The “Cliff Effect” Thwarts the Working Poor

Cliff Effect

READ THE FULL REPORT HERE. One stated goal of the welfare reforms of 1996 was to encourage people to enter the workforce. Once there, new work support programs would enable low-income families to rise toward self-sufficiency. But in many instances, those programs have an unintended impact, an I-News at Rocky Mountain PBS inquiry has found. Working families can fall prey to the “cliff effect,” in which even a modest rise in family income can lead to termination of a government benefit, including subsidized child-care, worth thousands of dollars a year. Continue Reading →

Cliff Effect: Jeannett Escarcega

Jeannett Escarcega shows her son, John, 4, a photo on her mobile phone in their east Denver apartment on Sunday, May 9, 2013.

Jeannett Escarcega has first-hand experience with what it means to suffer the cliff effect. That’s what happens when a raise in salary leads to the termination of a work support benefit, leading to what often is a big net loss for the family involved. Continue Reading →

Losing Ground: The Cliff Effect

The measures passed by Congress and signed by President Bill Clinton in 1996 “to end welfare as we know it” were heralded as a ticket to economic self-sufficiency. The poor would be encouraged to enter the workforce and eventually leave all welfare assistance behind. In this Colorado-based scenario, a single working parent with two children is shown breaking even with a combination of wages and work support benefits that include child care assistance, food stamps, Medicaid and income tax credits. However, as the parent’s earnings rise, she begins to lose benefits, with child care assistance the largest by far. The cliff effect occurs when even a modest increase in income leads to a complete termination of a benefit and a large net loss to the family. Continue Reading →

Cliff Effect: Jennine Jeffries

Jennine Jeffries, 39, at the Tivoli Student Union on the Auraria Campus in Denver on Friday, May 24, 2013. She was featured in the Rocky Mountain PBS documentary, "The Cliff Effect."

Jennine Jeffries is a woman with an engaging smile, a firm handshake and an articulate yet unvarnished way of telling her own story: Broken and abusive childhood home, a frequent runaway and juvenile delinquent, alcohol and drug addictions as she became a popular bartender, a stint in jail. But her story doesn't stop there. Continue Reading →

Cliff Effect: Rachel Contizano

Denver City Council member Robin Kneich, left, and Denver Welfare Reform Board chair Fran Coleman talk to fellow board member Rachel Contizano after a meeting in Denver on Wednesday, May 8, 2013. Contizano, a single mother who lost her job in 2009, receives work support and public assistance. She was named to the board after her own struggles with navigating the social services system.

Rachel Contizano, a Denver native, went on maternity leave and was soon notified that her job had been eliminated. A move from New York back to Denver after losing her job eventually led to her appointment to the Denver Welfare Reform Board. Continue Reading →

Self-sufficiency: An illusive vision

In this Colorado-based scenario, a single working parent with two children is shown breaking even with a combination of wages and work support benefits that include child care assistance, food stamps, Medicaid and income tax credits. However, as the parent’s earnings rise, she begins to lose benefits, with child care assistance the largest by far.
The cliff effect occurs when even a modest increase in income leads to a complete termination of a benefit and a large net loss to the family.

The measures passed by Congress and signed by President Bill Clinton in 1996 “to end welfare as we know it” were heralded as a ticket to economic self-sufficiency. The poor would be encouraged to enter the workforce and eventually leave all welfare assistance behind. But for most of the tens of thousands of working poor families in Colorado, the vision of self-sufficiency is illusive. One of the most significant components of the work support programs – child care assistance – doesn’t reach about three-fourths of the state’s working poor and generally fails the other fourth’s attempt to escape poverty, according to an I-News analysis of state data, census figures and Colorado-specific research reports, as well as interviews with benefit recipients, policy experts and government officials. The I-News inquiry found:

Working families can fall prey to the “cliff effect,” in which even a modest rise in family income can lead to termination of a government benefit, including subsidized child-care, worth thousands of dollars a year. Continue Reading →