This is a point I tried to make in conversations I was having back in 1994 or so about the welfare reform that was then being debated. It's a rather technical point, though, so it was hard to get it heard in all the shouting about welfare moms.<p><i>Step-function subsidies are evil.</i> (A "step function", in math, is a function whose value changes sharply at a single point, like a stairstep.) They're evil for just the reason being discussed here, that they create a point where a small increase in earnings causes a large decrease in total income.<p>When it comes to income taxes, our legislators are smart enough to use piecewise linear functions, but somehow this very small amount of mathematical sophistication goes out the window when it comes to subsidies for the poor.<p>And people's lives are ruined.
TLDR, in many situations in Illinois you make more money (due to benefits) by making less, up to a staggering income level of ~$70000 a year in some cases.<p>I have seen this first hand. When I was broke in community college I became eligable for $200 month food subsidy which quickly dropped off a cliff if I worked more than 26 hours a week. So I worked just under that. Any more would be a net loss until ~35 hours due to my low wage per hour not making up for benefits lost. I did some more math, and it turned out I would make only ~10% less money if I could find a job with very high hourly pay and very low hours per week.<p>With the incredibly broken way the system was set up, I ended up finding a website admin job that paid 18 hourly but only 4 hours a week to maximize the benefit. Some would say I "messed with" the system, but I was going to be broke either way and it made zero sense to work more for less money when I was going to school.<p>I quickly moved out of Illinois from this and a hundred other political happenings that convinced me the government there was just unfixably corrupt and broken.<p>I'm not surprised this is coming from Illinois, at all. Incredibly high taxes from benefits allocated absurdly. Laughable benefits for students and other blocs that don't "bring in the vote". The state has a shadow governer Madigan who has run the state for two decades no matter who was in charge on paper.<p>Illinois is teetering on bankrupcy and the only state with a shinking population due to so much out migration. And the average person leaving makes almost $30,000 more a year than the average person moving in. Because anyone that can afford to leave is on the way out due to extremely high taxes. Businesses have been fleeing in droves for over a decade, and it's rated in many small business polls as one of the top 5 worst states to run a business.<p>The state has turned to raiding the public universities and local governments in recent years. Cutting funding so severely that several large public universities are almost bankrupt. My education grants dropped from 10k a year from my low income to zero in a single semester because of budget cuts, and I have about 20k in student loan debt as a result.<p>Basically, don't move to Illinois, it has easily the crappiest most corrupt government of any state. The financials are so bad they've narrowly avoided bankrupcy and have a junk credit rating. If you move there be prepared to pay down the previous decade of uncontrollable debt to the state in taxes due to the inability of Madigan and friends to balance a budget while maintaining their staggering level of corruption
One commenter on Reddit notes the "programs provide a necessary relief, but they definitely aren't built to help people truly improve their circumstances in sustainable and lasting ways." They're probably not designed at all.<p>There is no grand plan anywhere. Regulations are a hodgepodge of legislation and executive decisions made by people with conflicting incentives, little to no feedback and expertise, limited resources, and very real abuse/exploitation.
When I first heard of Welfare Cliff I was shocked, coming from Brazilian public schools I realized how much propaganda is spread there.<p>They teach how the US is imperialist and how they only care about money and some other soviet stories.<p>To give out some money is one thing, we have that in Brazil, but to give out so much money it is better not to work is shocking.
Chicagoan here.<p>I grew up in Northern California (moved here for college and have stayed for 15 years). I have nothing but the utmost respect for the environment, for minority rights, and for helping the less fortunate.<p>But here in Shitcago, I get shouted down as a traitorous, MAGA-loving nazi because I criticize the very obvious flaws that we have in our welfare programs, pensions and unions. Welfare cliffs like these ones are borderline inhumane, robbing people of their ability to improve themselves as human beings and to have the self-respect of being a great as they would like to be. We arguably hurt people with these programs, and we PAY TO HURT them.<p>Now this isn't to say that there aren't great programs that we can undertake to help those in need by redistributing wealth in productive ways, but it is not at all clear to me that supporting our current welfare and educational system is at all synonymous with supporting the idea of helping and educating people.
It's hard to stomach the commentary on Reddit. I glanced at that thread and could post examples of this; in short you have a lot of speculative, off-the-cuff, freeform-braindump-type advice giving and opinions. I have a lot of trouble with Reddit although HN folks have mentioned certain subreddits have articulate people in them with interesting back and forths.<p>Yes, though, the spirit of the thread is correct: the health care costs and insurance mechanisms are absurd and hit the lower-middle class the hardest.
We've updated the link from <a href="https://www.reddit.com/r/povertyfinance/comments/87or18/the_welfare_cliff/" rel="nofollow">https://www.reddit.com/r/povertyfinance/comments/87or18/the_...</a>.
I haven’t had income in a few years because I’ve been working on a personal project that has yet to materialize. I am on Obamacare and it’s really good. It’s free, better than anything on the market you can buy with money. $1 rx copay, no copay for visits, no referrals to specialists, and the network seems to have all the highly rated specialists in the area. When you see a doctor there are no unexpected, unintelligible bills months later that you have to argue endlessly.<p>It keeps me from taking side jobs because I’d immediately have too much money and would have to buy inferior insurance. I know this is very different from the much more difficult and real circumstance in the OP but having heard of welfare entrapment for a long time it was odd for me to realize that it had sort of happened to me too. Welfare, man.