The Benefits Cliff in ArlingtonPoverty in Arlington
The 2023 Annual Median Income (AMI) for a household of 4 in Arlington is $152,100. This high AMI masks significant income and quality-of-life disparities from one neighborhood to the next. There are about 24,000 individuals in households making 30% or less of the AMI ($45,630 for a household of 4). Childcare workers, hospital aides, office cleaners, construction and food service employees are a vital part of our diverse community fabric and economic sustainability. Of the 24,000 individuals, about a quarter are children.
People in poverty rely on a combination of earned income, public benefits, and community supports to survive. When these resources are unpredictable, they must choose which necessities to do without. Inconsistent access to nutritious food, medical care, safe housing, and childcare has detrimental effects on their health and well-being, as well as their children’s.
When these resources are unpredictable, they must choose which necessities to do without.
The Benefits Cliff refers to the drop off in eligibility for subsidies for health care, food, child care, transportation or housing that low-income families experience with even a minor rise in earnings. The loss of the subsidies mean the worker has to refuse the raise or better-paying job to avoid making their family worse off.
The specific way this scenario works out is unique to each household’s size, income, children’s ages, and other factors. “Sandra”, the woman in this story, is a single Arlington mom with 2 children, ages 10 months and 4 years old. Hers represents a very typical situation amongst Arlington’s working poor. Her story begins with the following circumstances:
For modelling purposes, her earnings increase at $3-$5/hour increments every two years. Accordingly, her children age 2 years at each increment, changing her child care co-pays and other subsidies. After each turns age 5, her children are in sliding scale income-based before and after care in school and in a center-based summer camp until each is age 12.
Note: All calculations are in today’s dollars. Neither her expenses, income, nor her subsidies show inflation.
Sources: The eligibility amounts for each benefit were determined by Arlington County DHS eligibility specialists for each subsidy area. Her income is based on actual local wage data and reflects workers in her income bracket. Her living expenses are based on Arlington cost of living data compiled by MIT. Michelle Winters did the graphing in consultation with Urban Institute; and the Urban-Brookings Tax Policy Center calculated her tax credits.
New in 2023: After watching Sandra’s story, use this background and discussion guide to further explore the systems challenges faced by low-income people and the policies and strategies that promote forward mobility and remove barriers like the benefits cliff.
For additional information about Arlington Community Foundation’s economic mobility initiatives, contact Anne Vor der Bruegge, Director of Grants and Initiatives.
