inequality amid job growth - policy matters ohio · 2018. 8. 31. · 10. employment-to-population...

State of Working Ohio 2018Inequality amid job growth

Work & WagesSeptember 3, 2018

Amy HanauerGrace Chu

STATE OF WORKING OH I O 2 018 // P OL I CYM ATTER S OHIO.ORGii

I. INTRODUCTION iii

II. BROKEN ECONOMY: INEQUALITY SOARS 11: Growing apart: Productivity growth no longer leads to compensation growth, 1948-2016 2

2: Productivity growth far exceeds compensation growth in Ohio and US, 1979-2016 2

3: Unshared economy: Share of all income growth captured by Ohio’s top 1% & bottom 99% 3

4: Share of all income captured by Ohio’s top 1% 3

III. WAGES: WEAK, BELOW PEAK, NOT EQUAL 45. Ohio wages: less than US, less than past. Median wages Ohio and US, 1979-2017 5

6. Ohio's 10 most common occupations pay poorly, 2017 6

7. Hourly wage growth, 1979-2017 6

8. Gender pay gap shrinking in Ohio, still more than $3 an hour 7

9. Racial wage gap in Ohio: Bad, getting worse, 1979-2017 7

IV. JOBS: GROWING SLOWLY 810. Employment-to-population ratio and labor force participation, Ohio, 1979-2017 9

11. Employment-to-population ratio, 2017, select groups 10

12. Percent job change, Jan 2000-July 2018 10

13. Prime-age employment-to-population ratio, Ohio, 2017 11

14. Men’s labor force participation way down, women’s stopped growing, Ohio, 2017 11

15. Ohio Jobs, January 2000-March 2018 12

16. Ohio job change by sector, January 2000-July 2018 12

17. Ohio’s key job sectors 13

18. Low unemployment, Ohio and U.S., 1979–2017 13

19. Unemployment by race 14

20. Low unemployment for men and women, 1979-2017 14

21. Workers without college degrees fall behind 15

22. More educated: Ohio education levels, 1979 and 2017 15

23. Education doesn’t make up for race and gender inequity, pooled years 2015-2017 16

24. Union premium, Ohio 2017 16

25. Unions raise wages for white, black, male & female Ohio workers, pooled years 2015-17 17

26. Uninsured rate halved after ACA: Share of Ohioans lacking health insurance, 2010-16 17

V. FINDINGS & FIXES: SUMMARY & RECOMMENDATIONS 18

ACKNOWLEDGMENTS 21

Contents

STATE OF WORKING OH I O 2 018 // P OL I CYM ATTER S OHIO.ORGiii

I. Introduction

STATE OF WORKING OH I O 2 018 // P OL I CYM ATTER S OHIO.ORGiv

I. Introduction

Ohio is now in the ninth year of a national economic expansion. At the federal level, $2.3 trillion tax cuts should have the economy broiling. But from our lack of wage growth, you wouldn’t know it. What gives?

The economy IS good, as measured by job growth and official unemployment. The national recovery has been slow and modest, but it has lasted for a very long time. Ohio’s recovery hasn’t been as strong or gone on as long as the nation’s, but even so, nine years is an awfully long time to be expanding. So why don’t people’s piggy banks feel heavier?

One big reason is that the federal tax cuts, despite ballooning the federal deficit, were not designed to create jobs or boost job quality, and, at the state and federal level, policymakers simultaneously did much to undermine typical families.

Federal and state policy have, aside from expanding health care, reduced many protections for working people. Congress let the minimum wage lose ground. The Trump administration revoked overtime rule updates which would have let more workers get paid overtime when they worked more than 40 hours a week. The Supreme Court ruled to forbid unions from collecting fees that enable them to function, while still requiring unions to represent workers who refuse to contribute to union costs. And both President Trump and Congress spent much of the last two years trying unsuccessfully to get rid of the Affordable Care Act which has helped nearly a million Ohioans get health insurance.

In Ohio, there have been some helpful policy developments, but retrenchment in other ways. The Affordable Care Act and Governor John Kasich’s

acceptance of Medicaid expansion meant strong increases in insurance coverage that continue to benefit Ohioans. Our minimum wage is a bit above the nation’s. And when Ohio lawmakers made public sector collective bargaining illegal in 2011, Ohioans used the people’s veto to restore that right. Yet over the last decade lawmakers have also blocked unionization efforts for childcare and home care workers, disinvested from work supports and local government, made it harder to afford higher education, and failed to address declining job quality.

In the past when unemployment was this low, working people saw more raises—in the late 1990s the share of national income going to paychecks was a full three percentage points higher than it is today, according to economist Jared Bernstein. Low unemployment is great news—for someone once jobless who now has a job, life is surely better. But persistent low wages, particularly in Ohio, signal a squandered recovery.

A good economy should work for all of us. A business cycle that lasts this long in an upswing is a rare gift. It is a deep shame to squander the peak of a recovery with policies that are so determined to send so much of America’s wealth to the wealthiest.

