building ohio's future middle class

8/9/2019 Building Ohio's Future Middle Class

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ExpandingOpportunityfor a NewGeneration POLICY

MATTERS

OHIO

Building Ohios

Future MiddleClass :

Nancy K. Cauthen

Amy Hanauer

Viany Orozco


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About DmosDmos is a non-partisan public policy research and advocacy organization. Headquartered in New YorkCity, Dmos works with advocates and policymakers around the country in pursuit o our overarchinggoals: a more equitable economy; a vibrant and inclusive democracy; an empowered public sector that worksor the common good; and responsible U.S. engagement in an interdependent world.

Dmos was ounded in 2000.

Miles S. Rapoport, PresidentTamara Draut, Vice President o Policy and Programs

About Policy mAtters ohioPolicy Matters Ohio is a non-proft, non-partisan research institute dedicated to an economy that works orOhio. We seek to create a more prosperous, equitable, sustainable and inclusive economy, through research,media work and advocacy. Areas o inquiry or Policy Matters include work, wages, education, housing, en-ergy, tax and budget policy, and economic development.

All reports are available at www.policymattersohio.org.

About the A better DeAl initiAtive

ExpandingOpportunityfor a NewGeneration

Dmos Postsecondary Success Project is part o a larger initiative on expandingopportunity or young people, A Better Deal: Expanding Opportunity or aNew Generation. Tis initiative is a multi-year policy and advocacy campaigndesigned to address the declining economic opportunity and security acing a

new generation o young people. Over the last 30 years, it has become increasingly dicult or young peo-ple to enter and remain in the middle class. All the hallmarks o a middle-class liea college education, a

job with decent pay and benefts, home ownership, the ability to provide opportunity or ones children, anda secure retirementare harder to come by in todays America.

Te goal o the A Better Deal initiative is to reverse decades o declining opportunity and growing insecu-rity by developing and advocating or bold new policy ideas. Working closely with advocates, policymakers,

young leaders, and other stakeholders, we seek nothing short o a new social contract or the 21st Centurythat will provide a bridge into the middle class or those at risk o being let behind.

AcknowleDgements

Te authors thank Roberta Garber o Community Research Partners and Michael Charney o Ohio YouthVoices or their thoughtul comments and suggestions. Piet Van Lier o Policy Matters Ohio and LucyMayo and Robbie Hiltonsmith o Dmos also made valuable contributions to this report. We would alsolike to thank David Knox oAkron Beacon Journalor his support with using the American Community Sur-

vey. Design and layout by Cory Isaacson.


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Authors biosNancy K. Cauthen is Director o the Economic Opportunity Program at Dmos, where she brings twodecades o experience researching and analyzing public policies that promote opportunity and reduce eco-nomic hardship. Nancys recent work ocuses on renewing the social contract with the next generation withan emphasis on three key policy areas: increasing postsecondary success among young people rom low- and

moderate-income amilies; improving supports or amilies raising young children; and strengthening So-cial Security. Prior to coming to Dmos in February 2009, Nancy spent 10 years at the National Center orChildren in Poverty at Columbia University, where she served as Deputy Director and Director o FamilyEconomic Security. Tere she conducted research on ederal and state work support policies such as earnedincome tax credits, child care assistance, and health insurance; the connections between amily econom-ic status and childrens chances or success; measures o poverty and income adequacy; welare reorm; and

why Social Security matters or children. She speaks nationally on these topics and has testifed beore Con-gress and state legislatures. A political and historical sociologist by training, Nancy received her PhD in So-ciology rom New York University and also holds degrees rom the University o Michigan-Ann Arbor andthe University o Wisconsin-Madison.

Amy Hanaueris the ounding executive director o Policy Matters Ohio, a non-proft, non-partisan policyresearch institute dedicated to examining issues that matter to working amilies in Ohio. In 2008, Te Na-tion magazine named Policy Matters the most valuable state or regional organization in the country. Sincethe group started in January o 2000, Policy Matters has produced more than 160 reports, generated morethan 1,600 media stories, and begun to change the economic debate in Ohio. Amy has a Masters o Pub-lic Administration rom the University o Wisconsin-Madison and a B.A. rom Cornell University. She haspreviously done research and policy work in Wisconsin, Colorado and Washington, D.C. For Policy Mat-ters, in addition to running the organization, Amy does research on work, wages, tax policy, energy poli-cy and other issues. Amy is on the Board o Directors and the Executive Committee o Dmos and on the

advisory committee to the national Economic Analysis and Research Network (EARN). She serves on theOhio legislative Compact with Ohio Cities ask Force and was invited earlier this year to be part o a paneldiscussion with Vice President Joe Biden on the uture o manuacturing.

Viany Orozco joined Dmos in October 2008 to provide research and analysis on the economic challeng-es acing young people, with a particular ocus on state-based policy solutions. She has co-authored sev-eral reports on postsecondary success, including Work Less Study More and Succeed: How Financial SupportsCan Improve Postsecondary Success and Graduated Success: Sustainable Economic Opportunity Trough One- andwo-Year Credentials. Vianys writings have appeared in Te American Prospect, Te Hill, and Wireap. As a

researcher at MDRC and the Drug Policy Alliance, Vianys previous work ocused on program evaluationand drug policy. She has a B.A. in political science rom UC Berkeley and a Masters in Pubic Aairs romPrinceton University.

coPyright

2010 Dmos: A Network or Ideas & Action


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Current Members

Stephen Heintz, Board ChairPresident,Rockeeller Brothers Fund

Miles Rapoport, PresidentMarc C. AlexanderProfessor of Law,Seton Hall University

Ben BinswangerChief Operating Ocer,

Te Case Foundation

Raj DateChairman & Executive Director,Cambridge Winter

Christine ChenStrategic Alliances USA

Amy HanauerFounding Executive Director,Policy Matters Ohio

Sang JiPartner,

White & Case LLP

Rev. Janet McCune EdwardsPresbyterian Minister

Clarissa Martinez DeCastroDirector of Immigration &

National Campaigns,National Council o La Raza

Arnie MillerFounder,Isaacson Miller

Wendy PuriefoyPresident,Public Education Network

Amelia Warren TyagiCo-Founder & EVP/COO,

Te Business alent Group

Ruth WoodenPresident,Public Agenda

Members,Past & On Leave

President Barack Obama

Tom Campbell

Juan Figueroa

Robert Franklin

Charles Halpern

Sara Horowitz

Van Jones

Eric Liu

Spencer Overton

Robert Reich

David SkaggsLinda Tarr-Whelan

Ernest Tollerson

Aliations are listed foridentication purposes.

As with all Dmos publications, theviews expressed in this report do notnecessarily reect the views of theDmos Board of Directors.

Harriet ApplegateExecutive Secretary,North Shore Federation o Labor

David BergholzFormer Executive Director,George Gund Foundation

Michael CharneyDirector,

Youth Voices or EconomicJustice

Joyce Goldstein, Board ChairAttorney,Joyce Goldstein and Associates

Blaine A. GrinExecutive Director,Community Relations Board,City o Cleveland

Susan HelperProfessor,Case Western Reserve University

Chris HowellProfessor,Oberlin College

Bakari KitwanaAuthor,Why White Kids Love Rap, TeHip Hop Generation, Te Rapon Gangsta Rap

David MegenhardtExecutive Director,United Labor Agency

Susannah MuskovitzAttorney,Faulkner, Muskovitz andPhillips

Julian RogersEducation Voters o Ohio

Seth RosenVice President,Communication Workers oAmerica, District Four

Baldemar VelasquezFounder and President,Farm Labor OrganizingCommittee

George ZellerEconomic Research Analyst

Dmos boArD of Directors

Policy mAtters ohio boArD of Directors


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introDuction

odays young adults are coming o age in a tough economy, on the heels o 30 years o declin-ing economic opportunity and security or all but the most auent and most highly educated.

