The middle falls

September 2, 2012
   
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While declines have been much worse at the bottom, the typical Ohio worker has been on a downward wage trajectory since about 2006 when adjusting for inflation. The real median wage in Ohio in 2011 was just $15.20, much lower than the peak years of 2006, 2000 and 1979, but also lower than in much of the 1990s and early 2000s. In just the last calendar year, Ohio’s median worker saw a 45 cent drop in inflation-adjusted dollars from the 2010 median wage of $15.65 (in 2011 dollars). This bouncing around, with frequent wage declines, is in stark contrast to the period between the end of World War II and the late 1970s, when median wages had a steady upward trend.

Ohio once had median wages consistently higher than those of the United States – well over one dollar an hour higher in today’s dollars. But wages of the typical US worker have grown slowly since 1979, while wages of the typical Ohio worker have fallen sharply. By 2011, despite stagnant wages throughout much of the 2000s nationally and despite a two-year drop in the national median wage, Ohio’s typical worker lagged more than 80 cents behind the typical U.S. worker in hourly wages, earning just $15.20 an hour at the median. Wage loss over the 2000s in Ohio was among the highest in the country, second only to Michigan. Ohio’s wages fell by $1.33 between 2000 and 2011, while Michigan’s fell by $1.36 in inflation-adjusted 2011 dollars. Hourly wages also fell steeply over that period in Minnesota (-$1.10), South Carolina (-$1.09) and Alaska (-91 cents). By contrast, the five states with fastest-growing wages over that period were D.C. (+$3.54), North Dakota (+$2.00), Wyoming (+$1.93), Massachusetts (+$1.41), and Florida (+$1.40). Washington D.C. and Massachusetts have the highest percentage of workers with a bachelor’s degree and North Dakota and Wyoming have seen big growth in the percentages of their population working in the oil industry.

Ohio is now well below average in median wage – tied with Maine for 30th highest median wage among states at $15.20. The highest earning states – DC ($22.99), Connecticut ($20.29), Massachusetts ($19.81), New Jersey ($18.99) and Maryland ($18.93) – all have high levels of bachelor degree attainment, more protection of collective bargaining and are diverse northeastern economies. The upper Midwestern states whose economies most resemble Ohio’s generally have wages similar to Ohio, with wages a bit lower in Indiana ($15.10), a bit higher in Michigan ($15.77) and Wisconsin ($15.94) and significantly higher in Illinois ($16.42) and Pennsylvania ($16.43). The lowest-wage states – Arkansas ($13.84), Montana ($13.97), Mississippi ($14.20), Tennessee ($14.52), and North Carolina ($14.53) – tend to have lower levels of education, much less unionization, more policies that hinder unions, less urban and less diverse economies.

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