Solving the Benefits "Cliff Effect" to Put New Hampshire's Families on the Path to Economic Self-Sufficiency
Concord, NH – Governor Christopher Sununu and the New Hampshire Department of Health and Human Services (DHHS) has released "Helping Business Thrive and Families Prosper," a new paper on the "Cliff Effect." The Cliff Effect occurs when a new employment opportunity forces families off of state benefits, yet wages do not make up for the loss of benefits. The new paper also examines the resulting workforce challenges for employers, and outlines action steps on how policymakers, employers, and other stakeholders can work collectively to end the Cliff Effect and ensure New Hampshire's economic engine will achieve its full potential and create a workforce for the 21st Century.
In his recent inaugural address, Governor Chris Sununu hailed New Hampshire's thriving economy but warned about the long-term impact of inaction on the Cliff Effect. The Governor is calling on policymakers and employers to address the Cliff Effect and ensure parents have the resources they need to create strong families and resilient children, and employers have access to a growing and vibrant workforce. In support of the Governor's call to action, DHHS hopes "Helping Business Thrive and Families Prosper" will serve as a roadmap for how all stakeholders can effectively and proactively address the challenges created by the Cliff Effect.
"My administration has made it a priority to develop a strong, thriving economy. It's easier than ever to find a high-quality job in New Hampshire, but workforce shortages loom large," said Governor Sununu. "New Hampshire's employers, the force that drives our economic boom, are worried about having enough employees. This is a growing issue across the country, and New Hampshire will lead the way and be the first state to end the 'Cliff Effect' and doing so in a way that does not impact taxpayers in the long-term."
Government policy often creates barriers that may keep families from climbing up and out of unemployment and self-sufficiency. According to the DHHS paper, the system can be changed to turn a double loss – to employers and families – to a triple win – for the state in savings on benefits, for families in increased wages, and for employers in an available productive workforce.
"Potential employees may pass on a great new opportunity because they fear losing their benefits will hurt their families. We can no longer ignore the impact benefits cliffs have on the hopes of fully working individuals and their children," said DHHS Commissioner Jeffrey A. Meyers. "Working with partners at the local, state and national level, New Hampshire is primed to solve the benefits cliff problem because of policy initiatives and investments that are underway."
An initial "Whole Family Approach to Jobs" team has been convened, consisting of partners from State, including the Governor's Office, the NH Department of Education (DOE), NH Employment Security's (NHES) Economic and Labor Market Information (ELMI) Bureau, and DHHS; educational stakeholders, including the Community College System of NH; New Hampshire businesses; philanthropic organizations; community providers; and parents.
The "Whole Family Approach to Jobs" team will complement the work DHHS is doing around the recent "Community Collaborations to Strengthen and Preserve Families" federal grant, which focuses on strengthening families, building parents' capacity for self-sufficiency, and ensuring children are in safe and nurturing environments. These programs in tandem allow the State to begin closing the Cliff Effect because the Community Collaborations grant seeks to strengthen families as parents pursue employment opportunities on the path to self-sufficiency.
The "Whole Family Approach to Jobs" team will also build upon initiatives including: recent federal awards in affordable housing vouchers and planning for quality preschool; the State Opioid Response grant; increasing quality initiatives at Family Resource Centers; and the new 10-Year Mental Health Plan, among others. Each of these initiatives intersect with benefits cliffs, making the State's focus on these cliffs critically important.
The Cliff Effect Team will initially pursue the following activities:
- Convene Federal and State government, Legislative, business, and human service leaders and families to proactively identify potential solutions, and formulate and propose policies to implement those solutions towards closing the benefits cliff in New Hampshire.
- Embark on an analysis to understand the economic, demographic and policy factors affecting the Cliff Effect.
- Develop, plan and implement a web-based Benefits Cliff Calculator to equip workers with understanding how a range of benefits can best support them in their road to economic independence.
- Continue to create system capacity, management and accountability to support employment pathways to prosperity
Work on addressing the Cliff Effect will continue into the next biennium budget. The State expects this work will identify policies that are unintentionally derailing our workforce and build the tools and resources necessary to simultaneously widen the roads to self-sufficiency and promote business success.
For more information and to read "Helping Business Thrive and Families Prosper," please visit www.dhhs.nh.gov/.