This 2018 edition of the State of Working Ohio uses the best and most recent data available to try to understand what is happening to workers in Ohio. In this time when working people have become much more educated and productive, this report sheds light on how the economy is working for workers. We conclude with recommendations to enable more broadly shared prosperity. We can afford these changes and we know what they are. Will this be the year we find the will to bring them about?

1 https://nyti.ms/2BsxLGp

https://nyti.ms/2BsxLGp

STATE OF WORKING OH I O 2 018 // P OL I CYM ATTER S OHIO.ORG1

II. Broken economy: Inequality soars


II. BROKEN ECONOMY: INEQUALITY SOARS

Finding: In the middle of the 20th century, from the post-World War II period in 1948 through the mid-1970s, worker compensation grew right alongside productivity, with average hourly compensation (wages and benefits) of production and non-supervisory workers nearly doubling (91.3 percent growth) and net hourly productivity doing the same (96.7 percent growth). Since that time, productivity nearly doubled again, while compensation edged upward only slightly. If you examine the whole period, 1948-2016, you see productivity levels nationally that have spiked by 250 percent while compensation grew over that entire 68-year period by only 115 percent, nearly all of that in the previously-referenced mid-20th century.

Figure 1Growing apart: Productivity growth no longer leads to compensation growth

US productivity vs. compensation growth, 1948-2016

91.30%

115.10%96.70%

241.80%

0%

50%

100%

150%

200%

250%

300%

194

8

1950

1952

1954

1956

1958

196

0

196

2

196

4

196

6

196

8

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

199

0

199

2

199

4

199

6

199

8

200

0

200

2

200

4

200

6

200

8

2010

2012

2014

2016

Hourly compensation

Net productivity

Source: Economic Policy Institute (EPI) State of Working America Data Library at https://www.epi.org/data/#?subject=prodpay. Uses data from Bureau of Labor Statistics (BLS) and Bureau of Economic Analysis (BEA), State/National Income & Product Accounts (NIPA) public data series. Cumulative change in net productivity (growth of output of goods & services less depreciation per hour worked) of total economy. Real average hourly compensation of private sector product/non-supervisory workers, 1948-2017. Latest data available.

Finding: From 1979 to 2016, productivity grew by 72.4 percent nationally and by 66.5 percent in Ohio, cumulatively. Compensation rose by only 14.1 percent nationally and edged up by a meager 3.8 percent in Ohio after accounting for inflation. Workers are much more productive, companies are much more profitable, but inflation-adjusted pay is essentially stagnant.

Figure 2Productivity growth far exceeds compensation growth in Ohio and US,

1979-2016

66.5%

3.8%

72.4%

14.1%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

197

9

198

1

198

3

198

5

198

7

198

9

199

1

199

3

199

5

199

7

199

9

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

Ohio productivity

Ohio hourly compensation

U.S. productivity

U.S. hourly compensation

Source: EPI analysis of data from BLS, Labor Productivity and costs program; Current Population Survey, and BEA State NIPA public data series. Changes cumulative. Latest data available. We could produce Ohio data only since 1979, where this chart begins. Chart ends in 2016. Inflation adjusted.


Finding: Income inequality has risen in Ohio since the 1970s, as it has in every other state. The current level of income inequality stands in contrast to the mid-20th century’s more shared prosperity. Between 1945 and 1973, the wealthiest 1 percent of Ohio households captured about 4 percent of total income growth. Compare that to the explosion in top-tier wealth between 1973 and 2015: During that period, Ohio’s wealthiest seized a whopping 86 percent of all pre-tax income growth (excludes Social Security and other transfers).

BROKEN ECONOMY: INEQUALITY SOARS

Figure 3Unshared economy: Share of all income growth captured by

Ohio’s top 1% & bottom 99%

4%

96%

1945-1973

Top 1%

Bottom 99%

Source: Sommeiller, Estelle, and Mark Price. 2018. The New Gilded Age: Income Inequality in the U.S. by State, Metropolitan Area, and County. Economic Policy Institute, July 2018. First published locally in Unfair Share: Ohio’s wealthiest pull further away by Ben Stein, July 2018, Policy Matters Ohio, https://bit.ly/2NDesLB

86%

14%1973-2015

Top 1%

Bottom 99%

Figure 4Share of all income captured by Ohio’s top 1%

192820.5%

19747.4%

201515.8%

0.0

5.0

10.0

15.0

20.0

25.0

1917 1924 1931 1938 1945 1952 1959 1966 1973 1980 1987 1994 2001 2008 2015

Source: Sommeiller and Price. 2018. The new gilded age. EPI and Unfair Share https://bit.ly/2NDesLB

Finding: Ohio’s wealthiest 1 percent of households took home 15.8 percent of all earned income in the state in 2015. That is more than twice the share captured by the top percentile in 1974, and within five percentage points of the share they were taking just before the onset of the Great Depression.

