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Bank Grows Benefits Cliffs Program

The Richmond Fed Community Development team continues to expand awareness about a digital resource that could help workers throughout the Fifth District improve their long-term socioeconomic status by addressing some of the workforce barriers they face.

These barriers are known as Benefits Cliffs, which can occur when individuals who receive public assistance earn increases in income that push them over government assistance thresholds, though they still do not earn enough to independently sustain themselves.

In the past eight months, the team has met with numerous  government and civic leaders and community organizations to introduce them to the Career Ladder Identifier and Financial Forecaster (CLIFF) dashboard. This suite of tools was created by the Atlanta Fed to project potential earnings barriers and opportunities for workers. This information also can be used by agencies to encourage worker retention and by organizations and government bodies to more fully evaluate their public benefits practices and policies.

The Richmond Fed team has executed memorandums of understanding with a growing number of organizations across the Fifth District that want to leverage the dashboard, including the Virginia Goodwill Network (VGN), the City of Richmond Office of Community Wealth Building, Virginia Local Support Initiatives Coalition (LISC), United Way of Central Maryland, Goodwill of the Southern Piedmont and ReWork Richmond.

The dashboard can be customized for each state, based on that state’s cost of living. “Right now, states are exploring the tool’s ability to simulate policy,” said Tiffany Hollin-Wright, the Richmond Fed’s Community Development regional manager for Virginia and West Virginia. “This is timely as they consider allocation of American Rescue Plan Act dollars for workforce development.”

Hollin-Wright applauds the Atlanta Fed for ensuring that the CLIFF dashboard can be leveraged by other Reserve Banks to use throughout areas of their Districts, including in Hawaii, Connecticut, Oklahoma, Alabama and Florida.

Along with providing insight into possible pitfalls for workers seeking to better their socioeconomic status, the CLIFF tool can provide insight into whether workers’ current career paths will be beneficial in the long term. For example, a single mother with two children may find that over time a career as a certified nursing assistant (CNA) may help her fare somewhat better than remaining in a job in concessions. If she continued to progress in the field, a career as a licensed professional nurse (LPN) or registered nurse (RN) could offer her a longer-term payoff.

The Richmond Fed’s partnership with the Atlanta Fed is part of Atlanta’s Advancing Careers initiative.  Together, the two Reserve Banks are working with local and state partners to find solutions to benefits cliffs, conduct research to better understand the impact of benefits cliffs and to raise awareness about the dashboard that supports worker economic mobility. Partner agencies currently have access to the CLIFF Planner, another iteration of the CLIFF dashboard, which provides users with financial and career coaching. Informing workers in advance when they may lose eligibility for safety net programs could help them prepare for their benefits loss, maximize their earnings and carefully consider their career transitions.

An exciting evolution of the CLIFF dashboard collaboration between the Richmond and Atlanta Feds is a newly minted partnership with the U.S. Department of Health and Human Services Administration for Children and Families’ Office of Family Assistance in Region 3. The Cliffs and Ladders partnership introduces the dashboard to state agencies in Virginia, West Virginia, Maryland and Washington, D.C.  The joint venture is also designed to explore high-demand career pathways for workers and to inform state policy and practices.

Hollin-Wright and her Community Development colleagues are excited about what is to come and how this initiative is helping the Richmond Fed meet the Federal Reserve mandate to foster maximum employment.

“The main impact we hope to make is with individuals and with localities,” said Hollin-Wright, who recently was appointed to the United Way’s United for ALICE (Asset Limited Income Constrained Employed) Research Advisory Committee. There she will contribute to further exploring the impact of benefits cliffs.

“It takes a while for people to get through training, secure an entry level position, earn a promotion and achieve a livable, sustainable wage — a juncture when they won’t necessarily have to rely on the safety nets to help them meet their basic needs,” she said. “It’s going to take some time for people to get to that point and for localities to see the benefits of workers progressing toward high-demand career pathways.

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