Tese changes are quite evident in Ohio, where the once-mighty manuacturing sector that pro-vided better-than-average jobs in the 1960s and 1970s has eroded, hitting young adults partic-ularly hard. Although many o the levers o opportunity that once ueled and defned Americasmiddle class have weakened or broken, a reorientation could restore opportunity and provide to-days young adults with a more secure economic uture.

In the decades ollowing World War II, Americans experienced rapid economic growth and so-cial mobility, which produced a strong and burgeoning middle class. But the postwar middle class

was no accident: our government, business leaders, workers and veterans orged an implicit socialcontract that ushered in unprecedented prosperity.

Ater World War II, frst the GI Bill and then the Higher Education Act o 1965 increased col-lege access and aordability. Homeownership increased as government programs enabled morepeople to obtain home loans, made mortgage interest tax deductible, promoted suburban housingdevelopment, and enacted reorms targeting discriminatory lending practices. Income and wealth

grew as public policy ueled the economyby ensuring a tight labor market, promot-ing ull employment, and erecting ewerbarriers to union organizing; ederal leg-islation raised the minimum wage to ahistoric high in 1968.

Tese postwar policy eorts and invest-ments, combined with the commitment

o employers to provide health and pension benefts, created a system through which millions oAmericans could enter the middle class. Ohio provided ingenuity, muscle, and inrastructure andreaped many benefts including good jobs or skilled blue-collar workers and a commitment tohigher education reected in a strong state university system. Over time, as overt discriminationdeclined, opportunities expanded or women, blacks and Latinos, and these groups continue toreap the benefts o a more inclusive society.

Te world has changed dramatically since the mid 1970s, however, with technology and global-ization vastly altering the nature o work. Global competition puts downward pressure on Amer-ican wages and many o the new jobs created in the service economy pay less than the manuac-turing jobs they replaced. Deending against these trends, many industries have slashed laborcostscutting jobs, wages and benefts. Te social contract has rayed and young adults are liv-ing with the consequences.

Although our economy remains extremely productive, growth in prosperity is no longer broadlyshared. Productivity rates grew by 1.3 percent each year between 1979 and 1989, by 1.6 percentannually between 1989 and 2000, and by 2 percent annually between 2000 and 2007. But mid-dle-class Americans did not, or the most part, share in this impressive growth. During the post-

Americas postwar middle class was no accident:our government, business leaders, workers, andveterans forged an implicit social contract thatushered in unprecedented prosperity.


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war period, typical amilies saw much more o the gains rom the rising productivity to whichthey contributed.1

Employment has become less stable and less secure, especially or those without a college degree.Although more young Ohioans are enrolling in college than in the past, skyrocketing costs arehindering the ability o low- and middle-income students to stay in school and graduate. Youngadults are the most likely to be uninsured o any age group, and they are racking up debt not onlyto pay or school but also just to cover basic expenses.

Te unraveling o the social contract predates and sets a harsh context or the current economiccrisis. But smarter policy at the ederal level and or Ohio can rebuild the entryways to the mid-dle class, provide more opportunity and ensure that prosperity is broadly shared or the next gen-eration.

Tis report provides a comprehensive portrait o todays young adults in Ohio and, where possible,

compares their economic status to that o the previous generation. Te term young adultsin thereport generally reers to 18- to 34-year-olds. Te report is organized into our key areas: post-secondary education, employment and earnings, debt and assets and raising a amily. It concludes

with a set o policy recommendations that would help rebuild and restore the middle class.


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PostseconDAry eDucAtion

Over the last several generations, Ohioans have become more highly educated, and young adultscontinue to pursue higher education in ever growing numbers. Earnings grow dramatically with

each additional level o schooling completed, and workers with a bachelors degree earn more thantwice as much as those without a high school diploma (Figure 1). Earnings or those with only ahigh school education or less have stagnated or dropped. Many Ohioans understand that gettinga college education is as important as getting a high school diploma used to be.2

In the decades ollowing World War II, Ohio and the U.S. experienced a rapid rise in educationlevels. In 1940, just a quarter o Ohio adults had a high school degree, and ewer than 5 percenthad a bachelors degree. By 2000, 83 percent o Ohioans had a high school diploma and 21 percenthad a our-year degree.3 While the postwar period was responsible or much o this increase, col-

lege attainment levels have risen in each decade, and gains or women and minorities have beenmost impressive in recent decades.

Te thirst or education continues to grow among young people in Ohio and the nation. Nation-ally, the percent o high school seniors who said they expect to earn a bachelors degree or high-er nearly doubled rom 35 percent in 1980-1 to 69 percent 20 years later. Rising educational aspi-rations are evident across racial and ethnic groups, with low-income students showing the moststriking increases: in 1980-1, only 16 percent o 12th graders in the lowest socioeconomic quartile4expected to earn a bachelors degree or higher, but by 2003-4, that fgure had more than tripled to51 percent. During that same period, womens educational aspirations have outpaced mens.5

Figure 1. Median Hourly Wages of Ohio Workers by Education, 1979-2008(2008 dollars)

$10

$15

$20

$25

Bachelors or higher

Some college

High school

Less than high school

2008

2004

2000

1996

1992

1988

1984

1980

Source: Economic Policy Institute analysis o Current Population Survey data, using CPI-U-RS.


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Rising aspirations have translated into steadily increasing college enrollments. Just in the last de-cade, undergraduate enrollments increased 19 percent between 2000 and 2007. But improve-ments in college attainment rates have been slow: during that same period (2000 to 2007), thepercent o young adults ages 25 to 29 years old with a bachelors degree held steady at roughly 29percent.6 And substantial gaps remain in college attainment rates by income, race and ethnicity;

women have surpassed men in educational attainment.

Over the last 25 years, going to college has become less aordable as states have slashed aid tocolleges and universities, tuition and ees have risen dramatically, and fnancial aid has not keeppace. Students and their amilies now pay (or borrow) a lot more or a college degree, and morestudents workand work longer hoursto put themselves through school. All o these actorsincrease the risk or young people, especially those rom low- to moderate-income amilies, to en-roll in college only to drop out because o fnancial constraints.

In both Ohio and the nation, the result is low completion rates: roughly hal o all our-year col-lege students drop out within six years o enrolling. Te percentage o dropouts is even higher or

two-year students. Below we discuss these trends in greater detail and identiy some opportuni-ties or improving postsecondary success in Ohio.

c e ha g sad o

Enrollment gains. Among 18- to 24-year-olds in Ohio, the percent enrolled in collegeincreased rom 30 to 34 percent between 1991 and 2007.7 And there are reasons to behopeul that college enrollment levels will continue to grow in Ohio. According to Gov-ernor ed Stricklands January 2010 State o the State Address, enrollment in communitycolleges has grown 23 percent over the last three years and nearly 66,000 more Ohioansare enrolled in the states public colleges and universities than in 2006.8

Gaps by income, race and ethnicity. Young adults rom high-income amilies in Ohio arethree times more likely to enroll in postsecondary education than low-income young peo-ple. Te gap in college enrollment between white and Arican-American 18- to 24-year-olds in Ohio is 14 percent and the gap in college enrollment between whites and Latinoso the same age group is 21 percent.9 Providing more need-based fnancial aid would helpreduce these enrollment gaps.

ma w s h eda A ua cp D Completion rates. In Ohio, just over hal (55 percent) o students who seek a bache-

lors degree graduate within six years, which compares avorably to the nation as a whole.Among two-year students, only a quarter (26 percent) earn a degree within three years.10