https://www.epi.org/147963/pre/8c46ec847fa9848854e8f3ef3c720acf04f6aa508ed8bde8c3102508a3201dfe/#epi-toc-10

https://www.epi.org/147963/pre/8c46ec847fa9848854e8f3ef3c720acf04f6aa508ed8bde8c3102508a3201dfe/#epi-toc-10

https://bit.ly/2NDesLB

https://bit.ly/2NDesLB


II. Wages: Weak, below peak, not equal


III. WAGES: WEAK, BELOW PEAK, NOT EQUAL

Finding: The median wage is the wage earned by the worker at the midpoint – half of workers earn more and

half earn less than this. Inflation-adjusted median wages rose very slowly between 2016 and 2017 in Ohio and

nationally, despite low unemployment. In Ohio, the 2017 median wage was just $17.79 an hour, up just four cents

an hour from the previous year when adjusted for inflation. This was nearly 50 cents less than the national median

wage of $18.28 an hour, and more than 40 cents less than Ohio’s median wage was in 1979 when we begin this

series. Growth was faster in other years of this decade: when adjusted for inflation, median wages grew by

more than 3 percent between 2015 and 2016 and between 2014 and 2015. Last year, by contrast, median wage

growth was just 0.2 percent. Despite the two decent years leading up to 2015 and 2016, wage growth in Ohio has

generally been weak with the exception of a strong run in the late 1990s, and plunges during downturns have

been steep, leading to Ohio’s current median wage being stuck below recent peaks and below its level in 1979.

Nationally, wages actually fell in the most recent quarter.

Figure 5

Ohio wages: less than US, less than past. Median wages Ohio and US, 1979-2017

$18.22

$16.06

$17.96

$16.47

$17.79

$16.71$16.11

$18.25

$17.41

$18.28

$14.50

$15.00

$15.50

$16.00

$16.50

$17.00

$17.50

$18.00

$18.50

1979 19

8119

8319

8519

8719

89 1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

OhioUnited States

Source: EPI analysis of CPS data, adjusted to 2017 dollars


Finding: Many of Ohio’s jobs offer very low median wages. Of the 10 most common occupations in the state,

three pay less than the official three-person poverty line and nine pay less than twice the poverty line for that size

family, even with full-time year-round work. In hourly wages, just two pay more than $15 an hour at the median.

This in a nutshell explains the challenge in the Ohio economy: the most common jobs are generally not family-

sustaining.

WAGES: WEAK, BELOW PEAK, NOT EQUAL

6

Figure 5

Ohio wages: less than US, less than past. Median wages Ohio and US, 1979-2017


Finding: Many of Ohio’s jobs offer very low median wages. Of the ten most common occupations in the state, three pay less than the official three-person poverty line and nine pay less than twice the poverty line for that size family, even with full-time year-round work. In hourly wages, just two pay more than $15 an hour at the median. This in a nutshell explains the challenge in the Ohio economy – the most common jobs are generally not family-sustaining.

Figure 6 Ohio's 10 most common occupations pay poorly, 2017

Job Title Total Ohio Jobs

Median Hourly Wage

Median Annual Salary

Salary as share of 3-

person poverty line

Salary as share of 200% of poverty

Food Preparation and Serving 158,070 $9.21 $19,150 92% 46% Retail Salespersons 152,410 $10.67 $22,190 107% 53% Registered Nurses 124,620 $30.43 $63,300 305% 152% Cashiers 119,860 $9.31 $19,360 93% 47% Laborers, Freight, Stock, Material Movers-hand 111,410 $12.92 $26,880 129% 65% Office Clerks, General 100,760 $14.88 $30,940 149% 74% Waiters and Waitresses 96,160 $9.25 $19,240 93% 46% Customer Service Reps 90,090 $15.50 $32,240 155% 78% Janitors and Cleaners 83,560 $11.50 $23,920 115% 58% Stock Clerks and Order Fillers 83,430 $11.56 $24,040 116% 58%

Total 1,120,370

Source: Bureau of Labor Statistics, Occupational Employment Statistics, 2017 data

$18.22

$16.06

$17.96

$16.47

$17.79

$16.71$16.11

$18.25

$17.41

$18.28

$14.50

$15.00

$15.50

$16.00

$16.50

$17.00

$17.50

$18.00

$18.50

1979 19

8119

8319

8519

8719

89 1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

OhioUnited States

Finding: Even among the bottom 90 percent, wage growth is not equally distributed. Since 1979, workers toward

the top of the income spectrum have captured most of the wage growth in Ohio. Ninetieth percentile workers—

those earning more than 90 percent of other employees, earn about $6.91 more each hour than they did in 1979,

while workers at the median and below all earn less when adjusted for inflation.

