Some low-wage workers are reluctant to accept promotions or raises because it will reduce their amount of government housing assistance and make it harder to make ends meet.
Earning a little more money may not automatically increase their standard of living if it boosts their income to the point where they lose access to some or all of those benefits. That's because the value of those lost benefits may outweigh their income gains.," for years to learn why workers weren't succeeding at retaining their jobs following job training programs.
Given the possibility of a downside, many Americans in this situation decide that it's better to decline what on the surface looks like a good opportunity to escape poverty. This uncertainty leads workers like Josie to forgo raises rather than take the risk of getting poorer while working harder. Having to worry about the potential loss of benefits that keep a roof over their heads and food on their table prolongs their own financial instability.
The pain isn't just personal. Josie's whole family misses out if she passes on an opportunity to earn more. The government loses a chance to stop using taxpayer dollars to cover benefits to someone who might not otherwise need them. The hospital can't take full advantage of Josie's proven talents.when they should be getting ahead following a raise. But getting higher pay doesn't always make someone worse off.
The cliff effect is something social workers see their clients encounter all the time. And it's maddeningly impossible to figure out for the people experiencing it and researchers like me alike.
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