Gaps by income, race and ethnicity. Low-income students at our-year colleges in Ohioare nearly twice as likely to end their studies without completing a degree than their high-er-income peers (28 percent versus 15 percent). Low-income students at two-year col-leges are hal as likely to earn a degree in comparison to their high-income peers (Figure2).11


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While 58 percent o white students in Ohioseeking a bachelors degree graduate with-in six years, only 33 percent o black stu-dents do. Tis 25 percentage point gap incompletion rates between whites and blacks

in Ohio is substantially higher than the na-tional gap, which is 19 percent. Te comple-tion gap between white and Latino studentsin Ohio is 11 percentage points.12

c Aa ra o

a ia, s

In 2008, 33 percent o Ohio adults (age25 to 64) had an associates degree or moreeducation, up rom 25 percent in the early1990s. Tis attainment rate is lower than thebest states, where 44 percent o adults havean associates degree.13 In 2008, 28 percent

o 25- to 34-year-olds in Ohio had completed a bachelors degree (the national fgure orbachelors degrees o this age group is 30 percent).14 Both nationally and in Ohio, the ratesare gradually improving. However, given the declining labor market returns to those withless than a college degree, the increases have not been sucient enough to protect livingstandards.

t c a h o b

ia ha b cd

Tuition and fees. Over the last decade,tuition and ees at public our-year uni-

versities in Ohio increased by 33 per-cent. Over the same time period, tu-ition and ees at community and tech-

nical colleges rose by 20 percent (Fig-ure 3).15 Beore the current fnancialand fscal crisis, policymakers had de-

voted substantial resources and madeit a priority to hold tuition steady, a

welcome change or this high tuitionstate. uition was rozen or fscal years2008 and 2009, but a planned third-

year reeze was eliminated. Legislationpassed in July 2009 allows public col-

Figure 2. Six-Year College CompletionRates in Ohio by Income, 2004

High IncomeLow Income

BA at 4-Year CollegeAA at 2-Year College

26%

47%

53%

70%

Source: State o College Opportunity in Ohio 2005.

Figure 3. Annual Tuition and Fees in Ohio andU.S., 1998-2008 (2008 dollars)

$2,000

$2,800

$3,600

$4,400

$5,200

$6,000

$6,800

$7,600

$8,400

$9,200

U.S.

Four

U.S.ComColle

OhioTechColle(2-ye

OhioComColle

OhioFourMainCam

2007 - 082004 - 052001 - 021998 - 99

Source: Ohio Board o Regents, Survey o Student Charges 1989-

Figures are not weighted for enrollment.


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leges and universities to increase tuition up to 3.5 percent in each o the two years coveredby the 2010-11 biennial budget.

Ohio compared to the U.S. Te average tuition levels or public two- and our-year col-leges and universities in Ohio, which enroll 75 percent o college students in the state, are

well above national averages32 percent higher or main campuses, 27 percent higher orcommunity colleges, and 61 percent higher or technical colleges.16

faa Ad ha n kp Pa c c

Financial aid versus cost. Full-time students rom low- to moderate-income amilies at-tending our-year public universities in Ohio ace an average o $10,265 a year in uncov-ered expenses ater accounting or all grant aid received.17 At the lowest-priced colleg-es in the statecommunity collegesull-time students rom low- to moderate-incomehouseholds ace an average o $8,042 in uncovered expenses annually.

Cuts in nancial aid. Ohios response to the struggling economy has taken its toll onneed-based fnancial aid. For example, the Ohio College Opportunity Grant, which is themain source o fnancial support or students rom modest backgrounds, was reduced byapproximately $225 million or fscal years 2010 and 2011.18

l w h ad Pa-t e ipd s

Long work hours. Financial constraints lead many young people to work long hours inorder to fnance their education, compromising their academic progress. A national studyfnds that about 40 percent o students who worked ull-time while enrolled let school

within three years, compared to about 20 percent o those who worked part-time. Youngcommunity college students are particularly aected by the need to work. Nationwide, alarger percentage o young community college students work than their counterparts atpublic our-year institutionsand they work much longer hours.19

Part-time enrollment. In addition to the pernicious eects o employment on their stud-ies, long work hours also lead many young community college students to enroll part-time. In Ohio, almost hal o students under age 25 attending a community college (43percent) enroll part-time.20 Yet part-time enrollment is not conducive to success in col-

lege. A study o well-prepared Ohio community college students (those not enrolled in re-medial math) ound that 62 percent o ull-time students let school without completing adegree, compared to a whopping 83 percent o part-time students. Neither rate is encour-aging, but clearly part-time enrollment is more challenging.21


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emPloyment AnD eArnings

Te typical earnings o ull-time workers under age 35 are substantially lower today in real termsthan they were a generation ago. In Ohio, the one exception to this general trend is earnings or

women ages 30 to 34 with some college education, especially those with at least a our-year de-gree. College-educated women in Ohio in their early to mid 30s earn 7 percent more than theircounterparts 40 years ago. During the same period, young male workers ages 20 to 24 without acollege degree in Ohio experienced wage declines o more than 40 percent.22

Te lower wages o todays young workers can be explained, both in Ohio and nationally, in partby the disappearance o unionized manuacturing jobs that oered good wages and benefts or

workers with only a high school diploma. Tese jobs have largely been replaced by non-union,low-wage service jobs that oten dont provide health insurance or retirement benefts. Over athird o older workers in Ohio were unionized in 1983 compared to 18 percent now. Among

younger workers (under age 35), the unionization rate declined rom 21 to 10 percent over the last

25 years.23

In addition to lower wages and ewer ringe benefts, todays young workers have a much hardertime advancing in the labor orce than did their parents. Since the 1970s, middle-managementand other jobs that provided stepping stones to better pay and greater security have been slashedor outsourced and replaced by jobs with lower pay, ewer benefts and less security.

sa D ea eda, ra ad gd

Education. Te earnings o young workers in Ohio show the dividends o higher edu-cationdividends that increase as workers get older (Figure 4). In 2008, workers ages

30 to 34 with at least a our-yearcollege degree earned 44 percentmore than workers with only ahigh school diploma; the dier-ence in earnings between collegeand high school graduates ages25 to 29 was 36 percent.

Race. Te earnings oyoung workers in Ohio dier byrace as well. In 2008, typical in-comes or white workers underage 30 were 17 percent higherthan earnings o Arican Amer-icans and 13 percent higher thanthose o Latinos. Te earnings o

young Asian-American adultsin Ohio were 15 percent higherthan or young whites, although

Figure 4. Median Earnings of Young Ohio Workersby Education and Age, 2008

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

College or MoreSome CollegeHigh SchoolLess than High School

30-3425-2920-24

Source: U.S. Census Bureau, 2008, American Community Survey. Workers

defned as individuals who worked at least 40 weeks in the year.


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Asian Americans account or less thantwo percent o the population in Ohio.For all racial and ethnic groups exceptLatinos, the earnings o workers underage 30 in Ohio are below the national

average (Figure 5).

Gender. Te gender gap in in-come is considerably larger than therace gap. Young male workers ages 20to 24 years and those ages 30 to 34 inOhio earned about 25 percent more in2008 than their emale counterparts.

Te gender gap was lower (17 percent)or workers 25 to 29 years (Figure 6).

