When I met my friend Nia she was a young single mom of a toddler. Her passion was working with children with autism. Nia was on a mission to build a successful future for her family and started working with a mentor to balance her financial goals with advancing in a field she loves. One day, she shared about this process with a sentence I’ll never forget:
“We’re trying to figure out how I can afford to take on a second job.”
This sentence shouldn’t make sense. More work is not something one should need to afford. Instead, it should make the rest of life more affordable. If you encountered this sentence in an English textbook, you’d figure that it must be some sort of typo.
But sadly, reality doesn’t follow the rules of the English language for Nia, or for millions of working Americans who face a benefits cliff when they try to get ahead in life. Increased hours or pay are literally unaffordable for many. Earning more wages can actually result in a loss of net income. How is that possible? A wage increase can cause a person or family to become ineligible for public benefits. These could be benefits like Medicaid, child care or rent subsidies. A person encounters a ‘cliff’ when a raise does not make up for the value of that loss of benefits, leaving someone with less overall resources, and possibly unable to pay rent or provide for their family. In future blogs, we’ll dive deeper in the benefits cliff phenomenon.
Even more perplexing than the fact that these cliffs exist is the reality that it can be simply impossible or very difficult for a person to calculate when they will hit one.
Let that sink in for a minute...
In addition to some work being unaffordable, this is also true:
And it’s not just fear of public benefits cliffs, strictly speaking, that limit career growth. Not knowing the true value of employer-sponsored benefits, the impact of co-pays and deductibles, and the long-term payouts of retirement benefits, are also big unknowns for workers trying to advance.
This is a big problem, and a complex problem, but it is not impossible to solve. And it’s a problem not just for those facing a cliff. Employers struggle with recruitment and with advancing existing employees because they aren't aware of benefits cliffs or which potential or current employees are facing one. This amount of lost potential affects our whole economy.
This problem is why Parsley exists.
In 2019, a group of partners in Dane County came together around a challenge issued by Schmidt Futures, a philanthropic initiative founded by Eric and Wendy Schmidt to use technology and data to increase the net income of 10,000 people. With the support of the University of Wisconsin--Madison, our team was awarded $500,000 in September of 2020. At the time we were called Opportunity Calculator.
We immediately got to work developing the team and expertise to build a net income forecasting tool and have since begun building the platform, starting with Wisconsin public benefits eligibility information, tools for navigating employer benefits, and select career path modeling capabilities. What’s unique about our approach is that we’ve learned employers can and want to be part of the solution. Parsley includes tools for individuals and employers to learn from the same data, so they can increase retention and internal advancement in their workforce.
We came to this holistic and practical approach to the problem because of the daily lived experience of our partners and the people in our community. Parsley partners are leaders in workforce development: local government, funding intermediaries and community-based workforce training organizations who work with people and employers everyday. We are committed, not just to provide tools that support and sustain an equitable regional economy, but to the potential that Parsley can have in communities everywhere.
In coming months, we’ll also be hearing more from Parsley team members and why they are passionate about this work. Personally, I’m motivated by all of the talented and hard-working people I know who need Parsley. If Nia had Parsley, she could use it to see how much her child care copay would increase if she took that extra part-time job. She could use it to determine how much money she could save for the unknowns of tomorrow without exceeding asset limits set for the public benefits she needs today. And most impactfully, she could compare income growth scenarios in her field and related fields, to help her set long-term goals.
It’s for people like Nia, in Wisconsin and across America, trying to make a better life for themselves and their families, that the Parsley team is hard at work creating tools to make opportunity not just affordable but attainable. And we’re working as fast as we can, because we don’t think our communities can afford to wait.