40 ideas: Surviving the ‘cliff effect’

The cliff effect occurs when a family’s income just surpasses the threshold set by federal poverty guidelines for programs like the Supplemental Nutrition Assistance Program (SNAP, previously known as food stamps), Temporary Assistance for Needy Families (TANF), the Child Care and Development Fund, health care coverage, and subsidized housing. In many cases, the increase in wages does not exceed the value of a lost or reduced benefit. According to a 2020 report by the Greater Cincinnati Foundation, “Families often find themselves working harder and earning more but unable to get ahead, ultimately creating a cycle of dependence.”

As a person who reached and survived the cliff effect, I know how difficult it is to navigate this process. Knowing that every step ahead is a small step back can be paralyzing and terrifying. You decline a raise at work. You reduce your hours before a recertification. You figure out how to survive until you reach a position to thrive. 

The path out of poverty includes moments of financial insecurity for so many. States like Illinois, Ohio, Massachusetts and New Mexico are already making great strides to support families in these situations. It is time for central Indiana agencies to work together to acknowledge and address the cliff effect.

As we look to a future of reduced poverty, we need to identify clear and sustainable pathways through our social service programs: Increase the minimum wage. Form and fortify strategic partnerships to support working families and individuals in training or education programs. And provide six additional months of maintained benefits, distributed after a recipient’s income exceeds program eligibility requirements. That gives people the opportunity to grow, without the fear of loss.

My path out of poverty included two terms as an AmeriCorps member, a complete career change, two degrees and immense support from my wife, children, family and friends. I survived the cliff effect because I believed there was something better on the other side. I knew the struggles and setbacks would eventually lead to self-sufficiency and financial independence.

It is our responsibility to create pathways that go beyond surviving the cliff effect. We need to help people thrive.•