A project advisor for the Federal Reserve says about 750,000 people in Wisconsin are impacted by “benefits cliff-related issues,” arguing this is holding back the state’s workforce. 

Graham Anderson, lead project advisor for the Federal Reserve Branch of Atlanta Benefits Cliff Policy Research, gave an overview of this topic yesterday during a summit hosted by Competitive Wisconsin in Eau Claire. 

“Essentially when an individual begins making more money, sometimes it can be a very small amount of money, they lose all of their benefits at once,” he said. “What that represents is … once they take a promotion, once they take a higher paying job, they take a pay increase, they then have to pull back from that opportunity.” 

He noted this issue affects rural parts of the state more than urban areas, based on related research conducted by UW-Madison’s Robert M. La Follette School of Public Affairs. Programs with the largest benefits cliff impact were the Badger Care health coverage program for low-income residents and the child care program Wisconsin Shares, he said. 

Along with this role with the research effort, Anderson is also senior manager of marketing for Milwaukee Tool.

“We are now at a point today that as an employment manufacturing company we are screaming for talent,” he said. “This is a huge issue for us.” 

But it’s not only affecting the manufacturing industry, he added, highlighting federal data that illustrates the lost earnings potential for health care workers. 

“Compared to a [certified nursing assistant] to a registered nurse, it’s almost $300,000 in realized lifetime earnings that individual is foregoing by not taking credentialed attainment or personal training and continuing up the career pathway,” he said. 

His presentation touched on some policy suggestions aimed at reducing the benefits cliff in the state, such as implementing a transition year for Wisconsin Shares during which households could remain eligible for benefits and exempt from co-pay increases for a 12-month period. 

See more from yesterday’s event: https://wiseye.org/2022/08/11/be-bold-wisconsin-tomorrow-action-accelerator-workforce-recruitment-attraction-and-retention-summit/ 

–By Alex Moe

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