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ISSUE 8

MAY 16, 2017

Consider how benefits affect earnings.
A higher wage is only part of the solution.

Policymakers have an array of options to support low-income workers in earning the incomes they need to make ends meet. Two common approaches involve raising wages, largely through minimum wage laws, and expanding public benefits and tax credits such as Medicaid, the Earned Income Tax Credit, and other critical supports. Yet the interplay between higher wages and public benefit eligibility means that low-income workers might not always see higher incomes from working more hours—a phenomenon described here as “benefit cliffs” and “benefit plateaus.” To explore this topic, PHI analyzed how the recent increase in hourly wages in New York City—spurred by a 2016 state law that will increase the minimum wage to $15 an hour by the end of 2018—impacts a home care aide’s benefit eligibility and income.

 

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Design and Development: RD Design

Illustration: Mark Conlan

© PHI 2017

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