Is it possible to be worse off because of an increase in the minimum wage? In some cases, the answer is yes. Shira* is a home health care aide. She’s a divorced mother with three children. Her wages went up from $13.65 an hour to $15 an hour this past January due to the increase in the minimum wage in New York City. That should have been good news. As a result of the minimum wage increase, she’s making $235 more per month. The problem is that while New York adjusted the minimum wage it did not adjust the maximum earnings. So Shira lost $505 in SNAP (food stamps) benefits – meaning that her overall income went down $270 per month. “The minimum wage was meant to help low-income New Yorkers. However, in some cases, it’s actually costing them money. That is the Benefits Cliff and Met Council, as the largest Jewish charity serving the poor, is committed to fighting on behalf of these low-income New Yorkers,” explained David G. Greenfield, CEO of Met Council on Jewish Poverty.
That’s exactly what David Greenfield and Met Council did. They organized, lobbied and spend the last six months fighting on behalf of low-income New Yorkers. This past Friday morning all of their efforts bore fruit when at 6:45 AM, in a historic move by the New York State Legislature, they passed a law to form a task force to find solutions to the Benefits Cliff. Many low-income New Yorkers who are at risk of losing their benefits will be greatly served by this legislation. When Met Council first learned of the Benefits Cliff problem from a number of their clients, they worked hand in hand with Senator Andrew Gounardes and Assembly Member Joseph Lentol who introduced this Benefits Cliff bill in their respective houses. The bill will have a long-lasting impact on the lives of the hundreds of thousands of working poor in New York.
“This is something that only Met Council can do,” said David G. Greenfield, CEO, Met Council. “While serving over 225,000 New Yorkers in need each year we come across every conceivable issue. We literally help tens of thousands of people access benefits each year, that’s how we saw the Benefits Cliff first hand. It’s so demoralizing to learn that some New Yorkers are actually losing money because of the minimum wage. That’s why we set out to fix it.”
“I have heard anecdotal stories that the minimum wage has negatively impacted individuals ability to receive benefits. This is largely because their increased income may disqualify them from receiving their usual supplemental government benefits,” said Assemblyman Joseph R. Lentol. “This is an unintended consequence of the minimum wage increase. Make no mistake, these individuals still need help. It is our responsibility to ensure that the unintended consequences of legislation we pass are mitigated. I was happy to sponsor this bill to study how these impacts could happen and work to find a way to resolve this problem.”
“For many families, the abrupt drop-off in benefits as they reach a higher income bracket is both a trap and an obstacle to social mobility. As we work towards a fair system where everyone has the opportunity to succeed, we need to know how the benefits cliff affects New Yorkers’ ability to get out of poverty. Then we need to address the issue head-on. The passage of this legislation is an important step,” said Senator Andrew Gounardes.
Assembly Member Simcha Eichenstein passed the first bill in New York that seeks to fix the Benefits Cliff on the issue of Summer Youth Employment Program (SYEP) and championed the cause of low-income New Yorkers. In this case, tens of thousands of teenagers who were working in the summer through the SYEP program saw their families income go up and were inadvertently causing their families to lose benefits.
“The impact of the benefits cliff is real and affects thousands of low-income families,” said Assembly Member Simcha Eichenstein. “My legislation that passed both houses of the New York State Legislature last week excludes the Summer Youth Employment Program earned income from the household annual income as it relates to public assistance. This legislation will ensure that more young people can participate in these enriching summer experiences helping them get a head start on acquiring work skills without fear of affecting their household’s public assistance.”
“We must ensure that we evaluate the effects of the increase in the minimum wage has on our working poor. Too many New Yorkers today are struggling with poverty or trying to make ends meet, with many earning the minimum wage. It is not only necessary but just that we ensure all services, programs, and subsidies that go through New York State do not contradict the living wage,” said Senator Roxanne J. Persaud, Chair of the Social Services Committee, who co-sponsored the SYEP legislation.
Greenfield also took the time to thank Assembly Member Helene Weinstein, Chair of Ways & Means, for her leadership in passing this legislation and Assembly Members Marcos Crespo and Andrew Hevesi for their support, as well. “We literally had the backing of dozens of elected officials. I’m especially grateful to them and to our JCC heads, Met Council staff and young leadership cabinet – all of whom came up to Albany to lobby on behalf of this bill. We could not have done this without their support.”
Met Council is the largest Jewish charity serving the poor in New York. They have ten different departments that work together to fight poverty including America’s largest free kosher food network, crisis intervention services, family violence prevention programs and the largest network of affordable housing in the Jewish community located in 20 building owned and operate by Met Council across the five boroughs of New York City.