Date: 10/12/2021
Our region’s economic resilience and recovery from the COVID-19 pandemic depends on making sure that pathways to opportunity are open and accessible to all.
Shalonda, a single mother in Springfield, with two sons, age 16 and 10 works as a family service clinician at Square One and is also in graduate school. She recently accepted a promotion, knowing full well that it would cause her to lose her housing benefit. She says, “We’re going to have to move out and hunt for an apartment we can afford. I’ve been avoiding promotions for so long knowing that I would lose all this support, but I’m tired of it now. For years I’ve had to choose between job opportunities and buying groceries. I couldn’t save money. I didn’t grow because of it.”
Public assistance in Massachusetts is structured in a way that can disincentivize work and disrupt financial stability. Workers experience steep reductions in public assistance with only slight increases in wages, resulting in lower net resources overall. This is known as the public benefits “Cliff Effect.” It inadvertently encourages workers to terminate employment or not accept raises in order to keep their safety net, like food, childcare, and housing. This has negative repercussions not only for working families, but for employers throughout the commonwealth.
Shalonda is just one of thousands of similar stories throughout the commonwealth illustrating how the Cliff Effect keeps people from advancing in their careers. One solution is to modify the Massachusetts Earned Income Tax Credit (MA EITC) so that workers can rely on it when transitioning off public assistance. That’s why the Economic Pathways Coalition is proposing legislation (S.119/H.208:) that would create a three-year pilot program using a MA EITC adjustment that will remove the disproportionate impact of the Cliff Effect on family financial stability. This is not only a good idea for workers and employers, but a fiscally responsible solution for the state. Massachusetts will capture increased employment taxes and save on public benefit expenses. We estimate the cost to be less per person than keeping a family on public assistance programs.
Our economic recovery depends on workers being able to enter or re-enter the workforce, retain jobs, and earn increased wages – unfortunately, the Cliff Effect serves as a barrier for many workers to gain access to employment and career opportunities. Our working families need the commitment of the commonwealth to provide them with a great chance to achieve economic stability and financial well-being.
Please contact your state legislators today and ask them to sign onto this important legislation, sponsored by Sen. Eric Lesser and Reps. Patricia Duffy and Carlos Gonzalez. We need to fix this structural problem in our public assistance system.
Anne Shecrallah Kandilis
Director of Springfield WORKS/Economic Development Council of Western Mass
Laura Sylvester
Public Policy Manager, The Food Bank of Western Massachusetts.