Tis is also despite the act that youngwomen have surpassed young men ineducational attainment.24

sp D ea

y w o t

Overall trends. Ohio workersunder age 35 experienced steep de-

clines in earnings (ater adjusting orination) over the last our decades.Te trends were most dramatic or theyoungest workers (ages 20 to 24 years),or whom median wages ell 42 percentsince 1969. Workers ages 25 to 29 ex-perienced a 27 percent decline in me-dian earnings during that time; thedrop was 17 percent or workers 30 to34. Earnings or 2008 do not show theull eects o the recession, which hit

young workers ages 20 to 29 the hard-est. Tis is despite the act that young workers today are more likely to have obtained acollege degree than young workers o a previous generation.25

Trends for Ohio compared to the nation. Although median earnings or young work-ers in Ohio were higher than median earnings nationally in 1969, that was no longer trueby 1989. Over the last decade, the incomes o workers under age 30 declined much moresteeply in Ohio than nationally (Figure 7).

Figure 5: Median Earnings of Workers Ages 20 to 29 inOhio and the U.S. by Race, 2008

$12,000

$17,000

$22,000

$27,000

$32,000

National

Ohio

AsianWhiteLatinoBlack

Source: U.S. Census Bureau, 2008, American Community Survey. Workersdefned as individuals who worked at least 40 weeks in the year.

Figure 6. Median Earnings of Young Ohio Workersby Gender and Age, 2008

MenWomen

30-2425-2920-24$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

Source: U.S. Census Bureau, 2008, American Community Survey. Workersdefned as individuals who worked at least 40 weeks in the year.


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Trends by education lev-el. Although the earnings o

workers with higher levels oeducation declined less steep-ly rom 1969 to 2008 than the

incomes o those with less ed-ucation, the earnings o all

workers ell during this timeperiod. Declines in earningsrange rom a 19 percent dropor college-educated work-ers ages 30 to 34 to a 49 per-cent decrease or workers ages20 to 24 without a high schooldiploma.

m ld

eda ad

y w ha

b had h

Trends for men with onlya high school diploma.

From 1969 to 2008, theearnings or Ohio men

with only a high schooldegree declined 42 per-cent or workers ages 20 to24, 33 percent or those 25to 29, and 29 percent or

workers 30 to 34 (Figure8). Te declines in earn-ings or women with only

a high school diploma weresubstantial but signifcant-ly lower than those or men, ranging rom 12 percent or women workers ages 30 to 34 to29 percent or women ages 20 to 24. O course, women started out earning ar less thansimilarly-educated men, and still earn less than men with comparable education.

Trends for the youngest workers. Regardless o education, race or gender, the trends inearnings are the worst or workers under age 24. Te earnings o Ohio workers ages 20 to24 declined 43 percent or men, 35 percent or women, 41 percent or whites and 35 per-cent or blacks.

Figure 7. Median Earnings of Workers Ages 20 to 34 Ohio and the U.S., 1969-2008 (2008 dollars)

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

30-34 Ohio

25-29 Ohio

20-24 Ohio

30-34 Nationa

25-29 Nation

20-24 Nationa

2008

1999

1989

1979

1969

Source: U.S. Census Bureau, Decennial Census 1960-99 and American CommSurvey 2008. Decennial Census analysis conducted by David Knox,Akron Be

Journal. Workers defned as individuals who worked at least 40 weeks in the y

Figure 8. Median Earnings for Young Men with a High ScDiploma in Ohio by Age, 1969-2008 (2008 dollars)

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$50,000

$55,000

30-

25-

20-

2008

1999

1989

1979

1969

Source: U.S. Census Bureau, Decennial Census 1969-99 and American CommuSurvey 2008. Workers defned as individuals who worked at least 40 weeks in the

Decennial Census analysis conducted by David Knox, Akron Beacon Journal.


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0

h ra up ad udp

Unemployment. Young workers in Ohio are ar more likely to be unemployed than mid-dle-aged or older workers, despite the act that young workers are signifcantly better edu-cated than their older counterparts (Figure 9).26 For 2008, the annual unemployment rate

or workers under age 24 in Ohio was 15 percentthe highest since 1985.27 Unemploy-ment has gotten worse or all groups, particularly or young people during 2009 and ear-ly 2010.

Underemployment. Te situa-tion acing young job seekers is evenmore troubling when taking under-employment into accountthe un-deremployed include workers who

want ull-time work but can fnd onlypart-time jobs, people who have giv-en up looking or work, and the un-employed. More than 23 percent o

workers under age 24 in Ohio wereunderemployed by the end o 2008.Both unemployment and underem-ployment worsened substantiallyduring 2009.28

Daa D

uza ra

Unionization can provide workers with better wages andbenefts, but a declining shareo Ohios workers are union-ized. Union coverage o 18- to35-year-olds declined 53 per-cent in the last 25 years. Work-ers ages 35 years and older expe-rienced a 47 percent decline inunion coverage during the sameperiod. Te 2008 unionizationrate among young workers (un-der age 35) in Ohio was a paltry10 percent (Figure 10).

Figure 9. Unemployment Rates in Ohio by Age, 2009

65 and

Over

55 to

64

45 to

54

35 to

44

25 to

34

20 to

24

16 to

19

22%

16%

12%

8% 9%7%

6%

Source: U.S. Census Bureau, Current Population Survey.

Figure 10. Union Coverage in Ohio by Age, 1983-2008

35 plus

18 to 34

Source: Economic Policy Institutes analysis o the Current Population Survey.


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Debt AnD Assets

As incomes have ailed to keep pace with rising costs, debt has become a generation-defningcharacteristic or todays young adults. Contrary to conventional wisdom, most debt accumulated

by young people is not the result o rivolous spending (although some o it undoubtedly is). Teproblem typically begins with student loan debt, which aects both community college and our-year students. Nationally, two-thirds o students borrow money to pay or college, and graduateshave an average o $23,000 in student debt (the average is slightly higher in Ohio). As tuition in-creases continue to outpace growth in amily income and ederal student loan limits, more youngpeople are turning to private loans that typically carry higher interest rates and less exible pay-ment options.

Beyond student loans, todays young adults are increasingly relying on credit cards to cover ba-sic living expenses, particularly during their frst years in the labor orce. Starting wages are o-ten inadequate to cover the rising costs o housing, transportation and health care while meeting

student loan obligations.

Although credit can serve as a necessary and critical lieline or adults o all ages, the problem oryoung adults comes with accumulating so much debt so early in adulthood. Te large proportiono uninsured young adults, coupled with inadequate coverage among those who do have healthinsurance, hurts young peoples health and puts them at high risk o getting into medical debt,urther limiting their ability to build assets. Recently passed health care reorm, however, will be-gin to address these problems.

Te challenge is to fnd solutions to help young people meet basic expenses or education and liv-ing in the short-run without threatening their ability to meet uture fnancial needs like support-

ing a amily, building assets and saving or retirement.

sd la ad cd cad a l

Student loans. o pay or their education, more than hal o students take out loans. Inacademic year 2007-08, 66 percent o our-year college graduates in Ohio had studentdebt. Te average amount o debt was $23,854, putting Ohio in 13th place in the nation inaverage student loan debt.29 In just one academic year, community college students tookout an average o $2,726 in ederal student loans (Figure 11). In addition to ederal loans,

Ohio students also rely on private loansin 2007-08, 14 percent o all undergraduates inthe nation had a private loan.30 Tis fgure likely understates reliance on private loans asmany students get such loans through their parents. Private loans generally have higherinterest rates and have ewer borrower protections.


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2

Figure 11. Federal Loans Taken by Ohios Public College and University Students,2006-07

Percentage of students Average loan per year

Community & technical colleges 37% $2,726

Four-year public regional campuses 49% $4,222

Four-year public main campuses 57% $5,763

Source: Ohio Board of Regents, Financial Aid Awarded to First-Time, Full-Time, Degree-Seeking Undergraduates in FY2006-07, March 2009.

