If you are a single parent with two children you get the same net income at $30,000 as at $80,0000 due to benefits getting cut off above $30,000/year income.
That doesn't match other numbers I've seen, and doesn't show any sources. Do you know more about it? (Edit: I'm familiar with the welfare cliff in general, just curious about this analysis of Chicago programs).
That’s ridicilous. The system has clearly been setup to fraud the majority who needs welfare and is a political virtue signaling. I bet the mean salary was right in the Middle of the ”cliff” (around 55k$) when this was decided to ensure very few would get the benifit and cost on government would be minimal.
The logical policy would perhaps be to equalize income to a certain treshold depending on available funds and budget on a particular year. This would also make investments in transits and housing more stable for everyone involved, simplyfing business decisions and quite possibly increase long term profitability.
> The system has clearly been setup to fraud the majority who needs welfare and is a political virtue signaling.
It has this effect, but I'd blame the need to simplify over malevolence.
SF's below market rate housing is a great example of a huge welfare cliff. Make under $60k? You can get a 1 bedroom for $1600/month. Don't? Join everyone else fighting at $3k/month or what not.
So yah, it's a bit ridiculous that we have a system where someone making $59k does better than $70k.
But it's really hard to administer everything as a phase-out system, especially with non-cash benefits. (currently the apartments are required to charge X rent.. so what should happen to the person making $70k/year?)
>Make under $60k? You can get a 1 bedroom for $1600/month. Don't? Join everyone else fighting at $3k/month or what not.
Sounds like SF should experiment with marginal rent, based on how marginal tax rates work. Something like: landlords charge a base $x rent, if you make above $50K a bit more is added one, make above $60K a bit more is added, etc. That was the person making $1 over some arbitrary cutoff isn't much worse off.
So I foolishly read the original sources[1][2]. The image comes from a blog with an obvious libertarian/conservative agenda. For example, another article[3] on the site decries non-discrimination laws for businesses as if red-lining never happened or would have been resolved by market forces (against all historical evidence). This site does not make any explicit recommendations but seems to imply that welfare, as a whole, should be eliminated. Replacing a cliff with a gaping chasm where we can leave our poor to try to scramble their way out.
The original paper[2] is interesting for a few reasons. First, it identifies the problem on page 15 as steep drop offs in some welfare programs, instead of a more tapered reduction in benefits. Second, it's apparent that the linked image is the most extreme scenario - which applies to only a small segment of the population. Indeed, once you look at the 2-parent household example on page 30, the cliff is much less severe. In the end the paper recommends giving individual states more power to set benefits in a way that tapers off the benefit received and removes the welfare cliff.
What neither of these sources mention is the other, tried and true way to address the problem: making many of these benefits universal. The obvious example is healthcare, where those making 30k/year and 120k+/year get access to the same public system. But other public benefits like public childcare are not unheard of[4].
https://www.learnliberty.org/wp-content/uploads/2016/08/welf...
If you are a single parent with two children you get the same net income at $30,000 as at $80,0000 due to benefits getting cut off above $30,000/year income.