How Earning More Keeps You Poor

191,000 kids live in poverty in Colorado


Why can’t poor people just “get a job”?  Hell, they get food stamps, free child care, tax credits, welfare checks…what else could they need?

I’ve heard variations of this question; truthfully,  I used to ask it myself.  What I failed to recognize (and now try to increase awareness of) is the unintentional negative affect of the 1996 welfare reform laws: the Cliff Effect.  Consider the real-life scenario of Shari (not her real name):

Shari began working at McDonald’s 15 months ago.  She is eligible for a raise, yet she refuses to ask for one or accept any promotions that McDonald’s may offer. If Shari got even a 75-cents-per-hour raise, it would trigger a cut in food stamps, childcare assistance, and medical assistance. She cannot afford to earn a little more. In order to escape poverty, Shari must earn considerably more. Like others in poverty, Shari is often stuck in survival mode, unable to imagine a better future and trapped without the support systems that families who are middle or upper class take for granted. It feels impossible for Shari to plan for the future or make long-term decisions because she is dealing with today’s crises.

Shari’s work supports are supposed to provide her family a means for climbing out of poverty.  These include the minimum wage, the Earned Income Tax Credit, the child tax credit,  food stamps, health insurance, and child care.  But as Shari’s earnings increase, she begins to lose these benefits, negating any increases in income. The result? Hard-working individuals climbing to reach the American Dream of prosperity end up falling off the cliff…back into poverty.

Just another Shari

We’ve all seen Shari:  at the Wal-Mart checkout counter, at the bus stop, waiting on us at McDonalds.  And we think, “There but for the grace of God, go I.”  Is that it?  Do we stop there?  Or, do we wonder, “Is there anything I can do?”

“Do not wait for leaders; do it alone, person to person.” ~ Mother Teresa.

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2 responses to “How Earning More Keeps You Poor

  1. You are wrong…..I have never felt that “there but for the grace of God, go I’ when watching people willing to stay in low paying jobs.

    I agree that government handouts trap some people in poverty…after all, that IS THE INTENT….but anybody can break out if they want.

    It is all dependant on how bad they want it. Period!

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