Credit card debt. Although there is little state-specifc inormation about credit carddebt, the national fgures are cause or alarm. A recent national survey o low- and mid-dle-income households conducted by Dmos shows that in mid 2008, young adults (18to 34 years) nationally had an average o $9,111 in credit card debt. 31 Further, more col-lege students are relying on credit cards and carrying larger balances. In 2008, the aver-age credit card balance among undergraduates was $3,173. Median undergraduate cred-it card debt grew rom $946 in 2004 to $1,645 in 2008an increase o 74 percent in justour years.32

r a h ra i

Although housing prices are substantially lower in Ohio than on the east and west coasts,many young people still have to spend large portions o their income on housing, hamper-ing their ability to cover other expenses. In 2007, 18- to 24-year-olds spent 42 percent otheir income on rent and 25- to 34-year-olds spent 34 percent o income on rent.33 Acrossall age groups in Ohio, 45 percent o renters were housing-cost burdened in 2007thatis, they spent 30 percent or more o household income on rent and utilities.34

ma y Pp la ha ia

Te percent o young people who lack health insurance, in Ohio and nationally, is high.More than a fth o Ohios young people23 percent o adults under age 35were un-insured in 2008. But the problem is worse nationally, with 28 percent o young people un-insured. Ohio has higher rates o both employer-sponsored and public coverage than thenation as a whole (Figure 12). Older adults are much more likely than younger adults tohave health insurance. Ohio has taken a helpul step toward addressing this by includ-ing a provision in the last state budget bill to require insurers to allow some young adults

who dont have employer-provided health insurance to stay on their parents plans up toage 28.35 Recent ederal reormthe Health Care and Education Aordability Actwill


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make it much easier or people without employer-sponsored coverage, particularly thosewith low incomes, to obtain coverage. It also allows young adults up to age 26 to stay ontheir parents health plans. Tese provisions should signifcantly reduce the number o un-insured young Americans.

Figure 12. Health Insurance Coverage in Ohio and the U.S. by Age, 2008

Ohio U.S.

Insurance Status All NonelderlyAdults (under 65)

18- to 34-Year-Olds

18- to 34-Year-Olds

Uninsured 13.4% 22.7 % 27.8%

Private(employer/union, purchased directly,TRICARE/other military)

73.8% 66.2% 63.2%

Public

(Medicare, Medicaid/othergovernment assistance, VA)

16.5 % 12.6 % 10.4%

Source: U.S. Census Bureau, American Community Survey, 2008.

hd nd m opp bd A

It is not surprising that in Ohio, as in other states, stagnant household incomes have made it muchmore dicult or young people and amilies to accumulate savings and other assets. Tere is littlestate-specifc data on assets by age, but data or all households in Ohio provide some sense o thechallenges aced by young adults.

Asset poverty. A household is asset poor i it lacks sucient resources to subsist at thepoverty level (currently about $22,000 a year or a amily o our) or three months i it

were to lose its source o income. Over hal (54 percent) o Ohio households in the low-

er-income quintile (annual income o less than roughly $25,000) are asset poor. But evenamong middle-income amilies in Ohio (earning between roughly $45,000 to $69,000),20 percent are asset poor. Overall, rates o asset poverty in Ohio are similar to fgures na-tionally.36

Access to mainstream nancial services. More than a quarter o U.S. households areunbankedthat is, they do not have checking, savings or money market accounts. In2006, 29 percent o Ohio households were unbanked. Tis lack o access to mainstreamfnancial outlets makes amilies vulnerable because they are orced to rely on high-cost f-nancial service providers such as payday lenders.


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4

rAising A fAmily

Most parents with children under the age o six are in their late 20s or early 30s, making issues oamily leave, child care and workplace exibility o core concern to young adults. In Ohio, 39 per-

cent o household heads between the ages o 25 and 34 have a child under the age o six.37

Andnow, unlike a generation ago, a majority o women with preschool-age children are in the labororce. Nationally, 57 percent o women with a recent birth were in the labor orce in 200638 androughly two-thirds o mothers with a child under age six held a paid job.

odays young parents ace steeper fnancial challenges than their parents didthey are deeperin debt yet also pay a larger share o their incomes or housing, health care and child care. Childcare is one o the biggest expenses or young amilies, with average monthly ees or two childrenin care exceeding the median cost o rent in almost every state. 39

Most other countries treat children as a national resourcetomorrows workers, teachers and

leadersand thereore invest in their care. Te U.S. is one o the lone countries in the world thatdoes not provide some orm o paid parental leave to help parents temporarily exit the labor orceater the birth or adoption o a child. And despite the high cost o child care, especially or chil-dren below age fve, the U.S. provides amilies with little help. A very limited number o childcare subsidies are available through the states to low-income single mothers. Te ederal Childand Dependent Care ax Credit provides a small subsidy, with an average beneft o $529 or aamily with two children.40 But the credit is non-reundable, which means that the lowest-incomeamilieswho dont owe ederal taxesreceive no assistance rom this source. Most low- andmoderate-income amilies dont qualiy or any child care assistance at all.

Te high cost o raising a amily coupled with stagnant and declining wages, increased debt and

the high cost o housing and health care means that substantial numbers o young amilies aceconstant fnancial struggle. Well over 40 percent o the nations children are growing up in low-income amilies during their ormative years. Assisting amilies while their children are youngpays o in the uturestudies estimate that every dollar invested in high-quality early childhoodprograms yields roughly a seven dollar return in the uture by decreasing the need or remedialeducation and welare payments, improving health and reducing costs associated with crime.41

y w Pa nd Ada cd ca

In 2007, 64 percent o Ohio amilies with a child under age six had working parents, as did 70percent o amilies with a child older than six.42 In 2008, 76 percent o low-income children un-der age six in Ohio had an employed parent.43

Child care costs. In Ohio, as in other states, the cost o child care can be the largest ex-pense that amilies ace. Across the U.S., average child care ees in 2008 or an inant werehigher than the average amount amilies spent on ood. In the Midwest, the cost o havingtwo preschool childrenan inant and a our-year-oldin care was the highest monthlyexpense, exceeding housing costs (see Figure 13 or cost o child care in Ohio).44


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Figure 13. Average Annual Price of Full-Time Child Care in Ohio, 2008

Child Care Center Family Child Care Home

Infant, full-time $9,340 $7,106

4-year-old, full-time $7,384 $6,425

School-age child, part-time $6,459 $5,907

Source: Most Recent Child Care Data by State, National Association o Child Care Resource and Reerral Agencies.

Te average annual price o ull-time center-based care or two preschool-age children (an inantand a our-year-old) in Ohio is $16,724. For low- and middle-income amilies, this price tag isunaordable (Figure 14).

Figure 14. Average Annual Price of Full-Time Child Care for Two Preschool-AgeChildren in Ohio as a Percent of Income, 2008

Annual Family Income Child Care as Percentage of Income

Poverty-level, family of 4: $21,200 79%

Low-income, family of 4: $42,400* 39%

Middle-income, family of 4: $63,600-$84,800** 26%20%

* wice the federal poverty line. ** Tree to four times the federal poverty line.

Source: NACCRRA, Parents and the High Price o Child Care, 2009 Update.