Figure 7Hourly wage growth, 1979-2017

-$0.07 -$0.10 -$0.34 -$0.58 -$0.43

$0.25$1.13

$2.46

$6.91

-$1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00

10th

pe

rcen

tile

20

th p

erc

entl

e

30

th p

erc

enti

le

40

th p

erce

nti

le

50

th p

erc

enti

le(M

ed

ian

)

60

th p

erc

en

tile

70

th p

erc

enti

le

80

th p

erc

en

tile

90

th p

erc

en

tile



Finding: Women continue to earn less

than men in Ohio, although in 2017

women’s median wages rose slightly

(from $15.85 to $16.15) while men’s slid

a bit (from $19.38 to $19.29). Still, men

earn more than $3.00 more each hour

than women do, translating to more than

a $6,500 difference with full-time year-

round work. This disparity has improved

dramatically over the nearly 40 years of

this analysis, due both to rising women’s

wages and shrinking men’s wages at the

median, when adjusted for inflation.

Figure 8Gender pay gap shrinking in Ohio, still more than $3 an hour

$22.04$21.24

$18.11

$19.29

$13.32 $13.25

$15.94

$16.15

$10

$12

$14

$16

$18

$20

$22

$24

1979 19

8119

8319

8519

8719

89 1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

Male Female


WAGES: WEAK, BELOW PEAK, NOT EQUAL

Finding: Black workers’ wages lag far behind those of white workers at the median in Ohio and the gap has grown

much worse over time. Black workers earned just $13.96 at the median in Ohio in 2017, compared to $18.57 for

white workers, a gap of more than $4.60 each hour, translating into more than $9,500 less each year with full-time

year-round work. Black workers’

median wage actually fell slightly

between 2016 and 2017 in Ohio,

despite the good economy. This

may be partly the result of pulling

the most disadvantaged workers

into jobs—when previously excluded

workers are finally permitted into

the labor force they tend to start at

low wages, pulling down medians.

Because the sample of black workers

is smaller than that of white workers

in Ohio, the data jumps around a bit

more, but the trend is clear. White

workers earn much more at the

median and the story has gotten

worse, not better.

Figure 9

Racial wage gap in Ohio: Bad, getting worse, 1979-2017

$16.96$16.30

$13.72 $13.96

$18.33

$16.28

$18.43 $18.57

$12

$13

$14

$15

$16

$17

$18

$19

1979 19

8119

8319

8519

8719

89 1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

African American White



IV. Jobs: Growing slowly


IV: JOBS: GROWING SLOWLY

Finding: For the entire period between 1979 and 2012, Ohio labor force participation was higher than it is today,

though there’s been a slight uptick over the past few years, to 63.0 percent in 2017, up from a modern low of 62.3

percent in 2015. The share of Ohioans that is employed (the employment-to-population ratio) remains below the

level at any point between 1987 and 2008, and well below its recent peak of 64.6 percent in 2001. It too improved

modestly between 2013 and 2017. Despite low unemployment rates, both measures of how well Ohio’s labor

market is pulling everyone in are worse than they’ve been in all but a handful of the years since our dataset tracks

this, starting in 1979. Unemployment is very low, a good thing. But, it is masking the fact that too many Ohioans

are still not working.

Figure 10

Employment-to-population ratio and labor force participation, Ohio, 1979-2017

60.1%

55.9%

62.0%

61.2%

64.6%64.0%

58.2%

59.8%

63.9%

63.5%

66.6%

67.8%

62.3%

63.0%

55%

57%

59%

61%

63%

65%

67%

69%

1979 19

8119

8319

8519

8719

89 1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

Employment to population ratio Labor force participation

Source: EPI analysis of CPS data


Finding: The reasons that Ohio workers are not all back in the labor force are complex. But chief among them

is that Ohio still had fewer jobs by July 2018 than it had prior to the 2000 recession, in January 2000. This is in

contrast to the United States, which has added 13.83 percent to its job base since that time.

Figure 12Percent job change, Jan 2000-July 2018

13.83%

-0.08%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

United States Ohio

Source: EPI Analysis of CES data, total nonfarm jobs, seasonally adjusted numbers Jan 2000-July 2018

JOBS: GROWING SLOWLY

Finding: Men, prime-age workers, Asian-American and Hispanic workers, and those with a BA or more are all more

likely to be employed than other demographic groups. Less than one in three of those with less than a high school

degree was working in Ohio in 2017.

Figure 11Employment-to-population ratio, 2017, select groups

65.0%55.0% 56.9%

78.6%

37.4%

60.2%53.5%

66.4% 67.6%

32.5%

55.0%64.5%

74.0%

Male

Female

16-24

yrs

25-5

4 yrs

55 yr

s and

olde

r

Whit

e

Africa

n-Amer

ican

Hispan

ic

Asian/

Pacif

ic Isl

ande

r

Less

than

high

scho

ol

High Sc

hool

Some c

olleg

e

Bach

elor's

or hi

gher



Finding: Women’s labor force participation climbed steadily throughout the 1980s and ‘90s before hitting a peak

of 62.4 percent in 2008. After that the rate fell sharply and has stayed low, at just 57.7 percent by the end of

2017, up slightly over that calendar

year from 57.2 percent. Male labor

force participation, in contrast, fell

in most years of our analysis and

was 68.6 percent by the end of 2017,

up slightly over the previous year,

but down more than 10 percentage

points from its peak of 79.6 percent

in 1979.

