CLEVELAND, Ohio – Once upon a time, a minimum wage job could cover the cost of college tuition, room and board – with money to spare.
These days, forget about it.
A student working at the wage floor would be thousands of dollars short of the public university bill in Ohio, even after working full-time during the summer and other breaks, and 10 hours a week during the school year.
The solution: go into debt, score a lot of help through scholarships and grants, or get substantial support from Mom and Dad. For many students, these are potential options.
But consider the way it used to be. As late as 1982, a minimum wage job ($3.35 an hour then) with the same amount of work was enough to make about $200 more than the average cost at an Ohio public university ($3,431, according to the National Center for Education Statistics).
Fast forward to the 2018-19 school year, the most recent year for which average cost data is available from the federal NCES, and that same amount of work at minimum wage in Ohio would leave a student $13,056 short.
I first came up with model to look at college affordability about a decade ago for a couple of reasons. First, it helps address the reality when someone might tell a young student, “You can work your way through school like I did.” Plus, it gets to two financial areas of importance for many young adults, the cost of college and entry-level pay for a lot of jobs students might take on.
The recent announcement that Ohio’s minimum wage will increase to $8.80 an hour on Jan. 1 got me wondering whether the gap had continued to widen between the cost of college and pay for entry-level work.
The answer, no surprise here, is yes.
My starting point was the 1981-82 school year, the most recent year for which I could find that minimum wage work under my full-time/part-time scenario covered what the federal government said was the average cost for tuition, room and board at four-year public universities in Ohio.
By the 1989-90 school year, the pay fell about $2,100 short – $3,674 in earnings and $5,805 in college costs – and has gone up from there.
The gap widened to about $4,300 in 1999-2000 ($5,614 in pay and $9,900 for school), to $9,100 in 2009-10 ($7,957 in pay and $17,333 for school), and to just over $13,000 in 2018-19 ($9,097 in earnings and $22,153 for school).
Why the widening gap?
There are many reasons why the gap is so wide, and getting wider.
For starters, minimum wage pay- even with Ohio’s inflation-adjusted minimum wage – is not keeping up with the rising cost of education.
Schools haven’t been able to keep the cost of college down to the rate of inflation over time.
Ohio’s public universities on average are more expensive than most states. And, at least in Ohio, tax dollars are covering less of the college bill.
Let’s unpack these one at a time.
Students pay more; tax dollars cover less
Ohio tax dollars are picking up nowhere near the share of the education bill that they once did. In fact, the burden has flipped entirely, according to data provided by Ohio State University.
In looking at the split between state tax dollars and tuition revenue, in 1981 the state picked up 68% of the instructional costs, leaving 32% to be collected from tuition. This evened out at 50-50 around the year 2000.
By 2019, money from the state covered just 25% of the instructional costs, leaving 75% to be raised through tuition, according to OSU.
Separate research published by the Ohio Department of Higher Education shows much the same trend.
State spending on a per-student basis has changed little. In 2006, state support per student averaged $5,389 at the four-year universities. It was $5,708 in 2015, the last year for which this data is available.
Ohio’s ranking for college costs
Ohio is a high-cost state for attending public universities.
The average of $22,153 for 2018-19 ranks Ohio more expensive than 33 other states, and places it 10% above the national average for public universities of $20,049, according to the NCES.
Average tuition, room and board ranged from lows of $14,389 in Utah, $14,639 in Wyoming and $15,059 in Florida to highs of $27,481 in New Jersey, $28,145 in New Hampshire and $28,681 in Vermont.
Rising cost of instruction
In addition to the state covering a smaller share, the total cost has gone up. From 2006 through 2015, for example, the total cost of instruction at Ohio’s public universities rose 19.3%, according the Ohio Department of Higher Education’s last Cost and State Support report.
And the cost of living and eating on campus is also on the high end in Ohio. The statewide average room and board of $12,085 in 2018-19 made Ohio more costly than 37 other states, according to the federal data.
The room and board average for Ohio is up from $8,515 in 2008-09 and from $5,186 in 1998-99.
The minimum wage
Ohio voters in 2006 approved a constitutional amendment to increase Ohio’s minimum wage and adjust it for inflation each year. This set Ohio’s minimum wage at $6.85 an hour in 2007, $1 higher than the federal minimum wage at the time.
Since then, Ohio’s minimum wage has increased nearly every year and has remained above the federal rate, which was last increased in 2009 to $7.25 an hour. Yet college costs have gone up faster than the state’s minimum wage.
While average tuition, room and board in Ohio increased 33.7% from 2008-09 to 2018-19, Ohio’s minimum wage went up only about half as fast (17.1%) during the same 10 years, from $7.30 an hour in 2009 to $8.55 an hour in 2019. (It’s now $8.70 an hour).
Rich Exner, data analysis editor, writes cleveland.com’s and The Plain Dealer’s personal finance column – That’s Rich! Follow on Twitter @RichExner.
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