SPRINGFIELD — On Wednesday, the Food Bank of Western Massachusetts, Springfield WORKS, and the Western Massachusetts Economic Development Council (WMEDC) hosted a celebration and press event for the cliff-effect pilot program included in the state’s economic-development bill in October.
Representatives from those organizations joined legislators in discussing the $1 million pilot program, which will mitigate the unintended consequences of the so-called cliff effect, which occurs when household earned income increases just enough that families precipitously lose eligibility for public-assistance supports like food, childcare, and housing services, resulting in lower income overall and weakened economic stability.
The three-year pilot program will utilize a monetary support to provide 100 households throughout the Commonwealth with benefits tailored to fill the gap created by the cliff effect as they work toward economic independence from public benefits programs.
Rick Sullivan, president and CEO of the WMEDC, noted that people will always make the best financial decision for their family. However, “if they went into the workplace and took a minimum-wage job for a few hours, or perhaps took a job promotion, their benefits began to almost automatically decline. There’s no incentive to work.”
The cliff-effect legislation, which was introduced seven years ago, is an effort to hold people harmless for moving up in the workplace.
“This is not charity work. This is not a handout. This is a hand up,” Sullivan went on. “It recognizes the importance of every individual in our region because if they’re doing better, then everyone is doing better, including the businesses.”
In short, the cliff effect discourages individuals from advancing in their careers for a higher wage due to the sudden loss of critical services, which ultimately leads to a decline in the standard of living, keeping individuals and families stuck in a cycle of poverty.
“Almost every public benefit we have, whether it’s childcare, housing, food vouchers, or direct financial assistance, is predicated upon income reporting and income requirements,” state Sen. Eric Lesser said. “And if you’re a dollar over — if you’re a cent over — the income threshold, almost all of it turns off automatically. What that means is, over time, people have to decline work, decline promotions. If they go from $15 an hour to $17 an hour, and it triggers losing their housing voucher, the logical and necessary decision is to decline that raise.”
Laura Sylvester, Public Policy manager at the Food Bank of Western Massachusetts, noted that “many of the households who receive emergency food at any of our 164 independent, local member food pantries and meal sites are directly impacted by the cliff effect. Fear of losing benefits prevents people from advancing in their careers, keeping them trapped in a cycle of poverty. It is a major cause of food insecurity and economic instability.”
Advocates for the legislation hope it’s a meaningful first step toward addressing the cliff effect on a much broader scale in Massachusetts.
“This pilot is a tremendous victory for workers and families throughout the Commonwealth,” said Anne Kandilis, director of Springfield WORKS. “To create economic opportunity, we must remove obstacles for people as they work to earn a livable wage by making sure that we do not strip away public benefits too rapidly.”