Friday, October 10, 2014

Raising the floor: Educating workers

The education of workers

A frequent argument against raising the minimum wage is that those working minimum wage jobs are for those with less education. If these workers were willing to educate themselves, they would find better jobs.  The CBO projects that 58% of all workers without a high school diploma will be low-wage workers (earning less than $11.50/hour in 2016), 30% of all workers with a high school diploma/some college will be low-wage workers, and 7% of workers who earned a bachelor’s degree will be low-wage workers.  Perhaps they have a point.  That is, if you forget that 87% of workers aged 16 to 19 will be low-wage workers and that 12% of low wage workers are under 20.  You know most of those years are spent GOING TO HIGH SCHOOL. You can’t have it both ways; you can’t claim that the vast majority of low-wage workers are young and then say they are also uneducated.
Projecting out to 2016 with the CBO, 70% of low-wage workers have a high school diploma and/or some college and 10% of low-wage workers have a Bachelor’s degree. That leaves about 20% of low-wage workers who have not graduated high school.  That doesn’t leave many uneducated people out there working low-wage (less than $11.50/hour) jobs  who are not younger than 20.  Knowing that, is it possible that raising the minimum wage could help educate these workers?

This is a crazy thought but college is significantly expensive and can be out of reach for those workers who are earning minimum wage.  College is significantly more expensive than in any time in history.  The National Center for Education Statistics (NCES) houses education statistics since 1969 including the price of tuition until the 2011-2012 school year.  For a public four-year institution, the tuition was an average of $7,701.  For someone making the exact federal minimum wage ($7.25/hour) and working 40 hours per week, this tuition would be over 50% of their total income (even if you don’t include any taxes).  Since low-wage workers on average earn half of their family’s income, that’s unfeasible, without taking significant student loans.  Even at California’s current minimum wage ($9/hour), a four year public university would take up 41% of the worker’s income which is still a significant amount of income.  If the worker wants to go to a trade school or a two year college, a public two-year college costs on average $2.647.  How can we compare this against the number of years?  The next table compares how many hours one would have to work at the minimum wage to cover a year of tuition at a four year public university using in-state tuition. The first column is the year followed by the wage, the tuition in its non-inflation adjusted dollars and finally the number of hours it would take at this wage to pay for the tuition.


Year
Wage
Tuition ($)
Hours
1969
1.6
358
223.75
1970
1.6
394
246.25
1971
1.6
428
267.5
1972
1.6
503
314.375
1973
1.6
514
321.25
1974
2
512
256
1975
2.1
542
258.0952
1976
2.3
617
268.2609
1977
2.3
655
284.7826
1978
2.65
688
259.6226
1979
2.9
738
254.4828
1980
3.1
804
259.3548
1981
3.35
909
271.3433
1982
3.35
1031
307.7612
1983
3.35
1148
342.6866
1984
3.35
1228
366.5672
1985
3.35
1318
393.4328
1986
3.35
1414
422.0896
1987
3.35
1537
458.806
1988
3.35
1646
491.3433
1989
3.35
1780
531.3433
1990
3.8
1888
496.8421
1991
4.25
2117
498.1176
1992
4.25
2349
552.7059
1993
4.25
2537
596.9412
1994
4.25
2681
630.8235
1995
4.25
2848
670.1176
1996
4.75
2987
628.8421
1997
5.15
3110
603.8835
1998
5.15
3229
626.9903
1999
5.15
3349
650.2913
2000
5.15
3501
679.8058
2001
5.15
3735
725.2427
2002
5.15
4046
785.6311
2003
5.15
4587
890.6796
2004
5.15
5027
976.1165
2005
5.15
5351
1039.029
2006
5.16
5666
1098.062
2007
5.85
5943
1015.897
2008
6.55
6312
963.6641
2009
7.25
6695
923.4483
2010
7.25
7136
984.2759
2011
7.25
7701
1062.207

From that table, we can see that it now takes about 1000 hours of minimum wage work to be able to afford one year of tuition at a public four year institution.  To kind of tease out the variable of college tuition, the next table shows how many hours it would take if the minimum wage remained at $7.25 in 2012 dollars for each of those years.  The first column is the year, the wage column is what the wage was in comparable dollars to $7.25 in 2012.  So, for instance, $7.25 in 2012 adjusted for inflation was $1.16 in 1969.  The final column is the difference in total number of hours that would have needed to be worked with the real wages compared to the wages with the 2012 minimum wage in inflation adjusted dollars.  The final column is the total number of hours needed to work at the year’s minimum wage compared to the total number of hours needed to work for the 2012 inflation adjusted wage.
Year
Wage
Tuition
Hours
Difference in hours
1969
1.16
358
308.6207
-84.87068966
1970
1.23
394
320.3252
-74.07520325
1971
1.28
428
334.375
-66.875
1972
1.32
503
381.0606
-66.68560606
1973
1.4
514
367.1429
-45.89285714
1974
1.56
512
328.2051
-72.20512821
1975
1.7
542
318.8235
-60.72829132
1976
1.8
617
342.7778
-74.51690821
1977
1.91
655
342.9319
-58.14932848
1978
2.06
688
333.9806
-74.35794101
1979
2.29
738
322.2707
-67.78798374
1980
2.6
804
309.2308
-49.87593052
1981
2.87
909
316.7247
-45.38145509
1982
3.05
1031
338.0328
-30.27159286
1983
3.15
1148
364.4444
-21.75787728
1984
3.28
1228
374.3902
-7.823079723
1985
3.4
1318
387.6471
5.785776997
1986
3.46
1414
408.6705
13.41903201
1987
3.59
1537
428.1337
30.67226541
1988
3.74
1646
440.107
51.23633171
1989
3.92
1780
454.0816
77.26165093
1990
4.13
1888
457.1429
39.69924812
1991
4.3
2117
492.3256
5.792065663
1992
4.43
2349
530.2483
22.45757536
1993
4.56
2537
556.3596
40.58152735
1994
4.68
2681
572.8632
57.96028155
1995
4.81
2848
592.0998
78.01785496
1996
4.95
2987
603.4343
25.40776183
1997
5.07
3110
613.4122
-9.528733651
1998
5.15
3229
626.9903
0
1999
5.26
3349
636.692
13.59924693
2000
5.44
3501
643.5662
36.23964877
2001
5.59
3735
668.1574
57.08529448
2002
5.68
4046
712.3239
73.3071243
2003
5.81
4587
789.5009
101.1787511
2004
5.96
5027
843.4564
132.660129
2005
6.17
5351
867.2609
171.7681862
2006
6.37
5666
889.4819
210.7122281
2007
6.55
5943
907.3282
108.5691916
2008
6.8
6312
928.2353
35.42882802
2009
6.77
6695
988.9217
-65.47343758
2010
6.89
7136
1035.704
-51.42805665
2011
7.1
7701
1084.648
-22.44099077


This table produces more of a need to cut the costs of colleges more than an increase in the minimum wage.  But there are a number of years where the employee would need to work about 2 more weeks of minimum wage to be able to afford a year of tuition with the wage that was constructed compared to the current wage (minimum wage was really stagnant in the 1990s, though).  Although, again, many critics of raising the minimum wage are trying to make it harder for those making minimum wage to be able to afford school by cutting state budgets to schooling, cutting aid programs (such as SNAP, TANF, etc.) or want to make it harder to be able to get those programs.  Finally, many are trying to block Medicaid expansion which would allow these workers to get health insurance and having a greater chance of attending school. 

No comments:

Post a Comment