can’t actually afford the increase in pay.

Make no mistake, keeping people in poverty is systemic and part of our culture. It’s the way that we force income inequality and barriers to success and then blame the people who suffer from it. These cliffs can be very steep or can be gradual for people earning income AND using benefits that have helped them to stay afloat. Often times when more than one system has been supporting the security of a family, these cliffs can make people feel powerless. They find themselves earning too much to maintain stability, yet not enough to cover the loss. For example, if I lost $200 in food stamps, I would need to find that in the pay increase, which may not actually be seen in my paycheck. If the supports have been hard to get and have long wait lists (such as housing assistance or child care) people feel reluctance to work more, or may feel like working is actually hindering their families’ financial security.

Many federal assistance programs were designed to help people who are not currently employed, and may never be. I am thankful to work in a community with both social service systems and legislators who recognize this issue, and are working to combat the impacts that keep from incentivizing our community members to reach their goals of independence.

I participate in the Coalition to End Hunger where we are supporting policy legislation for a pilot program that will make a sustainable difference in this issue.