CHARLOTTE, N.C. — A small pay bump is putting North Carolina working parents in between a rock and a hard place. Earning just a few extra dollars on the job causes them to fall off what experts call a "benefits cliff" — losing public assistance for necessities like food, medical care and childcare. 

What You Need To Know

  • Earning just a few extra dollars on the job is pushing working parents off what experts call a benefits cliff — where they lose food, health care and childcare benefits

  • Stephanie Murray says a $1-an-hour raise cost her her food stamps and childcare voucher

  • Goodwill Industries of the Southern Piedmont, the Federal Reserve Bank of Atlanta and Atrium Health are pushing for policy changes surrounding benefits cliffs in North Carolina, Georgia and beyond

Stephanie Murray learned this the hard way.

With family support and her toddler Destini on her hip, Murray graduated from a Virginia college with her bachelor’s degree in information technology in 2000 — hoping to land a job making decent money. But, that dream was quickly deferred.

“I might not be able to get the job of my dreams, but I’ve got to work, because I had a child that I had to take care of,” Murray said.

Finally securing a job outside of her field making $10 an hour, she qualified for food stamps and a voucher to send her then two kids to daycare for as little as $30 a month. She called the support a godsend since she moved away from family, no longer able to lean on them to watch her children while she went to work.

But, then ironically she was hit with yet another gut punch when her pay got bumped to $11 an hour, pushing her off a benefits cliff.

“I was like finally, because I needed that $1-an-hour raise, but it ended up being a detriment,” she said.

Murray lost her food stamps and childcare voucher, because she says she made $7 more than the maximum income to qualify for the assistance. 

While 16 states and Washington, D.C., have already passed legislation related to benefits cliffs, according to the National Conference of State Legislatures, North Carolina is not on that list. To meet the need in the Tar Heel State, Goodwill Industries of the Southern Piedmont, The Federal Reserve Bank of Atlanta and Atrium Health created a coalition to push for policy changes in North Carolina, Georgia and beyond. 

When Murray moved to Charlotte, she learned most single parents were in the same boat, struggling to pay for childcare. According to the N.C. Budget and Tax Center, childcare costs North Carolinians on average more than $12,000 a year, while in-state tuition for UNC-Chapel Hill costs $7,000 a year. 

“That dollar-an-hour raise was not covering all that extra,” Murray said.

Goodwill, the Federal Reserve Bank of Atlanta and Atrium Health are starting their push for change with a 12-month analysis of a benefits cliff tool that looks at the impacts of pay increases, public assistance fall-off and economic mobility. That pilot program ends in May 2024.