Report: Middle-class falls behind more

Costs are going up faster than incomes and inflation, one expert said.

AKRON (AP) — Ohio’s middle class families are racing to the bottom of the nation’s economic ladder with incomes that fail to keep pace with inflation and the rising costs of higher education and health care, the Akron Beacon Journal reported Sunday.

Ohio ranks 32nd with a median household income of $44,532 based on 2006 data, the latest year available. Adjusted for inflation, that’s only $431 more than the median household income in 1969, according to the newspaper’s analysis of U.S. Census Bureau data.

The economic slide in Ohio coincides with the loss of tens of thousands of good-paying manufacturing jobs in the auto, rubber and steel industries.

The addition of more women in the workplace hasn’t been enough to help improve household incomes because hourly wages have dropped, the newspaper said. In Ohio, median earnings for workers ages 20 to 64 have slid 7.5 percent since 1969.

Lagging incomes aren’t the only threat to the middle class, said Amy Hanauer, executive director of Policy Matters Ohio, a Cleveland-based economic research organization.

“Being middle class means being able to own your home, access to health care for you and your family, and being able to send your kids to college,” Hanauer said.

But achieving those goals, plus a secure retirement, are increasingly out of reach because costs have gone up much faster than incomes and inflation, she said.

That’s especially true for higher education in Ohio, which last year had the fifth-highest tuition and fees — averaging $8,445 — among states with four-year public universities, according to the College Board’s Trends in College Pricing.

This year, because of a state-mandated tuition freeze, Ohio dropped to seventh highest.

But for many Ohioans, the cost remains high.

At the University of Akron, for example, the annual cost for a full-time student living on campus more than tripled within a generation — from $5,622 in the 1989-90 school year to $17,254 today, the newspaper said.

For many students, going deep into debt is the only way to pay for college. That makes it even more difficult to get into the middle class, Hanauer said.

Ohio’s overall health costs have gone up slightly higher than the national average, said William Hayes, president of the Health Policy Institute of Ohio, a Columbus nonprofit research center.

Per capita spending on health care in Ohio more than doubled to $5,725 between 1991 and 2004, an average annual increase of 6 percent, compared to 5.5 percent for the nation, Hayes said.

But out-of-pocket costs are increasing even faster, Hayes said. That’s because employers are shifting more of the cost to their employees.

“You’re having a trade-off — health care or wages,” Hayes said.