Suddenly Without: Explaining the Cliff Effect

LG_TCE-logoUnless you work daily in the world of nonprofits or government assistance, or you have benefited from those programs, this is a term you may never have encountered before.

The Cliff Effect.

The Women’s Foundation of Colorado describes what this obstacle means for Colorado residents who are trying to work toward economic independence:

Currently in Colorado, public assistance for the working poor isn’t designed to allow women the opportunity to incrementally increase their wages to work toward self-sufficiency. In fact, as a family’s earnings increase and they rise above the official poverty level,  they begin to lose eligibility for tax credits, childcare subsidies, health care coverage and food stamps even though they are not yet self-sufficient. So although parents may be working and earning more, their families can’t reach financial security. This is called the Cliff Effect, and it results in many women refusing pay increases, forcing them to live a life of dependence.

This is an issue that affects Colorado residents like Work Options for Women students. I-News Network at Rocky Mountain PBS reported its findings in “Losing Ground,” which expounded on analysis of “six decades of reports from the U.S. Census Bureau to track the state’s poverty rates, family income, high school and college graduation rates and home ownership.” The PBS segment on the Cliff Effect illustrates just one aspect of the difficulties families faces in breaking the cycle of poverty and achieving self-sufficiency. Check out the video below to learn more, or visit the PBS site for this enlightening report.

Additional resources // Overlooked and Undercounted // Self-sufficiency: An Illusive Vision