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Employers continue to report difficulty finding workers. In a competitive labor market, we would expect persistent shortages to put upward pressure on wages. Yet the September jobs report, released Oct. 2, showed hourly earnings rising just 0.1% for the month. The disconnect raises an important question: What if part of the labor shortage does not reflect a lack of workers willing to advance, but economic incentives that make advancement financially risky?

In our work with low-income families, employers, and workforce development programs, we have seen a recurring pattern. Workers turn down additional hours, raises, and promotions even when they want to earn more. From an employer's perspective, these decisions can seem irrational. But when we examine the household economics, they often make perfect sense.

Consider a mother we worked with who accepted additional hours to support herself and her daughter. Her earnings increased, but the additional income pushed her above an eligibility threshold for public assistance she still relied upon to work. The value of the benefits she lost exceeded her additional wages. By working more, she and her daughter were worse off.

Her experience illustrates a larger problem in the American labor market: The financial return to work depends not simply on how much an employer pays, but on how earnings interact with the public benefits that help struggling families afford housing, food, health care and child care. For some low-income workers, the next step up the economic ladder can leave them with fewer resources than they had before.

The result is a labor market in which employers struggle to fill positions while some existing workers face perverse financial incentives not to increase their hours or pursue advancement. Understanding that contradiction is essential to improving economic mobility—and to making better use of the workforce we already have.

Economists call this the "benefits cliff." Programs such as childcare subsidies, housing aid, food assistance, and public health coverage each have their own income limits and phase-out rules. Taken separately, each rule may look reasonable. Stacked together, they can mean that a household near a threshold loses a dollar or more in support for each additional dollar it earns from working. No sensible tax system would take 100% of a worker's next dollar, but for some families the combination of benefit cuts across programs does that in practice.

How many workers are affected? Research from Washington University in St. Louis found that about one in five low-wage workers receiving public benefits made a job-related decision to protect their safety-net eligibility. Among those surveyed, 11.1% turned down extra hours, 8.4% declined a raise or promotion, and 8.3% passed on a job offer.

Those figures describe a minority, and they come from self-reports. Many benefits phase out gradually and at different income thresholds, and many workers never face a single cliff, but a series of smaller setbacks. But the steepest cliffs are concentrated where employers feel the labor shortage most: frontline jobs, working parents, and the bottom rungs of career ladders companies try to fill from within.

For a business, the cost is easy to misread. When a dependable worker won't pick up more shifts or turns down a higher-level role, a manager may conclude that they lack drive. As a result, the company could keep paying to recruit outside candidates for jobs its existing talent could have grown into.

Employers can't rewrite public benefit eligibility rules, but they can change how those rules interact with those on their payrolls.

Give workers the numbers before they decide. Offer confidential, voluntary benefits counseling before an employee accepts more hours, a raise, or a promotion. The Federal Reserve Bank of Atlanta's Career Ladder Identifier and Financial Forecaster models how changes in earnings interact with benefits along a career path. Community partners can help workers interpret the results. None of this should become part of a performance review.

Make the steps big enough to clear the cliff. A small raise or some extra shifts can leave a family worse off. A larger increase paired with training may carry them past the threshold. Companies should map each pathway end to end: the starting wage, the next increase, the skills required, and the time it takes to reach pay that leaves a household clearly ahead. Workers can plan around a career and income ladder they can see.

Cut the costs that make advancement risky. Predictable schedules let parents arrange childcare. Childcare support or short-term transition assistance is able to bridge a temporary gap. Those reviewing any such support should understand the public safety net, because a well-meant subsidy can trigger the very loss it was meant to prevent.

Track it like any other workforce metric. Measure how often employees decline more hours or promotions, whether promoted workers stay, and how many trained workers move into hard-to-fill roles. Unexplained patterns in those numbers may point to a benefits cliff.

The lasting fix belongs to policymakers. Benefits should phase out gradually, and programs should coordinate their thresholds so they don't all fall away at once. Utah is piloting an approach that pairs financial coaching with cliff mitigation, which is a promising start. Business leaders have unusual credibility on this issue, because they can show lawmakers, with evidence from their own workforces, how current rules hold back hiring and promotion.

Americans expect work to be the way up. For some families, the math says otherwise, and employers are well placed to help change it.

Jason Janz is CEO and co-founder of , a Denver-based nonprofit that helps families move from poverty to prosperity. Steven C. Taylor is founder of ED2WORK, which works with states, companies, and nonprofits to strengthen education and career pathways for adult and working learners. They are co-authors of "Together We Climb: A Community-Driven Approach to Break the Cycle of Poverty and Build Prosperity."