Jack Schron, Jr. — President Jergens, Inc. — The Benefits Cliff

Summary

Written testimony of Jack Schron, Jr., President of Jergens, Inc., a manufacturing company in Cleveland, on the benefits cliff, dated June 3, 2026. The testimony states that manufacturers face a skilled labor shortage and hire lower-skilled workers who start at a lower base pay that rises in steps as they learn. It states that such pay increases can put public benefits such as SNAP and child care in jeopardy, and that in Ohio a worker may be better off at $15/hour with full benefits than at $18/hour. It proposes that benefits phase down in steps as pay rises instead of ending at a cliff. It also describes a program Jergens has led for second chance individuals to enter the manufacturing workforce and reports a recidivism rate of less than 1% among 500 people now working in manufacturing.

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Full text

Jack Schron, Jr.
President
Jergens, Inc.

  Good afternoon. Thank you for allowing me to testify today on this very important
subject, the Benefits Cliff.

   My name is Jack Schron, I am president of Jergens incorporated, located in Cleveland
OH. Jergens is an 84-year-old manufacturing company of which I represent the third
generation of the business. We manufacture workholding parts used in various industries
to include aerospace, defense, entertainment and we also manufacture a precise
electronic screwdriver.

The universal problem faced by most manufacturers today is the skills labor shortage.
Jergens is facing this same problem. We cannot find the trained and experienced
workforce. The alternative is to hire people with low or no skills and train them. Because of
the lack of a skills in the workforce, manufacturing businesses start the new teammates at
a lower base salary during the training period. It is our desire at Jergens to accelerate the
pay as quickly as the new teammate can learn.

  This is where the benefit cliff can have an impact on the individual. As the individual
learns and their pay increases through incremental steps, their public social benefits can
be put in jeopardy. We can see if their health care benefits cross over because employees
elect with Human Resources to change to our attractive health insurance. However,
Human Resources is not aware if benefits like Snap and Child Care are impacted as an
individual increases in pay unless they happen to mention it. We do know that some
employees have said to HR they wanted to examine the pay increase to see how it might
impact them.

   Jergens encourages growth and pushes to increase pay based on skills learned so
people know when joining Jergens they are entering career. We want to eliminate someone
from being put in a position of electing growth and pay increases vs. social benefit it would
seem that a better approach would be that as pays transitions upward that social benefits
should transition downward on a similar pattern vs. a cliff. As skills are learned the pay
does not go straight up it goes up in steps. For the individual it would seem benefits should
follow that same step concept and not be a cliff drop off just because of a pay increase of
an extra $.50 or $1.00 an hour.

 In Ohio someone is actually better off being paid $15/hour and receiving their full SNAP
and child care support than being paid $18/hour when the Cliff has its worst impact. This
problem continues in Ohio up till $22 when earning $15/hour still yields a slightly better
position.

  Focusing now not on the Benefits Cliff but looking at the bigger societal picture, it would
seem it better transitioning from receiving Social Benefits allowing a person to someday
stand on their own. This transition means that the individual now takes pride in themselves
and is engaged in their community. Whatever we can do to make this transition from
dependent on Social Benefits to having a tax paying job should be encouraged.

At Jergens we have seen a similar result as we have led a program for second chance
individuals to enter the manufacturing workforce following their return to society.
The self-worth the 500 people now working in manufacturing has resulted in a recidivism
rate of less than 1%. There are similarities of self-worth that the individual sees when their
pay going up in incremental steps is powerful. Like our changes with second chance in
manufacturing so too should be change from a cliff program to transitioning social benefits
and someday people will be fully able to support themselves without this benefit. The
individual and their family wins, the community wins, the business community wins and
society would win if Social Benefits would change from a Cliff formulary to a transitional
method with this change.


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