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Comment by mberning | Hacker News Reader

“We thought hard about all the ways we could help from tapping our networks to find a more dignified temporary place for our cook to stay, to figuring out how to pay him more without having him lose access to different low-income programs for which he currently qualifies.”

Wow. Or you could actually pay them a living wage that doesn’t require public subsidy. If this were Walmart making this statement they would be crucified.

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Many people are unaware of the huge impact of the welfare cliff, especially when it comes to families with children:

https://www.learnliberty.org/wp-content/uploads/2016/08/welf...

If you are a single parent with two children you get the same net income at $30,000 as at $80,0000 due to benefits getting cut off above $30,000/year income.

That doesn't match other numbers I've seen, and doesn't show any sources. Do you know more about it? (Edit: I'm familiar with the welfare cliff in general, just curious about this analysis of Chicago programs).

That’s ridicilous. The system has clearly been setup to fraud the majority who needs welfare and is a political virtue signaling. I bet the mean salary was right in the Middle of the ”cliff” (around 55k$) when this was decided to ensure very few would get the benifit and cost on government would be minimal.

The logical policy would perhaps be to equalize income to a certain treshold depending on available funds and budget on a particular year. This would also make investments in transits and housing more stable for everyone involved, simplyfing business decisions and quite possibly increase long term profitability.

> The system has clearly been setup to fraud the majority who needs welfare and is a political virtue signaling.

It has this effect, but I'd blame the need to simplify over malevolence.

SF's below market rate housing is a great example of a huge welfare cliff. Make under $60k? You can get a 1 bedroom for $1600/month. Don't? Join everyone else fighting at $3k/month or what not.

So yah, it's a bit ridiculous that we have a system where someone making $59k does better than $70k.

But it's really hard to administer everything as a phase-out system, especially with non-cash benefits. (currently the apartments are required to charge X rent.. so what should happen to the person making $70k/year?)

Hence, these blunt-edge qualifications.

>Make under $60k? You can get a 1 bedroom for $1600/month. Don't? Join everyone else fighting at $3k/month or what not.

Sounds like SF should experiment with marginal rent, based on how marginal tax rates work. Something like: landlords charge a base $x rent, if you make above $50K a bit more is added one, make above $60K a bit more is added, etc. That was the person making $1 over some arbitrary cutoff isn't much worse off.

> so what should happen to the person making $70k/year?

They should ask they employer to only pay them $59k?

So I foolishly read the original sources[1][2]. The image comes from a blog with an obvious libertarian/conservative agenda. For example, another article[3] on the site decries non-discrimination laws for businesses as if red-lining never happened or would have been resolved by market forces (against all historical evidence). This site does not make any explicit recommendations but seems to imply that welfare, as a whole, should be eliminated. Replacing a cliff with a gaping chasm where we can leave our poor to try to scramble their way out.

The original paper[2] is interesting for a few reasons. First, it identifies the problem on page 15 as steep drop offs in some welfare programs, instead of a more tapered reduction in benefits. Second, it's apparent that the linked image is the most extreme scenario - which applies to only a small segment of the population. Indeed, once you look at the 2-parent household example on page 30, the cliff is much less severe. In the end the paper recommends giving individual states more power to set benefits in a way that tapers off the benefit received and removes the welfare cliff.

What neither of these sources mention is the other, tried and true way to address the problem: making many of these benefits universal. The obvious example is healthcare, where those making 30k/year and 120k+/year get access to the same public system. But other public benefits like public childcare are not unheard of[4].

[1] https://www.learnliberty.org/blog/the-welfare-cliff-and-why-...

[2] https://d2dv7hze646xr.cloudfront.net/wp-content/uploads/2014...

[3] https://www.learnliberty.org/blog/the-sweet-cakes-case-let-t...

[4] https://eric.ed.gov/?id=ED367491

They have staff making $80-90,000 Which is certainly a living wage .. somewhere else. And that's the problem the Bay Area has.

And a solid living wage for a single person in SF.

It's a problem if you have children to support.

That is a cost of living vs income thing everywhere - although they are an extreme example from their dysfunction. If nobody has a job in the area housing will generally be cheap due to lack of ability for anyone to pay and lack of reason for people to want to live there. If there is plenty of employment in an area it drives up housing demand and prices. There are always alternatives but the price may not be very well liked.

I think the implication was that he was at a welfare cliff.

Even Walmart cannot afford to open and staff a store in SF.

Paying restaurant workers a 2-3x living wage is a fine idea except that it would raise the price of a pork chop to $45 and close the restaurant. Darn macroeconomics!

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