One more report, one more reminder of the need for a new social contract that can rebuild the middle-class by restoring young workers’ abilities to get a college education, a decent job, reasonable lines of credit, and have the necessary tools for successful family life. “Building Ohio’s Future Middle Class: Addressing the Challenges Facing Young Adults“, written by Policy Matters Ohio and Demos and released yesterday, is an important new report documenting the significant backwards slide for young workers in Ohio since the manufacturing boom-era of the 1960s and 70s.
Educational aspirations are up across all racial and ethnic groups, and college enrollment increased from 30 to 34 percent from 1991 to 2007. However, enrollment gaps by income, race and ethnicity still persist and are further magnified by significant gaps in graduation rates. Low-income students are nearly twice as likely to drop-out before completing their bachelors degree. This is because college has gotten much more expensive and financial aid has not kept pace; in fact tuition is up 33% at public four-year universities over the past decade, leaving the average low- to moderate-income student with $10,265 year in uncovered expenses after grant aid.
Employment and Earnings
Over the past 40 years, wages for young (20-24) male workers have declined more than 40 percent partially because of the transition in Ohio’s economy from unionized manufacturing jobs to low-wage service jobs. The only group that fared-well in Ohio since the 1960s is 30-34 year old women with some college education – for all other young workers, education, age, and race have only factored in the steepness of the decline.
Debts and Assets
Unsurprisingly as higher education has become more necessary, college costs skyrocket, and earnings plummet, debt has become a crisis for Ohio’s young workers. In 2008, 66% of four-year college graduates in Ohio had student loan debt, and their average credit card balance was $3,173. And after they graduate, they are very likely to be without health insurance (more than a fifth of the under 35 crowd lacks insurance). And in 2007, 18-24 year olds spent 42% of their income on rent. These conditions make building assets and family savings impossible.
Raising a Family
The budget crisis has resulted in significant cuts in children and family services provided by the state. With the stagnant wages, underemployment, large debt burdens, and high-cost of housing, the 39% of household-heads between 25 and 34 who have young children are struggling to stay out of poverty. In fact, nearly half of children under 6 in Ohio are living in low-income households.
The facts and figures have helped us identify the problem, and the authors offer some valuable policy proposals – but without major political mobilization we will continue to see a downward spiral of our economy.