Noncompliant Browser Alert:
To avoid site errors, read this message now!
Working Ohio, 1999
Kent State University
Policy Matters Ohio
wisdom says that the economy is booming. And it is true that inflation
and unemployment are low and the stock market and corporate profits are
high. However, 80 percent of Ohio’s workers and 70 percent of the
nation’s make less money in real dollars per hour than comparable
workers did twenty years ago. The poor have gotten poorer, but so has the
middle class, and both lie further than ever from the wealthy. In
this state, as in the rest of the country, men in general, black men in
particular, high school dropouts, and those earning less than the median
have seen especially dramatic wage erosion. Vast inequalities remain,
with women lagging behind men (despite male wage decline), minorities lagging
behind whites, and those with education beyond high school lagging behind
those with post-collegiate education. This quantitative assessment of wages
and employment since 1979 is designed to deepen our understanding of how
recent economic changes are affecting Ohio’s workers. All values are inflation-adjusted
and expressed in 1997 dollars. For further methodology information,
see Appendix A.
Number of Jobs
Grows; Unemployment falls: Ohio added 1,273,000 jobs between
1973 and 1997, for a total of 5,386,000 non-farm jobs by the end of the
period. This increase in employment has triggered an encouraging decline
in Ohio’s unemployment that mirrors the national decline. As of early 1999,
Ohio’s 4.6 percent unemployment rate was slightly lower than the national
Drops: Unfortunately, lower unemployment has not translated into increases
in real income for most workers. In fact, real wages have dropped
for the typical worker in Ohio from $12.47 per hour in 1979 to $10.94 in
1997, a 12 percent fall. While the drop was steeper during the 1980s,
the median wage has continued to erode over the 1990s, despite other elements
of a strong economy.
Persists: Women still earn considerably less than men in Ohio and in
the nation. The gender gap has narrowed over the last twenty years, but
the narrowing in this state is primarily due to a drop in men’s wages,
rather than an increase in women’s. Women’s median wages, in real
terms, have continued to hover just above $9.00 an hour since 1979.
Men’s median wages, which were more than $15.00 an hour in 1979, have since
fallen to just $12.69, a significant drop, but still 37 percent above what
Wages Drop; Race Gap Widens: Minority workers in Ohio, as in the rest
of the country, also get by on a substantially lower wage. Ohio’s black
male workers have been hardest hit by wage erosion, with a 28 percent plunge
in their real median hourly wage, from $13.88 to $10.00. Because
of this dramatic decline, a race gap continues to exist and indeed to widen
in Ohio, despite drops in white male wages. Further, while white women
have seen a very slight increase in their median wages, black women’s real
wages have declined since 1979.
Widens, But Even College-educated Lose Ground in Early 1990s: While
there has always been a significant economic penalty for not completing
school, the penalty has grown stiffer in the 80s and 90s. Workers
without high school diplomas – a full 24.3 percent of Ohio’s over-25 population
in 1990 – have seen their real median wages plunge from $11.17 an hour
in 1979 to a dismal $6.75 in 1997, a 40 percent total drop. Though dropouts
struggled most, workers in almost every educational category lost earning
power between 1979 and 1997. Only those with graduate degrees substantially
increased their inflation-adjusted earnings – by 12 percent between 1979
Wages and More Equality: Unionized workers – those covered by collective
bargaining agreements -- have higher wages, more equal wages overall, and
less variation in wages between men and women, between blacks and whites,
and between less- and more-educated workers. Across the board, workers
benefit from being covered by collective bargaining agreements. Amid
a flurry of statistics in which poverty-wage jobs and wage inequality are
growing and race and gender disparities remain entrenched, the potential
gains from unionization provide possibilities for reversal of these trends.
Unequal and Growing More So: Wage inequality has grown in Ohio
over the last two decades. Although real wages have eroded for workers
across almost the entire income spectrum, those who were already earning
less have had steeper declines. The very lowest earning ten percent
of workers had the largest drop in median wages, 17 percent, from $6.47
to $5.36. This was followed by the next four deciles (the 20th through
50th percentiles), all of which dropped between 12 percent and 14 percent.
Only the top two deciles kept pace over the eighteen-year period, with
the 8th decile (80th percentile) of workers seeing only a 2 percent drop
in wages, and the 9th decile (90th percentile) seeing a 1 percent gain,
from $21.85 to $22.01 per hour.
Off from Shrinking Middle-Class: In 1979, an earner at the 90th
percentile earned 1.75 times as much as someone at the 50th percentile.
By 1997, that gap had widened considerably, with the 90th percentile earner
having a salary that was nearly double what the median worker was paid.
Further, despite a painful 12 percent drop in real earnings at the median,
differences between the poor and the middle widened as well, with the ratio
between median and “low-wage” (10th percentile) workers’ earnings
growing from 1.92 to 2.04 between 1979 and 1997. The middle dropped,
the poor dropped further, and many of those who had been closer to the
middle sunk to poverty-level wages.
More Poor and
Poorer Poor: Increasingly, in Ohio and in the rest of the country,
full-time work can not bring a family out of poverty. The number
of Ohio workers earning sub-poverty wages grew dramatically between 1979
and 1989, and has edged only slightly downward during the nineties. Furthermore,
the gap between the wage of those in poverty and the poverty line is growing.
That is, not only are more workers earning less than the $7.90 needed to
pull a family out of poverty, but these workers are earning less in real
dollars than sub-poverty workers did in the past. In 1979, the 21.4
percent of workers in poverty needed an average raise of $1.60 to reach
poverty-level wages. Now the 28.4 percent of workers under the poverty
line need a higher raise, of $2.01, to reach this subsistence wage.
|Ohio is not
alone in the trends described here. For a comprehensive analysis
of these issues on a national level, see the Economic Policy Institute’s
(EPI) State of Working America 1998-99 by Lawrence Mishel, Jared Bernstein
and John Schmitt, available from Cornell University Press or visit EPI’s
web site at
The 1999 State
of Working Ohio was supported in part by a grant from the Urban University
Project of the Northeast Ohio Research Consortium.