Goodwill® Industries of the Southern Piedmont and Goodwill of North Georgia are partnering with the Federal Reserve Bank of Atlanta and Atrium Health to address benefits cliffs. They will conduct a 12-month pilot of the CLIFF Employer Tool, developed by the Federal Reserve Bank of Atlanta, to analyze the financial implications of raising wages for their employees. The tool is also a planning tool to help employees make the best decisions as they advance along their career. UNC Charlotte Urban Institute will be conducting an evaluation on the success and key learnings of the CLIFF Employer Tool.
Workers encounter benefits cliffs when a pay raise would leave them worse off financially. This happens when public assistance “drops off a cliff” at a certain income level. Workers may decline job offers, quit, or choose not to apply for jobs because a pay increase could trigger an even greater loss of benefits.
“By better understanding how benefits cliffs can create economic disincentives for career growth and, thus, also be a barrier to accessing health care, we can be better positioned to support those who are navigating these issues. These efforts will help us guide policy makers on designing more innovative programs to help individuals and families rise out of poverty,” said Dr. Kinneil Coltman, executive vice president, chief community & social impact officer, Advocate Health, of which Atrium Health is a part. “We’re honored to partner with Goodwill Industries of the Southern Piedmont, Goodwill of North Georgia and the Federal Reserve Bank of Atlanta to build the first pilot of this kind in the country.”
For businesses already facing workforce shortages, inflation and a looming economic downturn, benefits cliffs make hiring and retaining employees even more challenging. The pandemic decimated the childcare industry, where employment lags pre-pandemic levels by 9.7% and costs are high. Basic childcare in North Carolina costs $12,360/year—76% more than in-state tuition at UNC-Chapel Hill ($7,020/year). Meanwhile, food and gasoline prices in the South remain high. Food banks across North Carolina are struggling. Working parents cannot afford to lose benefits for necessities like childcare.
While Goodwill is a leading workforce development nonprofit and works hard to create access to promising careers for individuals, the organization is aware of the challenges many team members face, and is working to address those obstacles for its team and community through an effort called the Benefits Cliff Community Lab.
“Goodwill is committed to building pathways that help people pursue the life they want to achieve, and that includes our own team members. As we continue to increase wages for our team members, we are committed to finding solutions to address the impact of benefits cliffs and remove as many obstacles as possible so they can prosper and thrive,” said Chris Jackson, President & CEO, Goodwill Industries of the Southern Piedmont.
Learn more about the CLIFF Employer Pilot and the Benefits Cliff Community Lab project at benefitscliffcommunitylab.org.