Eects of budget crisis. Governor Strickland entered oce voicing a deep commitmentto assisting with child care and he ollowed through, increasing unding or child carequality and public preschool, among other services or children, in his frst budget. How-

ever, some o this unding came rom a surplus in ederal undsa surplus that evaporat-ed when the recession hit and needs increased. Despite shiting more state unds into ear-ly childhood, the net result in the 2010-2011 budget was an enormous cutan elimina-tion o the Early Learning Initiative (which was designed to provide child care and kin-dergarten preparation or low-income preschoolers), a reduction o reimbursement lev-els to providers, and an eligibility change that eliminated child care subsidies or amiliesearning between 151 percent and 200 percent o the ocial poverty level. Te budget orfscal years 2010 and 2011, passed in July 2009, reduced unding or early care and educa-tion in Ohio by $281 million.45


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6

o D n o Pad Paa la

Only three statesCaliornia, New Jersey and Washingtonhave enacted paid amilyleave policies that provide wage replacement to new parents who take time o rom em-ployment to care or and bond with a newborn baby or adopted child.46

na ha y cd a

g up l-i fa

In 2008, nearly hal(46 percent) o chil-dren under age 6 in Ohio lived in low-incomeamiliesdefned as having income below twicethe ederal poverty level, which in 2008 was$42,400 a year or a amily o our and $35,200

or a amily o three (Figure 15). Nationally, thefgure was 44 percent.

Trends. Over the last decade, the low-in-come rate or young children in Ohio droppedrom 43 percent in 1999 to 37 percent in 2002,only to sharply increase to 46 percent in 2008(Figure 16).

Figure 16. Percent of Children Under Age 6 in Ohio Living in Low-Income Families, 1999-2008

35%

40%

45%

50%

2008

2005

2002

1999

Source: National Center or Children in Poverty, 2009. Families and children are defned as low-income i the amily income is less than twice the ederal poverty threshold.

Figure 15. Children Under Age 6 inOhio by Family Income, 2008

100 - 200% FPL

Less than 100% FPLAbove low-income

54%

22%

24%

Source: National Center or Children in Poverty, OhioDemographic Profles.


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Education and low-income rates. Analarming 91 percent o young children in Ohio

whose parents do not have a high school degreelive in low-income amilies, as do 64 percent o

young children whose parents have a high school

degree but no college education. In comparison,31 percent o young children in Ohio with par-ents with at least some college credits (or more)live in low-income amilies. Tis reinorces theimportance o helping young adults get a collegedegree (Figure 17).

Figure 17. Young Children in Low-Income Families in Ohio, by

Parents Education, 2008

Some Collegeor MoreHigh School

Less ThanHigh School

91%

64%

31%

Source: National Center or Children in Poverty,Ohio Demographic Profles.


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8

Policy recommenDAtions

Ohio and the nation as a whole had a thriving middle class during the decades ollowing WorldWar IIand both can once again. What is needed is a bold policy agenda to renew the social

contract in ways that rebuild and create reliable pathways into the middle class or hard-workingAmericans. Te key to a new social contract with the next generation is a strong ederal rame-work that encourages and rewards innovative state action. ogether, state and ederal policy canrestore the economic opportunity and security that are the hallmarks o a robust middle class. Be-low we discuss some policies that could create opportunity or Ohios uture middle class.

Our immediate priority has to be urther relie rom the recession. Federal action during the win-ter o 2009 prevented a collapse o the U.S. banking system and provided essential fscal relie tothe states, pulling the U.S. back rom the brink o what many analysts eared could become a sec-ond Great Depression. Te Recovery Act substantially reduced growth in unemployment, gener-ating more than two million jobs and keeping unemployment rates about two percentage points

lower than they otherwise would have been.47 While last years relie enabled states to und ba-sics and avoid completely gutting their budgets, painul spending cuts were still necessary. Ohio

wont be able to und next years budget without additional ederal assistance. I states are orcedto make deeper spending cuts, they will have to lay o more workers and they will certainly notbe in a position to add jobs. More layos and spending cuts will gut public services and urthercurb amilies already compromised spending power. All o this would create a downward spiraland potentially erase the progress that has been made to date. In short, recession relie is the frstorder o businessand its a ederal responsibility.

Below we oer specifc policy recommendations, some ederal reorms and some state, someshort-term and some longer-term. Collectively, the goal o these recommendations is to reverse30 years o declining investments in the kinds o opportunities that are the heart o the Ameri-can Dream.

Pda eda

Ohio historically has had higher postsecondary tuition than the nation as a whole. But in recentyears, despite a tight state budget, Governor Strickland has prioritized education, holding downtuition increases; tuition increased less in Ohio than in any other state over the last three years.Due partly to that, community college attendance in Ohio went up 23 percent over that period,

and college and university attendance went up dramatically as well. Adequate preparation in highschool is key to postsecondary success, and Ohio also increased unding or K-12 during a tightbudget. Tis maintenance o eort on K-12 and higher education was largely because o the in-usion o unds rom the American Recovery and Reinvestment Act. But despite holding the lineon education spending, tuition remains higher in Ohio than elsewhere and need-based fnancialaid, which is essential or enabling low- and middle-income young people to aord college, hasbeen cut.

Te Healthcare and Education Aordability Act passed by Congress in March 2010 made a his-toric investment in need-based fnancial aid. It eliminated wasteul subsidies or private student


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lenders, creating savings o $61 billion over 10 years$36 billion o which will be invested inPell grants, the nations largest need-based grant program. o protect the purchasing power oPell grants, the maximum grant will be increased to $5,975 by 2017. Te recent legislation alsoincludes: changing the Income-Based Repayment program to limit monthly ederal student loanpayments to 10 percent (instead o 15 percent) o discretionary income or loans taken out ater

2014; $750 million in support or innovative programs supporting college access and completion;$2.55 billion over 10 years or Historically Black Colleges and Universities and Minority-ServingInstitutions; and $2 billion or community colleges to develop and improve educational or careertraining programs. Tese sizeable investments were originally part o a larger higher educationbill, the Student Aid and Fiscal Responsibility Act (SAFRA),which passed the U.S. House oRepresentatives in September 2009 but was not considered in its entirety in the Senate.

o ensure postsecondary success or Ohios young adults, especially those rom low- and moder-ate-income amilies, policymakers should:

Take action on components of SAFRA not included in the Healthcare and EducationAordability Act. For example:

Enact the American Graduation Initiative, which would invest more than $12billion in community colleges over the next 10 years.

Allocate $3 billion to the Access and Completion Fund to bolster college accessand completion support programs or students.

Increase access to the Perkins Loan program, a campus-based program thatprovides low-cost ederal student loans.

Keep interest rates low on need-based (subsidized) ederal student loans by

making the interest rates on these loans variable beginning in 2012.

Increase state investments in the higher education system. Te immediate priorityshould be to hold state tuition steady and restore need-based aid. uition at Ohios pub-lic colleges and universities continues to be quite high relative to other states. Ohio mustcontinue to hold tuition steady and restore our need-based aid, so that all Ohio students

who qualiy can have the chance to urther their education. As the state recovers rom thecurrent fscal crisis, it will be important to continue to invest in higher educationand toresist the national trend toward state disinvestment.

Make postsecondary education work for students. In addition to easing the fnancialburdens that impair student successincluding the need to work long hourshigher ed-ucation institutions, with support rom the state, should implement practices that bet-ter serve the needs o todays working students. Such practices include holding classes atnight and online, oering child care on campus and making student supports (such as thefnancial aid oce, student counselors, the library and the computer lab) available eve-nings and weekends. We must acknowledge the many responsibilities that young Ohio-ans juggle on their way to a degree, and put in place more supports so they can achievethat goal.


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0

ep ad ea

Ater a period o robust and sustained wage growth ater World War II, earnings stagnated inOhio and the nation as a whole, and they declined sharply or those with only a high school di-ploma. Ohio has lost much o its manuacturing sector and, with it, the unionized jobs that pro-

vided decent wages and good health and retirement benefts. Te rise o the service sector has re-placed some o the positions, but the new jobs dont bring the wages, benefts or security o lostmanuacturing jobs. Even beore the recession, unemployment and underemployment were high,leaving too many amilies struggling to pay the bills. What would help?

