When the Next Stage team hosted Justin Taylor from Goodwill Industries of the Southern Piedmont a few weeks ago, we were shocked to learn more about the ‘benefits cliff’ in North Carolina and other states. The term refers to the sudden loss of benefits when a person gains a promotion or higher income rate – leaving workers worse off financially than they were before the pay increase.

This cliff is more common than we realized and the impacts on both families and the economy are real. According to Goodwill, “Benefits cliffs force workers to choose between career progression and the benefits they need, undermining upward mobility and businesses’ ability to hire and retain workers.”

In our latest Backstage with Next Stage episode, Candice asked Justin to dive deeper into what this means for individuals, companies and nonprofits, alongside Tanya Robinson-Taylor, Director of Social Policy Advocacy at Atrium Health who shares what Atrium Health doing about the benefits cliff.

Video Transcript:

Candice: Welcome back to another episode of backstage with next stage I’m your host Candace Rawls and I’m also the marketing manager here at Next Stage and today I have two very special guests with me um just Justin Taylor who is a stakeholder engagement manager from Goodwill Industries of the Southern Piedmont and Tanya Robinson Taylor who is director of social policy advocacy at Atrium health so welcome you two.

Justin & Tanya: Thank you Candice yeah thanks Candice!

Candice: and thank you so much for being here today  today we will be exploring the topic of the benefit cliff and Justin you came to speak to our team a few weeks ago about the benefit cliff and we want to just explore this topic a little bit more with our audience because it was truly like an eye-opening topic that I’ve never heard about before so um Justin what exactly is the benefit cliff?

Justin: Certainly so thank you again for just having us on here just to talk about the efforts that we’re doing  so benefits Cliffs  it’s a phenomena that when workers really encounter um when they are making more money um at work that will trigger a loss and public benefits um which will be leaving the worst off so this really occurs when Public Assistance benefits in our states such as child care Medicaid snap and our stage are structured so that benefits suddenly drop off as a cliff once they pass an income eligibility threshold so you know this really impacts workers in North throughout North Carolina in different ways um includes a variety of different factors such as their income and family size.

Candice: Wow I never thought that you know getting a raise could affect somebody losing their benefits like we always hear that just you know reaching the American dream and everybody should have access to Prosperity.  It just doesn’t seem right.

Justin: A great example of this is that one during the pandemic as we are looking to get people back at work what we were seeing that you know folks especially specifically  women and if you want to boil that down a little bit more women of color  after looking back to enter the workforce  as wages were looking to be increased  Child Care was one of the main benefits that was seen to be lost where families were losing up to eight thousand dollars  in benefits.

Candice: wow oh my goodness!… Well you know so benefits clipped we know that it does it forces workers to choose between career progression and the benefits that they need, so Justin from your experience has it this always been an issue or what had kind of brought this issue to the larger light?

Justin:  You know there’s this phrase that like everything in the dark will be brought to light  so this is something that issue that a lot of families and workers have been experiencing  but I think recently it’s been  in  economic and Academia spheres that the benefits class has been really something that’s been looked at as many low-income workers are choosing to be taking care of their loved ones now versus building  and building better future for family and advancing their careers but you know it really leads to folks declining job offers promotion.

I know Tanya’s going to talk a little bit more about like why you know the importance of why employers like Atrium are partnering with us in this, but it really is making it harder for business to hire retain and promote any employees who are meeting their goals their extra metrics and in a way it undermines that can upward Mobility for employees, but it also hurts businesses at the time when we’re already experiencing some Workforce sort of shortages. I actually was reading during the time going to work in the pandemic there was a time where our economy wasn’t flux  and this was an issue that was really impacting how we just keep our economy strong and grow.

One of the things is you know I think you had talked about earlier is that one of our strategies through the benefits Cliff Community Coalition is really starting with raising awareness around this pressing issue because  a lot of employers as well as workers are not familiar with the benefits Cliff they’re already doing the math in their head this is like oh if I make this extra dollar I’m going to lose my benefits.  Just one of the things that really as a lot of employers are raising wages they don’t take an account that the benefit of public benefits which are helpful for families to move out of poverty getting attendantly having some unattended consequences after we’re looking to increase wages.