Finding: Some analysts argue that the reason for lower employment as a share of population in Ohio is our aging

state. In fact, even when you control for age, employment levels remain below their peak for prime-age (25-54

years) Ohio workers—albeit far better than in some recent years. During the peak year of employment, 1999, 82

percent of prime-age Ohioans were employed. In 2017, just 78.6 percent of prime-age Ohioans were working.

Figure 13Prime-age employment-to-population ratio, Ohio, 2017

73.6%

70.6%

82.0%

78.6%

68%

70%

72%

74%

76%

78%

80%

82%

84%

197

9

198

1

198

3

198

5

198

7

198

9

199

1

199

3

199

5

199

7

199

9

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

20

17

Source: EPI analysis of CPS data, workers age 25-54


Figure 14Men’s labor force participation way down, women’s stopped growing,

Ohio, 2017

79.6%

68.6%

49.8%

62.4%

57.7%

40%

45%

50%

55%

60%

65%

70%

75%

80%

85%

197

9

198

1

198

3

198

5

198

7

198

9

199

1

199

3

199

5

199

7

199

9

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

20

17

Male Female



Finding: Since 2000, nearly

all of the jobs created in

Ohio’s economy are in health

services, professional and

business services, and leisure

and hospitality. Manufacturing,

the sector called “trade,

transportation and utilities,”

information, construction and

mining have all lost substantial

numbers of jobs since 2000—

manufacturing in particular is still

down more than 328,000 jobs.

This calendar year has been a

good one for manufacturing but

it still lags far behind where it was

in 2000 (which already followed

decades of decline).

Figure 16Ohio job change by sector, January 2000-July 2018

-328,300

-77,400

-22,100

6,200 6,200

89,100 94,100

264,200

-400,000

-300,000

-200,000

-100,000

00,000

100,000

200,000

300,000

Manufa

ctur

ing

Trad

e, tra

ns, u

tility

Con

stru

ction

Finan

cial s

ecto

r

Gover

nmen

t

Prof

& bu

s ser

vice

Leisu

re &

hosp

ital it

y

Educ

ation

& h

ealth

Source: EPI analysis of CES data, monthly seasonally adjusted, January 2000-March 2018


Finding: Ohio has been slowly adding jobs since February 2010 at a modest growth rate. By July 2018 there were

5.616 million jobs in Ohio, higher than at the start of either of the last two recessions (March 2001 and December

2007). This is an important accomplishment. Job levels remain lower than at their peak in May 2000. Economies

should be adding jobs throughout expansions and should much more quickly replace jobs lost in previous

recessions, but the long, slow, steady growth has finally brought us to nearly positive territory.

Figure 15Ohio Jobs, January 2000-March 2018

May-00, 5,636,600

Feb-01, 5,599,200

Dec-07, 5,418,100

Feb-10, 5,002,600

Jul-18, 5,616,100

4,600,000

4,800,000

5,000,000

5,200,000

5,400,000

5,600,000

5,800,000

Jan-

00

Aug

-00

Mar

-01

Oct

-01

May

-02

De

c-0

2

Jul-

03

Feb

-04

Sep-

04

Apr

-05

Nov

-05

Jun-

06

Jan-

07

Aug

-07

Mar

-08

Oct

-08

May

-09

De

c-0

9

Jul-

10

Feb

-11

Sep-

11

Apr

-12

Nov

-12

Jun-

13

Jan-

14

Aug

-14

Mar

-15

Oct

-15

May

-16

De

c-16

Jul-

17

Feb

-18

Source: EPI analysis of CES data, monthly average, total nonfarm jobs, seasonally adjusted, Jan 2000-July 2018


Finding: The official unemployment rate was extremely low in Ohio (5.0 percent) and the U.S. (4.4 percent) in

2017. The Ohio rate was 4.9 percent in July. This is excellent. Some caveats: unemployment this low should push

wages upward—that is not yet happening in Ohio or in the country. Unemployment is much higher in certain

communities, including for African Americans and in many rural counties. Finally, low official unemployment

doesn’t capture those who have left the labor market—labor force participation remains depressed in Ohio.

Finding: Despite the big loss in manufacturing and the

sector that includes trade, transportation and utilities,

these jobs remain important in our economy, making

up 12 percent and 19 percent, respectively, of Ohio jobs.

Education and health services (17 percent), business and

professional services (13 percent), leisure and hospitality

(10 percent) and government (14 percent) are other large

employment sectors.

