Thanks to Brian Page of Reading High School in Reading, Ohio for this guest submission. Brian pointed out this "Cliff Effect" problem this summer and was determined to create a case that would demonstrate its impacts on financial decision-making and how it can trap people in poverty. 

Here's Brian's description, with a link to this case study:

In the United States, the poor are staying poor and the rich are staying rich at an alarming rate. A silver bullet solution does not exist, but many of us are on the ongoing lookout for ways to help our students avoid slipping into the poverty trap when they graduate.

I recently wrote A Case Study on Living in Poverty. The goal was for students to catch a glimpse of what it’s like for a single parent of one child in Cincinnati, Ohio to escape the Cliff Effect.

Using job postings in the Cincinnati area, the case study reveals that it makes more financial sense to take a job at McDonald’s for $8.43 an hour than take a job at Walmart for $13.08 an hour. Both positions offered comparable benefits. I spoke on the phone with the Medicaid offices, as well as SNAP and other government assistance offices to ensure I fully understood the income thresholds necessary to receive government assistance, and what occurs when someone crosses the income threshold to receive assistance.

The case study served as a precursor to a PBL (project-based learning) career assignment. My goal is for students to better grasp the consequences of failing to further their education in college or a trade school. Please have a peek at A Case Study on Living in Poverty!

Thank you, Brian

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Interested in case studies? Check out our case studies here with more on their way later this month too!