MIT students worked with the Hutchinson Community Foundation, area nonprofits, the Kansas Department for Children and Families and the Hutchinson/Reno County Chamber of Commerce to learn more about the challenges associated with the “cliff effect,” and identify solutions. (Submitted by Hutchinson/Reno County Chamber of Commerce)
TOPEKA — Shawna Logue recalls a time in her life when she earned $100 too much in annual income to qualify for government assistance to help feed her daughter.
To make ends meet, the recently divorced mother sold the fancy dishes she had when she was married, and would try to find somebody who would let her clean their house for $20 on the weekend. She avoided her heating bills during the winter, when companies aren’t allowed to shut off service, and used her tax return to catch up on payments in the spring.
“It’s not the best method, but it’s what I had at the time,” Logue said.
The Hutchinson Community Foundation frequently hears stories like this from residents who struggle to escape poverty because of the “cliff effect.” That’s when a single parent or couple who receives a modest boost in income loses a disproportionate amount of resources because they no longer qualify for government programs that provide assistance for food, housing, child care, health insurance or tax credits.
For some families, it is cheaper for a parent to stay home with the kids than for both parents to have a job and pay for daycare.
“There are situations where you could get a 15-cent raise, and it might put you overall a dollar over the income requirements, and you could get kicked off,” said Kari Mailloux, director of strategic initiatives for the Hutchinson Community Foundation. “You end up making far less, even though you got a raise.”
Earlier this year, the foundation partnered with students from the MIT Sloan School of Management to study the cliff effect and identify solutions. They worked with area nonprofits, the Hutchinson/Reno County Chamber of Commerce, and the Kansas Department for Children and Families.
The student recommendations center on increasing awareness about the cliff effect, linking families to nonprofit services, and helping businesses develop strategies to provide a livable wage and remain profitable.
In Hutchinson, there is a 13-year difference in the life expectancy of residents between two distinct parts of town.
Logue, a Hutchinson resident, is now the case manager for the local Salvation Army post’s Pathway of Hope program, where she interacts with families who struggle with poverty.
“I think a lot of times, somebody who needs something is looked at like they are lazy or they’ve done something wrong,” Logue said. “A lot of them are super hardworking people. Some of them have two jobs. They just don’t have an education or skills to get into a better paying job. So that ‘lazy’ or ‘you’re a bad person’ mentality needs to go away. I think that’s a huge factor.”
‘Different life experiences’
As a student in MIT’s USA Lab, which works to help communities solve problems, Alex Adamczyk interviewed Hutchinson residents about their personal struggles with finances.
USA Lab selected Hutchinson as one of eight cities nationwide to receive attention from the program’s 25 students. Ilona Balagula and Jack Bowers joined Adamczyk in their remote work.
“It was incredibly powerful,” Adamczyk said. “A big reason why I joined this project to work with Hutchinson was to get the opportunity to talk to people with very different life experiences than we had. The courage of people who talked about the kind of difficulties they had gone through in their lives … it was cathartic for us.
“And I think it was cathartic for them, to realize this is a much broader thing and the struggles they were dealing with are something a lot of people are going through. And it really motivated us, as MIT students and graduates, to continue to stay connected with these issues.”
There were people, he said, “who had done a fantastic job of doing the really hard work it takes to get a better job and work their way out of poverty who, because of this cliff, couldn’t make ends meet, had a momentary crisis, and fell back into poverty because of it.”
After the students gathered information about the issues residents faced, they worked with the chamber to set up confidential meetings with prominent businesses. Adamczyk said he was encouraged by the chamber’s willingness to help facilitate these conversations.
Businesses have their own challenges, including recovery from the pandemic, supply chain problems, and a chronic workforce shortage. Adamczyk said there are 4,000 fewer workers in Reno County than there were five years ago, even though the population has stayed the same.
MIT’s Good Jobs Institute provides resources to help companies figure out what it takes to pay a living wage while still being successful and productive as a company. The idea is to invest in employees, retention and higher productivity instead of trying to minimize cost.
This hasn’t been “super successfully explored in the past,” Adamczyk said, but businesses realize it could be necessary to overcome the labor shortages.
“The business community was telling us that they can’t find workers, and here we were hearing from workers saying, ‘I would love to work — here are the reasons why I wasn’t able to take this job,’ ” Adamczyk said.
Debra Teufel, president of the Hutchinson/Reno County Chamber of Commerce, said businesses realize they have to get more creative to become an employer of choice. Every day, she said, she hears from a business that is hiring and wishes there were more candidates.
The challenges associated with the cliff effect can’t be easily or quickly solved, she said, “but I do think it merits some work.”
Business already invest in career training and the development of workers’ skills. But as employees climb the economic ladder, Teufel said, there is a void in the middle. Businesses want people to increase their skills until they can get past this “crack in the system,” she said.
“We don’t want to keep people in generational poverty simply because by making more they lose benefits,” Teufel said. “We want them to see the long game of making more and climbing the economic ladder will get them past that poverty situation. We know it’s temporary pain, but the end gain is worth it.”
The Department for Children and Families, which administers the social welfare programs associated with the cliff effect, has developed a new program that can help ease that temporary pain.
The agency has assigned resource agents to develop relationships with community organizations, search for training opportunities, and match employment opportunities to skills and interests. When someone is cut off from government assistance, the resource agent is dispatched to work with families to determine their needs and help find local organizations that can help.
‘In my shoes’
Rachel Pittman moved from Oklahoma to Hutchinson a few years ago, having just gone through a “nasty divorce.” She had $400 to her name and four kids to take care of.
Living with her dad was supposed to be a short-term plan, but when she landed a job, she immediately lost 80% of the food stamp money she was receiving. And her first paycheck didn’t arrive for four weeks.
Her full-time job payed $1,200 per month — not nearly enough to cover bills, rent, gas and food.
“You can’t make it on that,” she said.
She is now a VISTA — volunteer in service training to America — for AmeriCorps, working with impoverished communities. If she had a magic wand, she knows what she would do to change the policies that contribute to the cliff effect.
“I would tell my story to all of Congress and the president of the United States,” Pittman said. “Then I would make them go live a week in my shoes and let them see how I live compared to what they live.
“I’ve been homeless for several weeks. I want to see a congressman be homeless for a week and have to worry about where his next meal is going to come from, or how he’s going to talk the homeless shelter into letting him stay there because his family’s too big.”
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