Figure 17Ohio’s key job sectors

Mining 0%

Construction4%

Manufacturing12%

Trade Transportation

and Utilities19%

Information1%Financial

Activities6%

Prof & Bus Serv13%

Education and Health Services

17%

Leisure and Hospitality

10%

Other Services4%

Government14%

Source: EPI analysis of CES data, 2017


Figure 18Low unemployment, Ohio and US, 1979–2017

12.4%

10.3%

5.0%5.9%

9.7%

7.5%

4.0%4.4%

0%

2%

4%

6%

8%

10%

12%

14%

1979 19

8119

8319

8519

8719

89 1991

1993

1995

1997

1999

2001

2003

2005

2007

2009 20

1120

1320

1520

17

Ohio USA

Source: EPI analysis of CPS Data. 1979 through 2017, annual numbers


Finding: Official unemployment was

quite low in Ohio for both men (5.3

percent) and women (4.7 percent) in

2017—not quite as low as in the late

1990s but lower than at almost any

other time in the past 39 years.

Figure 20Low unemployment for men and women, 1979-2017

4.9%

13.2%

7.9%

3.9%

11.8%

5.3%7.3%

11.2%

6.7%4.2%

8.6%

4.7%

0%

2%

4%

6%

8%

10%

12%

14%

1979

198

1

198

3

198

5

198

7

198

9

199

1

199

3

199

5

199

7

199

9

200

1

200

3

200

5

200

7

200

9

2011

2013

2015

2017

Male Female

Source: Economic Policy Institute analysis of Current Population Survey data


Finding: The good news about statewide overall unemployment obscures the fact that unemployment rates in

the black community (9.4 percent) in Ohio were more than double those facing white workers (4.2 percent) in

2017. The 9.4 percent level would be considered recession territory if it was faced by all workers. African-American

workers are more likely to lose work during downturns. When the labor market gets very tight, employers are

forced to turn to workers that they might otherwise pass over because of bias, including black workers. While

unemployment levels remain inequitable, unemployment for black Ohioans was lower in 2017 than at any time

since 2001, clearly a positive development.

Figure 19Unemployment by race

10.9%

3.8%

7.6%

4.2%

25.6%

7.4%

17.0%

9.4%

0%

5%

10%

15%

20%

25%

30%

19791981

19831985

19871989

19911993

19951997

19992001

20032005

20072009

20112013

20152017

White African-American



Finding: Ohioans are substantially more educated than they used to be. The share of adults over age 25 without a

high school degree in 2017 was less than half (10.5 percent) what it was in 1979 (24.4 percent). The share with at

least a high school degree correspondingly

shot up from just 75.7 percent in 1979 to

89.5 percent by last year. And, despite

the enormous and growing cost of higher

education, the share with a BA or more

has jumped 12 percentage points, from

14.7 percent in 1979 to 26.7 percent in

2017. Still, Ohio is lagging other states.

We ranked 25th among states in high

school graduation attainment, 37th among

states in BA attainment and 30th among

states in post-graduate education in 2011-

15 American Community Survey 5-year

estimates.

Finding: Higher education completion secures higher wages in Ohio, and this is truer than it used to be. Workers

with a BA earned $26.30 an hour in 2017, more than 10 dollars more each hour than any other educational

category. This equates to more than $21,000 more each year with full-time work. Since 1979, median wages have

declined in inflation-adjusted terms

for workers of all education levels

except for the minority of workers

with college degrees or more.

Inflation-adjusted median wages

fell from $15.64 in 1979 to just

$10.35 an hour in 2017 for those

who haven’t finished high school,

from $16.00 to $15.02 for those

with just a high school diploma,

and from $16.75 to $15.93 for

those with some college (either an

associate’s degree or an incomplete

BA). For those with at least a

college degree, median hourly

inflation-adjusted wages rose from

$21.38 to $26.30 over that period.

Figure 21Workers without college degrees fall behind

$15.64

$9.76 $10.35

$16.00

$15.02

$16.75

$15.93

$21.38

$28.16 $26.30

$0

$5

$10

$15

$20

$25

$30

197

9

198

1

198

3

198

5

198

7

198

9

199

1

199

3

199

5

199

7

199

9

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

20

17

Less than high school High school Some college Bachelor's or higher



Figure 22More educated: Ohio education levels, 1979 and 2017

24.4%

75.7%

14.7%10.5%

89.5%

26.7%

0%

20%

40%

60%

80%

100%

No HS degree HS or more BA or more

1979 2017

Source: 2017 data: US Census bureau quick facts https://bit.ly/2nKqurB, 1979 data: Current Population Survey

https://bit.ly/2nKqurB


Finding: Union workers continued to out-earn non-

union workers at the median in 2017. The median

union worker earned $21.76 an hour that year,

compared to $16.98 an hour for non-union workers,

a difference of more than $4.75 an hour or more

than 28 percent. With full-time, year-round work,

this equates to more than $9,900 a year. Unionized

workers are also more likely to get retirement

benefits, health benefits, and overtime pay.

