Ask Dr. E: What should national leaders do to rescue America from an economic trainwreck?

Ask Dr. E: What should national leaders do to rescue America from an economic trainwreck?

Georgia news, in the news, current events, Georgia happenings, GA happenings

Ask Dr. E: What should national leaders do to rescue America from an economic trainwreck?

Dear Dr. E: The American economy is a mess. Few could argue otherwise, at least with a straight face. Inflation is out of control. Our national debt is unsustainable. Social Security is teetering on bankruptcy. Homeownership is out of the question for millions of young people. Credit card debt is unbelievable. The list could go on and on. Is there any one specific thing you believe our national leaders should do that would rescue America from the economic trainwreck that seems inevitable? — REALISTIC AND WORRIED WORKING MAN FROM ALABAMA 

Many of our socioeconomic issues are directly linked to the health of the family structure. Suppose the family structure falls in any civilization. In that case, the number of married couples decreases, economic mobility decreases, median family income decreases, child poverty increases, racial tension increases, and educational tensions increase. The success of an economy is directly related to the stability of the family structure. You cannot have one without the other. Eric Cochling of the Georgia Center for Opportunity says, “To reinvigorate opportunity in America, we must start by restoring the health and vitality of the American family. Nothing less will do.” If the family falls, so does the economy. 

Ask Dr. E: What should national leaders do to rescue America from an economic trainwreck?

Opinion: New Missouri law will help residents escape safety-net cliffs

Georgia news, in the news, current events, Georgia happenings, GA happenings

Opinion: New Missouri law will help residents escape safety-net cliffs

Missouri lawmakers took an important step forward for working-class and impoverished residents this year by enacting Senate Bill 82. This new law will help more Missourians escape from an entrapping safety-net system and experience the dignity and opportunity of work.

On paper, our safety-net programs in Missouri are intended to help people avoid abject poverty and meet their basic needs. These programs should be temporary whenever possible and encourage work and independence, because ultimately what we want for people is stability and mobility. The sad reality, however, is that many of the programs include a hidden time bomb that threatens the very individuals they are intended to help.

For those receiving safety-net benefits — especially SNAP, child care assistance, and Medicaid — there can be a sudden, steep loss of government assistance as a worker’s income increases. This often results in a loss in benefits that far exceeds the additional pay from a raise a worker receives. These unintended consequences of the benefits cliff can be devastating, trapping individuals and families in a perpetual cycle of poverty. It is high time we address this issue and strive for a more sustainable and supportive system.

Why Nonprofits Should Care and What to Do

Why Nonprofits Should Care and What to Do

Why Nonprofits Should Care and What to Do

mother and baby
Key Takeaways:
  • Welfare cliffs and marriage penalties are discouraging people from work and forming families.
  • The cliffs and penalties may mean that our clients are locked into poverty for much longer than they would be otherwise and despite our best efforts.
  • GCO has created a platform that allows anyone to see when a particular family can expect to experience benefit cliffs as they earn more money through work. 

Important Link: BenefitsCliff.org

 

If you work in a nonprofit serving the poor, you need to know that the government benefits your clients receive are likely discouraging them from working or forming a family, two things that research shows could lift them out of poverty the fastest. 

This is an especially tough problem for nonprofits, like GCO, that work to get their clients into good-paying jobs and strengthen their family relationships.

What’s going on?

These disincentives to work are often called “welfare cliffs” and the disincentives to family formation are called “marriage penalties.” Essentially, “cliffs” are generated any time a person receiving government benefits gets a raise at work that causes them to lose more in benefits than they will earn in additional income from the raise. These same individuals can face a similar financial penalty IF they decide to marry. In many cases, they will lose more in benefits than their spouse is able to provide in new income to the household.

While you would think (hope?) cliffs and penalties are rare, they are not. Instead, they are baked into the structure of nearly all welfare programs and many of the cliffs are severe. It’s also important to know that welfare recipients don’t face a single cliff or a single penalty, but they face cliffs and penalties at a number of different points as they have additional income from working or through marriage.

Why does it matter?

For nonprofit leaders, the cliffs and penalties may mean that our clients are locked into poverty for much longer than they would be otherwise and despite our best efforts. For workforce development nonprofits, cliffs could be the underlying reason why your clients don’t pick up additional work hours when they are offered or seem less than excited when they are offered a good promotion. In extreme cases, clients may quit jobs that seemed like a perfect fit simply because they panic when they learn they may lose a major benefit – like housing or childcare.

For nonprofits trying to help strengthen family relationships, marriage penalties may be driving behavior that is otherwise inexplicable, like seemingly happy couples refusing to marry or live in the same home. These dynamics can lead to stress for the couples affected and to a sense that a parent (usually the father) has abandoned the family when, if the system would allow it, he would be in the home. In these cases, children pay the biggest price.

What can you do about it?

Fortunately, we have created a platform that allows anyone to see when a particular family can expect to experience benefit cliffs as they earn more money through work. For nonprofits working with these families, you now have a tool (available for 10 states, with two more on the way) that will allow you to help your clients plan for the future. In some cases, knowing when cliffs are likely to happen will allow your clients to seek a larger raise that will help them bypass or leapfrog a cliff. In other cases, maybe the answer is seeking additional training or certifications that will get your client into a different payscale entirely – one that avoids the cliffs.

In the coming weeks, we will be adding a tool that will allow users to see the impact of penalties on couples who decide to marry. We will also be incorporating a solutions tool that will allow anyone to see how reforming our government benefit programs can actually eliminate cliffs and penalties entirely, giving recipients every reason to pursue work and form stable households.