Create a national public jobs program. Federal fscal relie wont be enough to relievethe high unemployment rate, which is expected to remain high or at least the next cou-ple o years. Spending rom the Recovery Act targeted immediate need, improved Ohiosinrastructure, and put about 25,000 Ohioans back to work through direct public spend-ing. Many others have stayed employed because those 25,000 employees spend money asconsumers. Te Economic Policy Institute has called or spending an additional $120 bil-lion over the next three years to put more than a million unemployed Americans back to

work, fxing and enhancing our communities. Te national Apollo Alliance sketches out ablueprint to create jobs while also making America more energy ecient: upgrading ouroutdated electrical grid, weatherizing public buildings, supporting mass transit, and lend-ing or and publicly unding weatherization or homes and commercial buildings (whatPresident Obama and others have dubbed Cash or Caulkers). Tis kind o creative ed-eral policy will help us emerge rom a brutal recession with our inrastructure and peoplemore equipped to meet the uture.

Pass the federal Employee Free Choice Act (EFCA). EFCA will ease the path towardbetter jobs in which workers have a voice by strengthening penalties when employers re-use to negotiate a frst contract with their union or break other labor laws.

Reconstruct career ladders. In many growing feldshealth and education in partic-ularthere are both high numbers o low-wage jobs, shortages o workers prepared orbetter-compensated positions, and limited rungs between the two. Career ladder pro-grams are partnerships between employers, unions, educators and workers to help em-ployees move up in a company or industry. Governor Stricklands manuacturing certif-cate proposal represents an important new initiative to document the skills that employeeshave gained so that those skills can be tapped to add to Ohios productivity.

Build pathways into green jobs. Invest in models that emphasize exibility, so that youngworkers can easily move in and out o classroom-based training and employment as theyenter the workorce. A range o existing opportunities, including bridge or pre-appren-ticeships, apprenticeships, and community college programs, should be strengthened andexpanded to provide entry points or all workers. Te U.S. Department o Labor, Gover-nor Strickland, and the AFL-CIO have all begun putting in place changes and ideas tomake skills more portablerom manuacturing certifcates, to portable interim creden-tials, to a multi-crat core curriculum.


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D ad A

o help young adults accumulate assets, we must frst conront a new reality: or more and moreyoung people, transitioning to adulthood means amassing debt at a young age. As students andtheir amilies assume a greater share o college costs, student loan debt has soared. And then there

is credit card debt. Young adults are increasingly using credit cards to bridge the growing gap be-tween earnings and living expenses. wo actors have exacerbated the debt burden or young peo-pleprivate lenders commanding a larger share o the student loan market and deregulation ofnancial institutions, both o which increase the cost o credit to the consumer. Being mired indebt makes it dicult to save and build assets. Tanks to the Credit CARD (Credit Card Ac-countability, Responsibility and Disclosure) Act o 2009, new regulations that went into eectin February will better protect credit card holders. Te provisions include restrictions on interestrate increases, limits on ees, and a requirement that minors without earnings have a parent co-sign their credit card application.48 What urther steps could be taken to better protect consumersrom deceptive and abusive lending practices and to reduce the high cost o credit?

Create a national Consumer Financial Protection Agency (CFPA).A strong, indepen-dent CFPA would keep consumers sae rom toxic fnancial products. It would help curbthe lending industry excesses responsible or the dramatic rise in high-interest debt and,ultimately, or the fnancial meltdown and bailouts last all. A CFPA would close the gapthat currently leaves private lenders ree to make abusive loans to students without super-

vision or limits; it would require more disclosure and airer pricing.

Enforce the payday lending bill passed by the legislature and armed by Ohio voters.Ater research revealed that payday lenders were more plentiul than McDonalds, BurgerKing and Wendys restaurants combined and that they were charging 351 percent interest,

Ohio legislators passed a law limiting the annual interest rate or short-term loans to 28percent. Payday lenders tried to block the new law in a reerendum, but voters rearmedtheir desire to see these loans reined in. Since then, lenders have reorganized under a di-erent section o the law and continue their abusive practices. Ohios commerce depart-ment should step up to enorce the law, and legislators should simultaneously pass Rep-resentative Matt Lundys bill (HB 209), which would block the lenders end run aroundthe law passed last year.49

ra a fa

Everyone wants amilies to start o on the right ootor parents to be able to provide their chil-dren with what they need to thrive and succeed. But too oten, young parents are hindered byearnings that dont cover the bills, inexible workplaces, the inability to aord high-quality childcare, and being uninsured or underinsured. In addition to fnancial stability, young amilies needaccess to aordable health insurance, paid sick time and amily leave rom work. o better sup-port young amilies and improve childrens success, policymakers should:

Provide universal child care. Investing in high-quality, aordable child care and earlylearning opportunities helps children and amiliesand ultimately our nationto suc-ceed. Aordable care helps young parents make it fnancially, even though they are low on


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2

their career ladders. High-quality environments help inants and toddlers get the prep-aration they need to enter kindergarten ready to learn and excel. Good care also reduc-es costs down the road or remedial education, criminal justice and other expenses, whichincrease when children have been let unprepared. Finally, creating a cadre o preschoolteachers unded by the public sector adds a stable, socially benefcial source o middle-

class jobs while tapping into the talents o adults who want to work with children and en-rich our uture.

Support and expand national health insurance reform. Te Health Care and EducationAordability Act o 2010 will expand coverage to millions o Americans previously lack-ing health insurance. By providing aordable new insurance to millions o people, thislandmark legislation will help ensure that young people arent swamped by health costsas they pursue higher education and employment and start their own amilies. While thelegislation expands coverage to tens o millions o previously uninsured Americans, thereis more work to be done to create a truly universal, aordable healthcare system. Furtherreorms to control costs and cover the remaining uninsured Americans should be enactedto accomplish this goal.

Wed like to oer one fnal policy recommendation or Ohio: raise adequate revenue througha progressive, well-balanced state tax system. ax changes made in 2005 and implemented byboth parties have drastically reduced the revenue available to the state o Ohio to meet the needso people o all ages. Policy makers implemented across-the-board income tax cuts and replacedtwo major business taxes with a system designed to bring in much less, which then ailed to gen-erate even that lower orecast. Te corporate tax slashing is costing Ohio about $1.6 billion a year.Now the Republican candidate or governor is proposing elimination o the state income tax,

which currently brings in more than 45 percent o tax revenue in Ohios General Revenue Fund.

Not only should Ohio reject this problematic proposal, but policymakers should reverse the pre-vious income tax cuts and adjust the corporate tax system to bring in the level o revenue that itpreviously did. We cannot invest in Ohios young people and our uture middle class without ad-equate resources.


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e Federal Agenda:Future Middle Class

e Ohio Agenda:Future Middle Class

r rProvide scal relief to the states Lobby for federal scal relief and spend it

wisely

eda

Enact components of SAFRA not

included in the Healthcare and Education

Aordability Act

Hold college and community college tuition

steady

Increase need-based nancial aid

Increase state investments in the higher

education system

Support innovative programs that help

working students complete their credentials

ep ad ea

Create a national public jobs program

Pass the Employee Free Choice Act

Reconstruct career ladders

Build pathways into green jobs and union

jobs

D ad A

Create a Consumer Financial Protection

Agency

Enforce the payday lending law

ra a fa

Provide universal child care

Support and expand national health

insurance

Preserve the state income tax

Reverse previous income tax cuts

Re-adjust corporate taxes to create more

revenue


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4

enDnotes

1. Mishel, Lawrence, Jared Bernstein and Heidi Shierholz, Te State of Working America: 2008-2009,Economic Policy Institute, 2009, pages 125 and 361.

