Posts Tagged ‘benefits’

David Blatt at OK Policy does a nice job of explaning the “cliff effect”, whereby people lose important public benefits as their earnings increase. This means that struggling families who manage to raise their incomes face a sort of “tax” on their efforts toward economic self-sufficiency:

The cliff effect is most dramatic for Medicaid health insurance coverage, which tends to be an all-or-nothing benefit. Children in Oklahoma are eligible for Medicaid up to 185 percent of the federal poverty level, while adults lose eligibility when they make less than 50 percent of the poverty level. Other work support programs, including the earned income tax credit, the food stamp program, and child care subsidies, minimize the cliff effect by phasing out the amount of benefits at higher incomes, or in the case of child care subsidies, requiring higher co-payments. The cumulative effect, however, is that for most low-income workers who are attempting to move up the income ladder, additional earnings can be largely or fully offset by higher taxes and the loss of benefits. At a certain threshold, workers find themselves in a situation where the rational response to an offer of a raise or a better job is to respond, “Sorry, but I just can’t afford it.”

I did some work on this issue a while back, in order to better understand what exactly those “cliffs” look like to our families. We found that a single mom with two children takes home an average of just 34 cents for every additional dollar she earns, with the largest impact (as Blatt notes) caused by the loss of health care coverage for her and her children.



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Oklahoma Policy Institute puts out a monthly publication called Numbers You Need, capturing key economic and budget trends in Oklahoma. It’s a good quick way to keep track of conditions in our state.

Their February report (PDF) indicates that the state is faring better than the rest of the nation, with key indicators moving more mildly than elsewhere. So while the number of unemployed in Oklahoma spiked 32 percent since September and the unemployment rate has risen from 3.8 to 4.9 percent, the state is still in considerably better shape than the rest of the nation (whose unemployment rate was 7.2 in December).

Meanwhile, the inflation rate was 0.0 percent over 12 month period since December. Obviously that’s mostly due to the decline in gas prices. The overall rate conceals increases in areas like food and beverages, though, which were up 5.8% for the year in the South region. Families reliant on food stamps thus saw their food budgets stretched tighter, as the benefit is only adjusted on an annual basis.

Finally, enrollment in most work supports in Oklahoma showed only modest growth, with increases of 4.2 percent in food stamps, 4.0 percent in WIC, and just 0.3 percent in Sooner Care (Medicaid). Child care subsidy participants actually declined. Since this benefit covers only child care for the purposes of work or training, rising unemployment may actually make it more difficult to keep children in early childhood programs.

Anyway give it a read, sign up for their email updates, join their facebook group (but not while at work!), or follow them on Twitter. (Way to skip the blog and go straight for the micro-blogging, David!)

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Poverty Fact of the Day

“Of the more than 10 million families living in poverty in the United States, only 7 percent receive all four major types of support — tax credits, Medicaid, Food Stamps and child care — for which they qualify, and one in four families living below the poverty line receives no benefits at all, according to SingleStop USA, a nonprofit group that helps poor families navigate the public assistance network.”

Vestal, Christine. “Policy challenge – How to expand safety net.Stateline.org, January 5, 2009.

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The National Women’s Law Center is hosting a webinar on September 10, noon Central time, called “Planning for the Future: What Working Women Need to Know about Social Security and Retirement Savings.” The webinar is aimed at service providers, advocates, and individuals. Registration is free – Register here.

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