Michael W. Green: “Every dollar you earn climbing from $40,000 to $100,000 triggers benefit losses that exceed your income gains. You are literally poorer for working harder.”
https://www.yesigiveafig.com/p/part-1-my-life-is-a-lie
By Michael W. Green
November 30, 2025
Our entire safety net is designed to catch people at the very bottom, but it sets a trap for anyone trying to climb out. As income rises from $40,000 to $100,000, benefits disappear faster than wages increase.
I call this The Valley of Death.
Let’s look at the transition for a family in New Jersey:
1. The View from $35,000 (The “Official” Poor)
At this income, the family is struggling, but the state provides a floor. They qualify for Medicaid (free healthcare). They receive SNAP (food stamps). They receive heavy childcare subsidies. Their deficits are real, but capped.
Every dollar you earn climbing from $40,000 to $100,000 triggers benefit losses that exceed your income gains. You are literally poorer for working harder.
2. The Cliff at $45,000 (The Healthcare Trap)
The family earns a $10,000 raise. Good news? No. At this level, the parents lose Medicaid eligibility. Suddenly, they must pay premiums and deductibles.
Income Gain: +$10,000
Expense Increase: +$10,567
Net Result: They are poorer than before. The effective tax on this mobility is over 100%.
3. The Cliff at $65,000 (The Childcare Trap)
This is the breaker. The family works harder. They get promoted to $65,000. They are now solidly “Working Class.”
But at roughly this level, childcare subsidies vanish. They must now pay the full market rate for daycare.
Income Gain: +$20,000 (from $45k)
Expense Increase: +$28,000 (jumping from co-pays to full tuition)
Net Result: Total collapse.
When you run the net-income numbers, a family earning $100,000 is effectively in a worse monthly financial position than a family earning $40,000.
Dan from Squirrel Hill's Blog 