Figure 24Union premium, Ohio 2017

$21.76

$16.98

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

Union Non-Union



Finding: While increased education raises wages for black, white, male and female workers, black workers and

women still face inequitable wages compared to white workers and men, even when they have the same education

levels. For example, white workers with just a high school degree earned more than black workers with some

college, and men with just a high school degree earned substantially more than women with some college. White

workers with Bachelor’s degrees earned more than $4 more each hour than black workers with a BA and men with

a BA earned more than $4 more each hour than women with a BA at the median in 2017. These differences equate

to more than $9,000 a year with full-time, year-round work.

Figure 23Education doesn’t make up for race and gender inequity,

pooled years 2015-2017

$11.00 $12.26

$10.00

$12.26

$9.19

$17.00

$13.00

$16.21

$13.64

$17.40

$14.81

$26.00

$21.63

$28.85

$24.00

$-

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

White workers Black workers Men Women

Less than HS HS only Some college BA or more

Source: Economic Policy Institute analysis of Current Population Survey data, data pooled 2015-2017 to increase sample size. Insufficient numbers of black workers without a high school degree to include. Insufficient numbers of Hispanic and other workers to include at state level. When we pool several years of data, we have to also inflate the older year numbers to current dollars. Since wage growth has been below inflation in some recent years, this can lead to wages that look higher on pooled data. This data is most useful for comparing how different workers do, while larger data sets are better for understanding actual overall median wages.


Finding: In the wake of the Affordable Care Act,

Governor Kasich opted to expand Medicaid in

Ohio, paid for largely by the federal government.

This led to a substantial increase in health

insurance coverage for Ohioans. While 12.3

percent of Ohioans were uninsured in 2010,

prior to enforcement of the ACA, by 2016

just 5.6 percent of Ohioans lacked insurance.

This represents tremendous progress, but it

is threatened by attempts to repeal or erect

barriers to receiving Medicaid in Ohio.

Finding: White, black, male and female workers all earn substantially more when they are in a union in comparison

to non-unionized workers of the same race or gender. However, white workers and men in unions earn more than

unionized black or female workers.

White and male workers may be

in different unionized occupations

than black and female workers—

for example, white men are far

more likely to be in the highly-paid

building trades unions, while black

workers and women are more likely

to be in service sector or public

sector union jobs. Black workers are

more likely to be unionized in Ohio at

13 percent in 2016, compared to 10.5

percent for white workers, according

to the CPS.

Figure 25Unions raise wages for white, black, male and female Ohio workers,

pooled years 2015-17

$22.17

$15.85 **

$22.50 $20.00

$17.95

$13.28

$18.50

$15.38

$-

$5.00

$10.00

$15.00

$20.00

$25.00

White workers Black workers Men Women

Union Non-union

Source: EPI analysis of CPS pooled data, 2015-2017. **NOTE; sample size for non-unionized black men (74) is below the sample we normally require (100). African Americans are more likely to be in a union than white Ohioans but because they are a smaller share of the Ohio population, sample size remained inadequate and this number is somewhat less reliable than other numbers in this figure. Numbers of Hispanic and other ethnicity workers were also insufficient to include. When we pool several years of data, we have to also inflate the older year numbers to current dollars. Since wage growth has been below inflation in some recent years, this can lead to wages that look higher on pooled data. This data is most useful for comparing how different workers do, while larger data sets are better for understanding actual overall median wages.

Figure 26Uninsured rate halved after Affordable Care Act:

Share of Ohioans lacking health insurance, 2010-2016

12.3%11.5%

8.4%

5.6%

0%

2%

4%

6%

8%

10%

12%

14%

2010 2012 2014 2016

Source: American Community Survey, US Census, https://bit.ly/2whOUwy


https://bit.ly/2whOUwy


Findings & Fixes: Summary & Recommendations


To summarize: What we find, in 2018, is that

unemployment is finally low in year nine of a long,

slow recovery in Ohio. We’ve also finally gotten

within throwing distance of restoring the jobs we

had prior to the 2000 recession (we’ve surpassed

the jobs at the start of the official recession in March

2001 but not the all-time peak jobs, in May 2000).

But labor force participation is still suppressed.

Further, despite what should be a roaring economy,

wages are simply not doing more than creeping

up—in fact wage growth was almost non-existent

in 2017, after better growth in 2015 and 2016, and

there is reason to think it may have slowed further

in 2018—it has nationally. Inequality is growing and

the very wealthiest are capturing almost all growth

in the economy, nationally and in Ohio. Though

workers are more productive and more educated

than in the past, they are not sharing in Ohio’s

growth or in the nation’s. And while education

and unions both help, Ohio is not doing enough to

support either of those important institutions.

