What is the Cliff Effect?
Derek Thomas is a senior policy analyst for the Indiana Institute for Working Families. He is the lead author on a new report called "The Cliff Effect: One Step Forward, Two Steps Back." Thomas joins Rick Kogan on The Afternoon Shift to discuss the report and its findings.
"What the report illustrates is the benefit cliff that occurs when even a fifty-cent increase in hourly wages leads to the complete termination of a benefit and a dramatic net loss of resources. And the unintended consequences of this design either lead to a disincentive toward economic mobility, just like Sarah's story or leads to a situation in which a parent or guardian is working harder but is financially worse off," Thomas says.
Hear more from today's conversation around the latest topic from Front & Center: American Dream Deferred by listening to the audio clip above.