College degree pays off with higher wages in Ohio but disparities remain for Black people and women

State of Working Ohio annual report findings released

Ohio workers with a college degree earned nearly twice the pay of those with only a high school degree in 2021, but wage disparities persist for women and Black people at all educational levels, according to the new annual State of Working Ohio report released today by Policy Matters Ohio.

The report also found that more education raised pay and tended to protect workers from job loss.

During the COVID-19 pandemic, 13.3% of Ohio workers with less than a high school diploma lost their jobs and 10.2% remained unemployed by 2021. For college grads, 4.6% lost their jobs and 2.6% were still out of work in 2021, the report said.

“For anyone who is able to access higher education it is probably a good bet,” said Michael Shields, lead author of the report and a researcher at Policy Matters Ohio, a liberal-leaning Columbus-based think tank. “We need deeper state investment and federal investment in public universities and community colleges.”

Credit: Alexis Larsen

Credit: Alexis Larsen

The state of Ohio and the Dayton region have increasingly embraced post-secondary programs that provide skills training and a credential such as a certificate, and some companies will pay for that training for their workers.

Workforce development programs at Sinclair Community College provide degrees or certifications for workers looking to boost their skills or make a career change, said Ronald W. Ulrich, who chairs the college’s advanced manufacturing and industrial and systems engineering technology departments.

He said skilled trades training such as precision and computer-controlled machining, welding and quality control provide “a major advancement step for the existing worker or new worker who does not have these skills to move to whole new level of pay within their company.”

“I know my machining graduates are walking out with a certificate or degree into jobs paying $50,000 to $70,000 per year,” Ulrich said.



Education and pay closely tied

College graduate wages dipped slightly in 2021 after a spike in 2020 that was likely due in part to higher-paid workers’ greater ability to continue working during the first year of the pandemic, the report said.

In 2021 the median hourly pay for a college graduate with a bachelor’s degree or higher was $32.08, according to the report, which used an analysis of U.S. Census Bureau data by the Economic Policy Institute, a liberal-leaning Washington D.C.-based think tank.

For people with a high school diploma and some college, but no degree, the median pay was $18.93 per hour. A person with just a high school diploma was paid $17.18 and non-graduates were paid $14.01 hourly, the report said.

Policy Matters recommends that policymakers improve support for preschool through university education, job training programs and funding to make education affordable for everyone.

Ohio workers saw paychecks grow in the last two years as a tight job market led to pay increases after years of stagnating wages.

But even though the pay gap between men and women in Ohio narrowed over the last decade, by 2021 women only made 81 cents for every dollar earned by men, the report said.

And the pay gap between Black and white workers has grown. In 2021 Black workers made 80 cents for every dollar earned by whites, down from the 92 cents on the dollar Black workers earned in 1979, the report said.

Median hourly pay for Black workers was $16.92 in 2021. For white workers, it was $21.26, the report said. That racial wage gap exists at all education levels in Ohio.

Black workers with advanced college degrees were paid a median hourly wage of $30.32 in 2021, compared to $35.64 for white workers.

For high school graduates the pay difference was $14.73 hourly for Black workers and $18.01 for white workers.

The gender pay gap also persists for women across all education levels in Ohio. Men with only a high school diploma were paid $19.56 hourly, which is more than the $16.63 median hourly pay of women who had a diploma plus some college, the report said.

Among college graduates men made $31.41 hourly to women’s $24.91 at the median.

Credit: Alexis Larsen

Credit: Alexis Larsen

The report says some of the pay difference may stem from differences in occupations that women and men tend to have and because women are more likely to pause careers to take care of children.

Child care problems hit women hardest, with 60% of mothers who were unemployed or working part time saying they would return to work or increase hours if they could find affordable quality child care, the report said.

A proposal by President Joe Biden to fund universal preschool and help with child care costs passed in the U.S. House of Representatives last year but did not win Senate approval.

“The primary cause of the gender pay gap is that men work longer hours and stay in the labor force for their careers,” said Rea S. Hederman Jr., vice president of policy at The Buckeye Institute, a conservative-leaning Columbus-based think tank. “Women are more likely to take time off to raise children, and when workers take time off from the work force their future earnings are less than someone who stays in the workforce.”

Credit: Contributed

Credit: Contributed

He said the gender pay gap is bigger for occupations that have more demanding hours and can shrink in jobs where employers allow remote work and more flexibility.

The Policy Matters report also recommends raising the minimum wage to $15 per hour. But Hederman argues that will harm small businesses and “prevent some workers from finding legal work and greatly reduce employment opportunities for teens and younger workers.”

Shields said the decline of unions has hurt workers and the government should make it easier for workers to form unions to bargain for higher wages and better working conditions. The median hourly wage for unionized workers in Ohio was $24.75 in 2021 compared to $19.91 for non-union workers, according to the report.

“As our recovery continues we need to demand a better Ohio economy than the one we had before. We can’t simply return to where we were in 2019 where wages had been held flat for decades,” Shields said. “We need to rebuild the Ohio economy as a place where everyone can thrive.”

Ohio’s jobs recovery incomplete

Ohio still has fewer people employed than before the pandemic began in March 2020, even as the nation’s jobs have recovered. That leaves Ohioans more at risk of economic pain if federal efforts to tame inflation slow job growth, according to the report.

“Policymakers must navigate this carefully to bring inflation down to normal levels while limiting harm to the labor market and thereby to most Ohioans,” the report said. “Inflation strategy will be a key concern for working Ohioans, as those who struggle the most to afford higher prices also face the greatest risk of job loss if the policy response is mishandled.”

In July U.S. employment reached pre-pandemic levels for the first time and on Friday the BLS reported 315,000 new jobs were created in August, according to the U.S. Bureau of Labor Statistics.

Ohio had restored 85.3% of jobs lost, but remained 129,800 jobs short by July, Shields said. And Ohio still has fewer people employed than in 2000, when the number of jobs in the state hit nearly 5.63 million. In July there were 5.48 million people employed in Ohio, according to preliminary BLS data.

“Ohio suffers deeper proportional losses than the nation in economic downturns, and more protracted recovery times that never restore us to the growth path we would have been on with the recession, or in some cases even to our prior level,” the report said.

Credit: Alexis Larsen

Credit: Alexis Larsen

Manufacturing once dominated Ohio’s jobs mix but now ranks fifth after the state lost 700,000 manufacturing jobs since the 1970s, cutting in half the number of those jobs, Shields said.

“This trend has important impacts on job quality, largely because union-dense jobs in the manufacturing sector, and to a lesser extend government, have been largely replaced by jobs in lower-paying sectors,” the report said.

The trade, transportation and utilities sector is the state’s largest employer, at 19%, and was the only major sector to add jobs during the pandemic.

Education and health services ranks second, followed by government, and professional and business services.

Another concern for Ohio is demographic.

“One factor we have to recognize is Ohio’s workforce is aging relative to the nation’s,” Shields said.

The report said the state needs to attract and retain younger people and families by committing “to affordable, high-quality child care, equitable, well-resourced schools and commitments to the health of all residents.”

Retaining and attracting a talented workforce is identified as the Dayton region’s top priority in the new Dayton Region Comprehensive Economic Development Strategy because job growth is outpacing population growth, which is projected to continue into the future, said Julie Sullivan, executive vice president of regional development at the Dayton Development Coalition.

“As such, a multi-pronged approach is needed: our existing workforce needs to be engaged and upskilled to match the need, we need to nurture an engaged pipeline to prep for the jobs of the future, and attract new people to the region,” Sullivan said. “Many partners are engaged in this work from a variety of angles, and we need all of them to succeed.”

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