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Ohio economists strongly agree that sliding scale public benefits are the best • Ohio Capital Journal
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Ohio economists strongly agree that sliding scale public benefits are the best • Ohio Capital Journal

It seems like it should be common sense: when you only offer a benefit up to a certain income level, it creates a cliff that strongly discourages a person from trying to earn more.

The Ohio Department of Job and Family Services recently took steps away from that approach, and a group of economists strongly agreed with the move.

Previously, Ohioans were eligible for the Supplemental Nutrition Assistance Program, or SNAP, only if they earned 130 percent or less of the federal poverty guidelines. For a family of four, that’s $40,560.

Earlier this month, the Department of Job and Family Services adjusted that, dropping food stamp benefits on a sliding scale until a family makes 200 percent of the federal poverty guidelines, or $62,400 for a family of four.

“Fear of losing food benefits can be a disincentive to taking a new job, working more hours, or even accepting a promotion,” ODJFS Director Matt Damschroder said in a statement announcing the change . “Rather than an all-or-nothing approach, we’re creating a sliding scale that encourages people to earn more by gradually reducing their benefits as their incomes rise. This provides an incentive to accept promotions and raises knowing they will not immediately lose benefits.”

A group of Ohio economists seems to wholeheartedly agree, according to a poll released Oct. 28. They were asked about “benefit cliffs,” or providing them at a certain level, then abruptly cutting them off once an income threshold is reached.

Asked whether benefit cliffs “caused by strict income requirements for public benefits create significant barriers to career advancement for low-income workers,” all 19 economists agreed, according to the survey by Scioto Analysis.

“People make an economically rational decision, at least in the short term, to turn down raises or promotions that result in the loss of a much more significant public benefit,” Regionomics’ Bill Lafayette said in the survey’s comments section .

Economists were somewhat more mixed when asked if the changes passed by the ODJF would “lower barriers to work for low-income people.”

Thirteen agreed, while six were unsure or did not have an opinion.

“Eliminating the ‘benefit gap’ is an effective policy that reduces disincentives to work,” wrote Kevin Egan of the University of Toledo. “Furthermore, it is a fair policy change to gradually reduce SNAP benefits so that no household finds itself in such an unfair position.”

But Kay Strong, an independent economist, said the barriers to work extend far beyond coping with benefit cliffs.

“Barriers to work for low-income workers are not just on the supply side of the market,” she said. “Employers create barriers through worker selection, worker scheduling, and availability to help employees over and around the occasional personal obstacles that hold workers back.”

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