I know that some of the things that some of our employer Partners have been experiencing as we’re trying to do the proactivate that we want. The thing is we want employers to increase wages. We want people to be able to provide and provide for their families and support their needs and grow in their career.  That’s some of the things that we’re just challenging that you know we really want to bring awareness to this issue.

Candice:  I love that you mentioned that part about like you want the you’d want economic mobility and you want to continue to keep raising their how much they’re making in their income versus just saying like oh well do what is the solution just not to pay people more money.  I don’t think that that’s really the solution.

Tanya I’m curious  from your perspective  how you’re seeing this impact on employees at Atrium Health and what is Atrium Health doing about the benefits cliff?

Tanya:  Yes thanks Candice, so you know financial stability for our teammates is a critical focus of Atrium Health and one of as one of the largest employers in the region we strive to provide family sustaining income comprehensive benefits and programs for career advancement all which in turn we hope will help Drive economic Mobility for our teammates in the communities that we serve.  The complexity of public benefits programs means that many employers and workers may struggle to understand the timing and magnitude of benefit loss and this uncertainty can prevent teammates from actively seeking opportunities for career advancement.

As we’ve talked about for their teammates who do advance without the knowledge of when assistance will end can find themselves in situations where their standard of living does not improve or even declines and for many the threat of the loss of public benefits is a deterrent to working additional hours, working overtime, potentially pursuing an education, or even accepting a new position that could lead to support economic mobility and financial Independence.

This is a really important Workforce issue that employers need to be aware of not only because benefits Cliff can present challenges with hiring and retaining employees but most importantly because it can create economic disincentives for career growth.

What are we doing about it you ask? So we’ve joined a growing diverse group of North Carolina businesses and nonprofits to address this issue the Federal Reserve Bank of Atlanta who has been doing incredible work around the benefits Cliff has developed the career ladder identifier and financial forecaster tool which is this electronic benefits calculator that can be used by employers to see the impact of wages and advancement to help an employee make informed decisions and so we recently launched a pilot program to test the best use case for this tool as a large employer.  Our pilot program has a multi-prong approach we’ve begun with raising organizational awareness as Justin has already mentioned. You know many of our senior leaders and the board direct supervisors may not even be aware of the benefits clip and how it’s impacting our teammates.

We’re testing helping teammates navigate The Cliff by partnering with Commonwealth Charlotte. It’s a local non-profit here that provides Financial counseling services and they will be working with our teammates enrolled in the pilot utilizing the tool and assisting them developing strategies to navigate their personal finances around the cliff.  We’ve joined forces with Goodwill and others to develop a policy and advocacy strategy to influence policies and laws to minimize the impact of the benefits cliff and so we really feel like engaging in this pilot will assist us to glean important information about how to mitigate the impact of the cliff as our teammates move up the economic ladder and we also hope that this pilot opportunity holds great promise to inform not only our internal policies and practices, but to serve as an example of how large employers can utilize the cliff tool and support their teammates to address these barriers.

Candice:  oh that’s awesome!

Justin:  Just to kind of piggyback on that we really I think  that last Point Tanya made it was really important developing a policy and advocacy strategy we know that at the end of the day policy really is what’s going to make the biggest difference but we know that policy takes some time. The average year for a bill to get passed especially in the federal government it’s about 10 years.  We know that it takes some time for us to really enact some of these changes and then with the employer pilot we’re really trying to showcase that hey employers are already making the case we’re showing the proof points of how they can really make a difference around  solving public benefits to make sure they have a strong and healthy workforce, but one of the things that we really know is saying hey lawmakers policy makers we need your support we need your help we need to make sure that this is an issue that not only affects people who are  on the lower end lower wage scale, but people in their communities across not only just urban areas but also in rural communities as well too.

Something that is affecting all a lot of folks in North Carolina and we know that a lot of we’re we’re actually really focusing on how do we develop some great strategies for businesses to take advantage of  we actually have developed a microsite that houses a lot of these strategies some case studies our advocacy plan and things of ways that what are some recommendations that employers can use to help their staff overcome benefits  and so many strategies can be deployed  to little to no costs.

While others have some more heavier heavier lifts so there’s been examples of some employers who have been instrenting and trying new things how do we really educate our team members to make sure they’re aware  there’s options opportunities to have work we actually work with Commonwealth to develop a low a low interest loan that our employees can take advantage of in the need of the financial assistance to help cover any benefits that have been lost in their career growth.

