(The Center Square) – Some Ohio economists believe income requirements for public benefits stunt career advancement for low-income workers.
Columbus-based Scioto Analysis recently surveyed 19 economists from around the state. All believed a “benefits cliff” created by strict income requirements to receive public assistance is holding back low-income workers.
Small income increases for low-income workers often lead to large decreases in total income when they no longer qualify for benefits. According to the report, a low-income worker might turn down a raise or the chance to work more hours if they become ineligible for a tax credit.
“There are a lot of barriers to career advancement and this is one of them but a lack of education and skills plays a larger role,” said Bob Gitter, with Ohio Wesleyan University.
The survey follows the recent decision by the Ohio Department of Job and Family Services to introduce a new sliding scale to phase out SNAP benefits.
“Fear of losing food benefits can be a deterrent to taking a new job, working more hours, or even accepting a promotion,” Director Matt Damschroder said of the new scale. “Instead of an all-or-nothing approach, we are creating a sliding scale that encourages people to earn more by slowly reducing their benefits as their income grows. This provides an incentive to accept promotions and pay raises knowing they won’t immediately lose benefits.”
The plan drew strong reviews from economists.
“Benefit slopes rather than cliffs will make the tradeoff between higher wages and lost benefits less severe, but it won’t prevent it entirely,” said Bill LaFayette, with Regionomics.
Others called the move to a sliding scale more fair.
“Eliminating the ‘benefits cliff’ is an efficient policy that reduces disincentives to work,” said Kevin Egan, with the University of Toledo. “Moreover, it is a fair policy change to gradually reduce SNAP benefits, so no households find themselves in such an unfair position.”
