Policymakers at the national level looking for ways to strengthen economic opportunity too often fixate solely on expanding government programs. Instead, they should embrace a simple goal: eliminating barriers faced by people striving to improve their situation. Removing work disincentives in the social safety net is the best place to start.
A clear example of this kind of disincentive is the benefits cliff: a circumstance in which a raise or a new job can trigger a disproportionately large reduction in safety net benefits, making the household worse off.
In an episode of Sutherland Institute’s Defending Ideas show, a former safety net participant told me about her experience of earning just $20 more on a paycheck, which led to a reduction of $600 worth of medical benefits.
Aside from the shock to household stability, such experiences can create the impression that accepting work opportunities — such as a job offer, a raise, or working more hours — is not actually worthwhile for a family.
According to the Georgia Center for Opportunity’s benefits cliffs calculator tool, a Utah single mother of two could typically start to see these “cliffs” between $25,000 and $35,000 in annual earnings, or about $12 to $16 per hour.
To read the full article in the Washington Examiner click here.