There’s been examples of how employers can do work but ultimately policy making policy makers and lawmakers are really where we would like to spend a lot of our energy our energy I’m over the next course of this project over the next course of this Coalition because we know that they can really make a difference.

Candice:  Well it sounds like both your organizations and Atri is doing a lot to help resolve this issue and Justin I learned something new today I didn’t know that it takes 10 years for you know a bill to be passed on so that was new to me  and I love that you’re also partnering with different organizations like Commonwealth I’m familiar with them and that they’re able to you know help people with their budgeting and their finances and just help them make the right choices for them and their family.

Thank you both for being here today this was a great conversation I’m sure our audience learned a lot and they have a lot of valuable information to take away, Justin I’m going to share the microsite with our audience as well is there any other final words that you would like the people out there to know and how they can engage in this issue?

Justin:  Definitely, so one of the biggest things that we really want to you know really hold on into is that you know knowledge is power we want to help be make sure that people are aware around benefits Cliffs are  and make sure as widely as possible  and we also welcome other businesses and nonprofits to join our Coalition. Recently we actually just conducted a  an advocacy and awareness campaign really focusing on focusing on connecting and making Business Leaders as well as policy makers across the state of North Carolina aware of the benefits cliff and what is it doing to the constituents the people that they serve  and then we really usually hope that there’s some opportunities for some policy changes that happen in the next legislative session.

I’ll also say that you know a lot of folks have been asking about what are some of the solutions that we’ve been looking at but there’s has been a great examples across the country around so States who have done some great work around policy Solutions such as how do they Implement transitional benefits programs is there any changes in child care subsidies  what is it like to have an individual development account that really can house money for folks to make an investment and to prepare for those income lost those loss in those transitional benefits. We really want Partners  like especially employers here to really partner with us and get a better understanding of their Workforce and I think that’s one of the beauties of this employer pilot that we are working on partnering with the federal reserving of Atlanta and Atrium Health is how do we get a better understanding of our Workforce that we can change the relationship between employee and employer and I think there’s some great opportunities for us to be showcased because employers really want to do good by their employees they want to make sure they’re supporting they have their those goals met their needs.

There’s opportunities for them to do internal promotions  and increase their their professional development goals so we really want to make sure that hey employers you can be a part of the conversation non-profits it can be part of conversations workers you can be part of the conversations and how now that we’re doing all this work how we can get policy makers and lawmakers a part of this conversation as well.

Candice: yes wonderful well yeah it definitely sounds like a win-win for the company and for also the employees as well  and I’m glad that this is coming to light because sometimes it seems like there’s a stigma to people who are on benefits and they’re not working you know sometimes I hear people like oh they’re just lazy because they don’t want to work,  but I’ve never even thought about maybe they’ve been trying to work but now they can’t make a certain amount of money because they might lose their benefits so this is definitely shed light on that as well.

Justin:  I think  you made a great point that these  that people who are receiving public benefits  are these receive public Ones based on an income threshold so these are people that are working.  It’s not people who are just who are unemployed or not not working, but these are people who are working who are really doing this Mental Math around okay based on what I earn I can’t make up my and that’s the cause of living is increasing as inflation is coming becoming an issue in the parent  these are things that you know wages also have not been able to keep up with this this rapid growth and the cost of living.  These traditional benefits can help but ultimately the goal is not to keep people on benefits but it’s ultimately how do we help move people forward  and have more uproot Mobility.

I also like to end this message we’ll say this that is also really goo  a good practice to really solve benefits because not only does it decrease its government revenue in investing in these programs what as we move forward people more often instead of have them be just continually recipients of public benefits but it also includes tax minis as we’re investing more into our economy as people are increasing their wages  those are some of the positive benefits of how it’s just really is all good around for everyone.

Candice:  yes I love it, thank you for sharing the positive benefits  and thank you both for being here with me today  we appreciate you having this conversation I’m going to share the micro site and yes so we encourage everyone if you would like to learn more about this issue I will like I said I’ll leave the microsite below and until next time we hope that you continue to make an impact and keep striving to make the world a better place!