2. Knowledge Works Foundation, Ohios Education Matters KnowledgeWorks Foundation 2005 Poll,

October 2005.

3. U.S. Census Bureau, Ohio Educational Attainment of the Population, 1940-2000, http://www.census.gov/population/socdemo/education/phct41/OH.pd.

4. Tis indicator is based on parents educational levels and occupations and amily income.

5. National Center or Education Statistics, Condition of Education 2009, able 23-1: PostsecondaryExpectations o 12th-Graders, http://nces.ed.gov/programs/coe/2006/section3/table.asp?tableID=477.

6. National Center or Education Statistics, Condition of Education 2009, Indicator 10.

7. Te National Center or Public Policy and Higher Education,Measuring Up 2008, Ohio, http://nces.ed.gov/programs/coe/2009/section1/indicator10.asp.

8. Believ ing in Ohio, Governor ed Stricklands 2010 State o the State Highlights, www.governor.ohio.gov.

9. Te National Center or Public Policy and Higher Education,Measuring Up 2008, Ohio.

10. National Center or Higher Education Management Systems, www.higheredino.org.

11. Te Ohio Association o Educational Opportunity Personnel & Ohio College Access Network, State oCollege Opportunity in Ohio 2005, http://www.pellinstitute.org/pd/fnal_OH_college_access.pd.

12. National Center or Higher Education Management Systems, www.higheredino.org.

13. Measuring Up 2008, Ohio.

14. U.S. Census Bureau,American Community Survey 2008.

15. Ohio Board o Regents, Survey of Student Charges, http://regents.ohio.gov/hei/reports/dataseries.php.

16. Ohio Board o Regents, Survey of Student Charges, http://regents.ohio.gov/hei/reports/dataseries.html;Te College Board, rends in College Pricing.

17. Te National Center or Public Policy and Higher Education,Measuring Up 2008, Ohio. State, ederal,private and institutional grants are accounted or in this estimate.

18. Te Ohio College Opportunity Grant Program (OCOG) provides need-based tuition assistance toOhio residents in an associates or bachelors degree or nursing diploma program attending an eligibleinstitution. o be eligible, students must have an Expected Family Contribution (EFC) o $2190 or lesswith a maximum household income o $75,000; http://regents.ohio.gov/sgs/ocog.

19. Viany Orozco and Nancy K. Cauthen, Work Less, Study More & Succeed: How Financial Supports CanImprove Postsecondary Success, Dmos, 2009.

20. Department o Education, Integrated Postsecondary Data System (IPEDS).

21. Eric P. Bettinger and Bridget erry Long, Remediation at the Community College: StudentParticipation and Outcomes,New Directions for Community Colleges, no. 129, Spring 2005, Wiley

Periodicals, Inc.22. U.S. Census Bureau, Decennial Census 1960-99 andAmerican Community Survey 2008. Workers defned

as individuals who worked at least 40 weeks in the year. Decennial Census analysis conducted by DavidKnox,Akron Beacon Journal, http://www.ohio.com.

23. Economic Policy Institutes analysis o the Current Population Survey.

24. U.S. Census Bureau,American Community Survey 2008.

25. U.S. Census Bureau, Decennial Census 1960-99 andAmerican Community Survey 2008. Decennial Censusanalysis conducted by David Knox,Akron Beacon Journal, http://www.ohio.com.

26. Among Ohioans over age 65, 15 percent had a bachelors degree; among those between 45 and 64 yearsold, 24 percent had a bachelors degree. Te percent o young adults between 25 to 34 with a bachelorsdegree was 27 percent. U.S. Census Bureau,American Community Survey 2008.


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27. Amy Hanauer and Sapna Mehta, State of Working Ohio 2009, Policy Matters Ohio. http://www.policymattersohio.org/pd/SOWOPR2009.pd.

28. Amy Hanauer and Sapna Mehta, State of Working Ohio 2009, Policy Matters Ohio. http://www.policymattersohio.org/pd/SOWOPR2009.pd.

29. Student Debt and the Class of 2008, ICAS, Te Project on Student Debt, 2009, http://ticas.org/fles/pub/classo2008.pd.

30. Private Loans: Facts and rends, ICAS, Te Project on Student Debt, 2009, http://projectonstudentdebt.org/fles/pub/private_loan_acts_trends_09.pd.

31. Jos Garca & amara Draut, Te Plastic Safety Net: How Households Are Coping in a Fragile Economy ,Dmos, 2009.

32. How Undergraduate Students Use Credit Cards, Sallie Mae, 2009, www.SallieMae.com/CreditCardStudy.

33. American Community Survey 2008.

34. 2009-2010 Assets Opportunity Scorecard, CFED, http://scorecard.ced.org/housing.php?page=housing_cost_burden_renters.

35. National Conerence o State Legislators, Covering Young Adults Trough Teir Parents or GuardiansHealth Policy, http://www.ncsl.org/deault.aspx?tabid=14497.

36. 2009-10 Assets and Opportunity Scorecard, CFED, http://scorecard.ced.org/index.php.37. U.S. Census Bureau,American Community Survey 2008.

38. Jane Lawler Dye, Fertility of American Women: 2006; Current Population Reports, P20-558, U.S. CensusBureau, 2008.

39. National Association o Child Care Resource & Reerral Agency (NACCRRA), http://www.naccrra.org/policy/background_issues/working-mothers-need-child-care.

40. Tis fgure is or tax year 2005. Nancy K. Cauthen. Improving Work Supports: Closing the FinancialGap or Low-Wage Workers and their Families. Economic Policy Institute, Briefng paper #198, 2007.http://www.sharedprosperity.org/bp198.html.

41. Beneft-Cost Studies o Four Longitudinal Early Childhood Programs, http://www.docstoc.com/docs/26040316/Beneft-Cost-Studies-o-Four-Longitudinal-Early-Childhood-Programs.

42. Work-Family Profle o Ohio, 2007 General Legislative Session, Sloan Work and Family ResearchNetwork, http://wnetwork.bc.edu/documents/WorkFamily_Ohio.pd.

43. National Center or Children in Poverty, Ohio State Profle, Low-Income Young Children, http://nccp.org/profles/state_profle.php?state=OH&id=8.

44. Most Recent Child Care Data by State, National Association o Child Care Resource and ReerralAgencies. http://www.naccrra.org/randd/state_by_state_acts.php.

45. SFY 2010-2011 Budget SummaryEarly Care and Education, groundWork, 2009, http://www.groundworkohio.org. Many Early Learning Initiative (ELI) amilies were grandathered into the childcare system, but new amilies must be at or below 150 percent o poverty, rather than ELIs 200 percent.Te Ohio Department o Job and Family Services estimated that 4,500 children enrolled in ELI wouldenter kindergarten in the all o 2009, 7,500 would transer to subsidized child care, while as many as1,400 would no longer be eligible because their parents would not meet the work requirement.

46. Te policies adopted by Caliornia and New Jersey also provide paid leave or workers who temporarilyleave their jobs to care or a amily member who is seriously ill. Sarah Fass, Paid Leave in the States: ACritical Support for Low-Wage Workers and Teir Families, National Center or Children in Poverty, 2009,http://nccp.org/publications/pd/text_864.pd.

47. Eisenbrey, Ross, Te Recovery Act Worked, Economic Policy Institute, February 2010.

48. Summary o Te Credit Card Accountability Responsibility and Disclosure Act: Te CARD Act o2009, Senate Committee on Banking, Housing and Urban Aairs, May 19, 2009.

49. Plain Dealing, column by Sheryl Harris, Te Plain Dealer, September 29, 2009, http://www.cleveland.com/consumeraairs/index.ss/2009/09/ohio_legislature_slow_to_fx_p.html.


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