We once took on some of our biggest economic

and social challenges with some gusto. In the early

20th century, to make a largely agrarian population

with low rates of formal education ready for the

challenges of the industrial age, America created

universal public education and eventually seeded

the planet’s best system of higher education. To

get products to market and dominate the globe’s

production of manufactured goods, Americans

invested in an interstate highway and rail system

that was unparalleled. To deal with poverty in the

wake of the Great Depression, we established social

security, set a minimum wage, and encouraged

unionization. And to address entrenched racism and

racial inequities, Americans sparked a Civil Rights

movement that demanded inclusion and challenged

white supremacy.

Today, some of our biggest problems are an

overheating planet, entrenched racial inequity,

worsening economic inequality, and a labor market

that, even when good, leaves many out. The high

share of our population that is addicted to opioids

and other drugs also needs targeted attention. But

instead of addressing these head-on, as we might

have in other times, policymakers are avoiding or

even worsening these problems. Our 26 findings

deserve assertive fixes. Below we offer 10, many of

which we earlier highlighted in A new way forward:

Ten ways to support Ohio’s working people.

1. Reverse the policies at the state and federal level that are directing tax cuts to the wealthiest Ohioans and Americans. These are

not creating sufficient numbers of good jobs to

pull all Ohioans into the labor market. Instead,

we should restore taxes on the wealthiest, who

have benefited most from our economy, and

direct spending toward drug treatment, worker

retraining, early education, infrastructure repairs

and energy investment. The first three will help

people leap the barriers that keep them out of

the workforce and the last two will create good

jobs in manufacturing and construction while

also solving societal problems.

2. Invest in conservation, renewable energy and transit to create high-quality jobs in communities throughout our state. Building

V. FINDINGS & FIXES: SUMMARY & RECOMMENDATIONS

https://www.policymattersohio.org/research-policy/fair-economy/work-wages/a-new-way-forward-10-ways-to-support-ohios-working-people

https://www.policymattersohio.org/research-policy/fair-economy/work-wages/a-new-way-forward-10-ways-to-support-ohios-working-people


and installing wind turbines and solar panels;

building, installing and driving transit vehicles;

and insulating and retrofitting buildings are all

activities that could employ manufacturing,

construction and other workers, particularly in

Ohio. They are worthy of investment in Ohio,

including maintaining and strengthening our

recently resumed advanced energy standard.

3. Protect working people’s right to organize. Oppose so called “right to work” laws both

nationally and here in Ohio and move to actually

encourage, not discourage unionization. This

will require innovative new approaches to

organizing, to counteract the barriers that the

Supreme Court and policy makers have erected,

which will reduce unionization.

4. Keep the Affordable Care Act and Medicaid expansion that have done so much to insure Ohioans. Resist attempts to impose barriers like

additional paperwork or work requirements.

5. Restore the minimum wage. Increasing the

minimum wage to $15 by 2025 would give 1.8

million Ohio workers a much deserved and

overdue raise. Accompany a stronger minimum

wage with stronger labor law enforcement. Not

paying workers the minimum wage, not paying

for all hours worked and not paying overtime

when required are all against the law. This makes

them theft – wage theft.

6. Retain and strengthen unemployment and workers’ compensation. Unemployment

compensation and workers’ comp are essential

parts of a fair labor market. When workers lose

a job they need help through the transition.

When they’re hurt on the job, they need help

untill they recover. Resist attacks on these two

pillars of American labor law, and ensure that

employers pay their fair share to support the

unemployment compensation system that helps

our economy.

7. Restore the 40-hour work week: Improvements

to scheduling and overtime rules can bring

back stability to the work week and ensure that

salaried workers earning under $48,000 are paid

for all the hours they work. Restored overtime

protections would cover 351,000 Ohio workers.

8. Expand earned leave, so workers who’ve put

in time can get through the birth of a child,

the death of a parent, or their own illness with

the balance that they need to be good family

members and good employees. Twenty-five

years after the Family Medical Leave Act only 13

percent of private sector workers have any paid

family leave. There is no federal law requiring

paid sick leave. Ohio law could provide workers

with the opportunity to earn leave.

9. Stop incarcerating people for non-violent crimes. Instead offer treatment for drug use,

help probationers avoid reincarceration, and

create better incentives for incarcerated adults

to behave and take part in rehabilitation, so they

can rejoin their families and the economy. Every

Ohioan has a chance to vote for these changes

when Issue 1 appears on the ballot in November.

10. Empower local governments to pass their

own laws to protect working people in their

communities. The state has preempted that

right, undermining local attempts to control

fracking, protect civil rights, or expand worker

rights. If the state won’t protect us, our

communities must be allowed to do so.

FINDINGS & FIXES: SUMMARY & RECOMMENDATIONS


Acknowledgments

We are grateful to Sonia Garfinkel, David Cooper and Janelle Jones for research that contributed to this report and to the Ford and George Gund Foundations for financial support that makes this work possible.

inequality amid job growth - policy matters ohio · 2018. 8. 31. · 10. employment-to-population...

Documents