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%1 and costs are high. Basic childcare in North Carolina costs $12,360/year2—76%…
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