To escape domestic violence, Joyelle packed her bags, moved to Georgia, and applied for public housing. She was determined to turn her life around, and things were looking up when the state of Georgia offered her a good job.
But that sense of hope faded when Joyelle found out that if she took the job, she would no longer qualify for public housing. The amount she would lose in housing benefits would outstrip anything she would have gained from taking the new job. Joyelle experienced a common feature of our public assistance programs—something called a welfare, or benefit cliff. Benefit cliffs occur when a family’s breadwinner, or an individual, discovers that his or her family will become worse off economically by earning more money. For example, when someone on welfare starts making more money, either through a raise or new job, they may lose certain local, state, and federal benefits. This means people on welfare often don’t have a good incentive to get a better job or try and improve their economic situation.
Joyelle added: “You have help but then when you try to help yourself you are faced with adversities.”
The Georgia Center for Opportunity, a nonprofit and nonpartisan organization in Peachtree Corners, Georgia, knew this was a big problem that state lawmakers needed to address.
Randy Hicks, president and CEO of the Georgia Center for Opportunity, stressed the problems with encouraging people on welfare not to work:
“These [welfare] programs are dehumanizing. They are robbing people of what it means to be human. If you just take a moment to think about what it takes to be you, you’ll see in yourself and you’ll see in others that a job is more than a source of income. It’s a source of pride, purpose, belonging, meaning—all those things come together. The reality is, what government programs do is measure the individual only by material measurements. We are strictly material beings from a government perspective.”
Hicks pointed to Abraham Maslow’s hierarchy of needs as an example. The government takes care of those base level needs that Maslow points out: food, water, safety, etc. But then the government, through welfare programs, puts a ceiling across the top of that basic needs level and makes it very difficult for an individual to meet the needs at the next level. Hicks added: “They [the government] make it very difficult to climb up that pyramid in order to develop oneself and find meaning, purpose, and belonging that many of us find as we create, as we collaborate, as we work towards something. That’s why you can find someone with combined welfare benefits of $75,000 and still find a lot of despair in those households and in those individual lives. They are being robbed at a fundamental level of what it means to be human.”
Through years of working with underserved communities throughout the state, GCO heard hundreds of stories of people who experienced the same challenge as Joyelle. When people on public assistance try and earn more money, they often lose their public benefits. The system is essentially trapping them in a cycle of poverty and preventing them from improving their lives and moving off of welfare.
Although GCO knew this was a systemic problem across the country, they didn’t have the data to back it up. This revelation led them to launch an innovative benefit cliff tool in 2021.
GCO created a tool and website that shows the perverse incentives in welfare programs and how they often trap participants in a cycle of poverty.
Here’s how it works. The tool analyzes the welfare programs of eight states: Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, and Texas. In a drop-down menu, a user can select the state and county and what programs an individual may participate in. It then shows you the welfare cliffs that a person may encounter based on the programs they are enrolled in. For example, you can see how a single Texas mother on housing assistance and childcare support can experience a welfare cliff if she increases her pay, even by just a few cents. By taking a pay increase, that single mom can lose her housing benefits.
This problem exists in every one of the state’s GCO analyzed. We need a safety net in our country that helps struggling and vulnerable communities. But these programs shouldn’t punish people like Joyelle from working hard and trying to improve their life.
“This tool is important and unique because, for the first time, it references and provides a model that demonstrates how welfare programs, alone or in combination with other programs, create multiple benefits cliffs for recipients that punish work. Something that is supposed to be a safety net actually is functioning more as a snare net, and traps people.”
GCO hopes this tool will also help lawmakers understand that although their policies are well-intentioned, they often hurt the people they were intended to help. State leaders can and should reform the system to address this systemic problem. Hicks remarked:
“This tool is not just giving us on the policy side a picture of how these programs interact and impact people. It also gives that picture to lawmakers and agency leaders who have taken for granted that we’re just doing a good thing. In reality, while they are keeping people often from complete destitution, they are keeping people trapped in this cycle of poverty. It’s easy to say ‘you’re doing harm.’ It’s another thing to show them with data how they create that harm.”
GCO plans to expand the tool to include data from Arkansas, Oklahoma, and West Virginia, and then eventually from all 50 states.
GCO’s Benefit Cliffs tool has only been around for a few months, but it is already having a huge impact—attracting significant interest from nonprofits and organizations working on employment and welfare reform.
A large nonprofit in South Carolina, SC Thrive, is using GCO’s tool for case management purposes. SC Thrive has government contracts that work with people in poverty. Their focus is on moving people into work in order to help them become self-sufficient, and they have been frustrated by the role that benefit cliffs have played in stifling their efforts.
With the help of GCO’s model, SC Thrive is now able to explain to clients where they will see reductions in benefits and how they can work together to overcome the challenge in order to keep working.
In addition, the Secretary of Human Services in Oklahoma is using GCO’s tool to convince the Oklahoma Governor and state legislature to pass welfare reforms. The Secretary told GCO the tool will help him demonstrate this systemic problem and persuade state leaders that changes are needed.
Next, the Secretaries Innovation Group, a membership organization of state human service and workforce secretaries invited GCO to present the model and related research on the health effects of welfare at an event in November 2021.
Finally, researchers and policy experts across the country are using the model to better understand the benefit cliffs problem and propose reforms. Scholars at state think tanks, the American Enterprise Institute, and Winston-Salem State University are all using the model in this way. In the first week of November, GCO is planning on meeting with potential allies in Washington DC to further expand their list of partners advocating for needed changes.
With this recent success, GCO is mapping out a more robust strategy to share the tool with media, other organizations working on welfare reform, and policymakers. GCO envisions this tool as a breakthrough opportunity to address a substantial problem for the millions of Americans on public assistance. This idea could help end one of the longest standing obstacles people on welfare face.
State Policy Network has worked alongside the Georgia Center for Opportunity for years—encouraging and coaching the organization to grow, maximize their impact, engage with their community, and focus on innovative approaches to policy reform. SPN is excited to see this idea continue to spread and make an impact across the states.