For GCO, it is this last point – reforming the system – that remains the ultimate goal. In the meantime, we are looking for ways to mitigate the harm caused by the welfare system, so that as many people as possible can escape the system and break cycles of poverty now.



The Success Sequence provides an outline of how to reverse the cycle of poverty in our communities. GCO uses this as a framework for much of our work.

Money Can’t Replace Meaning and Purpose

Money Can’t Replace Meaning and Purpose

Money Can’t Replace Meaning and Purpose

American poverty

Work has intrinsic value

Last month, I had the honor of participating in the Heritage Foundation’s annual Antipoverty Forum, where scholars and practitioners discussed the state of poverty in the country and the local efforts to confront the issue.

The discussion this year centered on the Biden Administration’s Build Back Better (BBB) bill that is now making its way through Congress and the ways in which the bill would undermine work by using much of its $2.4 trillion to expand safety net benefits and create new entitlements, all while eliminating work requirements.

Despite unemployment numbers dropping nearly to pre-pandemic lows in most states, what is not widely understood is that labor force participation (the number of people who are able to work and are actively looking for work) is much lower than when the pandemic began. Some 4-5 million people have effectively dropped out of the workforce – at least for now – despite record job openings (10.4 million in September).

While the drop in workforce numbers is partially explained by fear of COVID and mothers forced to stay home with children, much of it can only be explained as being caused by increased benefits (and the elimination of many requirements for qualifying), rescue-related payments and, now, monthly child tax credit payments. The BBB bill is very likely to make these trends and others, like inflation, worse.

Although we’re concerned that people are choosing not to work and agree that more money coming from Washington, DC, will make matters worse, my remarks reflected our concern at GCO about why worklessness harms the individual. Work is not merely about earning money; it has intrinsic value.

 

The Success Sequence provides an outline of how to reverse the cycle of poverty in our communities. GCO uses this as a framework for much of our work.

Championing a return to normalcy and healthy social interaction

Work provides each of us with an outlet for our God-given talents and creativity. It allows us to serve others and contribute to other individuals’ well-being in exchange for having our own needs met. More than that, it provides us with social capital and a network of colleagues and friends who can help us when we need it. Much research has also shown that worklessness leads to poor mental and physical health and can contribute to increased drug and alcohol abuse – the 100,000+ overdose deaths during the pandemic representing the latest example.

As our government wrestles with how to deal with the pandemic and sets its priorities, it should avoid anything that discourages employment and causes more isolation. For individual and societal health on every front, the government should be championing a return to normalcy and healthy social interaction – including at work – that allows the American people to be resilient during times of crisis.

Help From Where You Least Expect It

Help From Where You Least Expect It

Help From Where You Least Expect It

depressed man

“I don’t know what I’m going to do if I don’t find a better job; I might have to go back [to prison].”

Two months out of prison, Ray (name changed for anonymity) was explaining to me that he had reached the end of his rope. He had been struggling to find work that paid enough so that he could simply afford the basics. His part-time, minimum-wage job, just wasn’t cutting it. But, at least it was something.

Ray had the added complication of having to take custody of his son shortly after being released, meaning another mouth to feed when he could barely feed himself.

During his most desperate days after leaving prison, Ray said he was blessed to have the help of local church ministries who provided temporary housing for him and his son at a local extended stay hotel. He called GCO because that assistance was running out. He needed more help so he could remain at the extended stay but, more than that, Ray knew he had to solve the job problem to have any hope of getting off the hamster wheel he was on.

“I’m “clean” and have no intention of going back to that life.”

With a record that included drug and property crimes, Ray worried he might not have a shot at a better job. “But I’m willing to do any job that pays enough,” he assured me.

With those details in hand, our team started looking for the resources Ray needed and found some great opportunities for him and his son. There was a local church ministry offering help with additional days in the extended stay motel, there was the local restaurant eager to interview Ray for a better-paying job.

In the end, help came from a place Ray least expected it: the extended stay motel owner himself.

After hearing Ray’s story and observing him on the motel property, he offered Ray a job as a maintenance technician, a position that also included room and board on the motel property – an answer to Ray’s prayer for better pay and housing stability for him and his son.

 

 

The Success Sequence provides an outline of how to reverse the cycle of poverty in our communities. GCO uses this as a framework for much of our work.

Like Ray, you might be surprised the motel owner stepped in to help the way he did, but you shouldn’t be. Many times, our local business owners bridge the gap for those in need in big and small ways – from helping support the nonprofits that serve emergency needs to, like the motel owner did for Ray, helping directly.

Too often, it’s business owners who get the negative press and little credit for the good they do. In reality, as Ray’s story reminds us, they are a huge part of the solution to poverty – both in the jobs they provide through their risk-taking and in their philanthropy made possible through the profits they generate.

Is this the end of Ray’s story? I don’t think so. Ray seems to have a drive that’s going to keep him reaching for better opportunities and, of course, if we can help him, we’ll be here to do that.

The point is that Ray’s story isn’t unique. For those reaching out and seeking help – for housing, for work, for food – there are often caring community members willing to help.

And sometimes that help comes from the place you least expect it.

If you or someone you know is struggling to find employment in Gwinnett or is looking for help to meet their basic needs, please visit www.betterworkgwinnett.org to find resources or to be connected to one of our “guaranteed-interview” employment partners.