Approximately 44 percent of Iowa workers earning less than $10 per hour have at least some college education, according to data compiled by Janelle Jones and John Schmitt of the Center for Economic Policy Research.
Schmitt and Jones demonstrated here that “the current federal minimum wage of $7.25 per hour is well below its historical value,” in part because “the average [U.S.] low-wage worker today is both older and much better educated than the average low-wage worker was in the past.”
The national trend is replicated in all 50 states and Washington, DC. Defining a low-wage worker “as anyone making $10.00 per hour or less (in inflation-adjusted 2011 dollars),” Jones and Schmitt created a table on the Center for Economic and Policy Research site showing the growing percentage of low-wage workers in every state who have a high school degree or some college education. Here are the figures for Iowa low-wage workers, 30 years ago and now.
| 1979-1981 | 2009-2011 | ||||||
| less than high school | high school | some college | college+ | less than high school | high school | some college | college+ |
| 31.4% | 43.1% | 19.0% | 6.6% | 21.8% | 33.9% | 34.4% | 10.0% |
Along the same lines, Catherine Rampell summarized a study for the Milken Institute, which showed that “After adjusting for inflation, the typical male college graduate earned about 12 percent less in 2009 than his counterpart did in 1969.”
As Iowa legislators debate policies to make four-year college, community college or vocational training more affordable and accessible, this research underscores the inconvenient truth that a college education is no guarantee of a comfortable income or even a living wage. I don’t have the answer, but this is a big problem.
Rampell notes that “college is still a good investment,” because median income for high school graduates or high school dropouts has fallen more sharply than for workers with post-secondary education. Nevertheless, declining real wages for workers at all education levels pose a huge long-term challenge when two-thirds of U.S. gross domestic product depends on consumer spending.