Fifty years ago, the average GM employee could pay for a year of a son or daughter’s college tuition on just two weeks wages.
Democratic presidential candidate Martin O’Malley recently offered a striking comparison about American families and college tuition. "Fifty years ago, the average GM employee could pay for a year of a son or daughter’s college tuition on just two weeks' wages," O’Malley wrote in a post on Medium. "Today, we are saddling our graduating kids and their families with more than $1.3 trillion in loan debt." Really? We decided to take a closer look. What tuition cost The easier part of this equation to nail down is the average cost of college tuition. According to the U.S. Education Department, average undergraduate tuition and fees -- excluding room and board -- in the 1965-66 school year was $607 per year for a four-year college (public and private) and $203 for a two-year college. (Adding room and board bumps up those figures to $1,375 and $884, respectively, but O’Malley said "tuition," so we won’t consider room and board.) What the average GM worker made According to an article in the Aug. 25, 1964, edition of the Chicago Tribune, the average hourly wage in the auto industry that year was $3.01. That grew a bit after a new union contract was negotiated later that year, but a figure in that ballpark is about right for the time frame O’Malley was talking about, said Kristin Dziczek, director of the industry and labor group at the Center for Automotive Research in Ann Arbor, Mich. Historical wage data from Ford, for instance, shows that the base wage for a "major assembler" was $2.91 an hour in 1965. Dziczek noted that workers in durable-goods manufacturing averaged 44 hours per week in 1965, with time-and-a-half for the final four hours. So a $3.10-an-hour wage (accounting for the increase in the 1964 UAW contract) would work out to $142.60 per week, or $285.20 for the two-week period O’Malley cites. So if you ignore taxes -- a questionable policy, but one we’ll grant O’Malley for the sake of argument -- then two weeks of average GM pay would have been enough to pay for one year at the typical two-year college in 1965. But it would not be enough to pay for a year at typical four-year college. That would take a little more than four weeks’ work. What the O’Malley campaign says The O’Malley campaign said they took the wage number from a column by University of California-Berkeley economist Robert Reich, who also served as labor secretary under President Bill Clinton. In 2014, Reich wrote. "Fifty years ago, when General Motors was the largest employer in America, the typical GM worker got paid $35 an hour in today’s dollars." But that works out to $4.66 an hour in 1965 dollars, and contemporary evidence suggests that wage is about 50 percent too high. Meanwhile, on the tuition side of the equation, the O’Malley campaign said that one year of in-state, undergraduate tuition at University of Iowa in the 1964-65 school year cost $340, and that this was the case for other states, as well, such as New Hampshire. However, if you use the $3.10-an-hour wage -- rather than Reich’s $4.66-an-hour wage -- then two weeks’ pay, even when untaxed, would not quite cover a year’s in-state tuition at the University of Iowa. And since many GM workers wouldn’t have been residents of Iowa, and thus eligible for the in-state rate at the University of Iowa, we think it’s fairer to look at average tuition nationally. Comparing 1965 to today So O’Malley’s comparison doesn’t quite hold up. However, it’s fair to note that he has a point about the larger question. Namely, it was a whole lot more realistic to be able to pay for a year of tuition with just a few weeks of blue-collar income in 1965 than it is now. During the 2012-13 school year, a year’s tuition at the average four-year college was $14,101, and the base wage at Ford for a major assembler was $28.13 an hour. If you include overtime pay, then two 44-hour weeks at that wage (without setting aside anything for taxes) works out to about $2,700, or less than 20 percent of the one-year average tuition cost. At that rate, it would take more than 10 weeks’ work, including some overtime, to pay for a year’s worth of tuition. We should note that the rise of college tuition costs is the bigger culprit here. In nominal dollars, auto worker wages have grown ninefold since 1965. But average four-year-college tuition is up 23 times from what it was in 1965. Our ruling O’Malley said, "Fifty years ago, the average GM employee could pay for a year of a son or daughter’s college tuition on just two weeks wages." That’s not quite right -- it would have taken about four weeks of work at GM, not two, to pay for a year at the average four-year college in 1965, and more than that if you take account of taxes. Still, O’Malley has a point that the situation in 1965 was quite a deal compared to today, when a typical auto worker would have to work for 10 weeks in order to pay for a year of tuition at the average four-year college. We rate the statement Mostly True. CORRECTION, Feb. 2, 2016: The calculations in our original version slightly overstated the typical weekly and biweekly wages for UAW workers. A $3.10-an-hour wage (accounting for the increase in the 1964 UAW contract) would work out to $142.60 per week, or $285.20 for the two-week period Martin O’Malley cited. The difference does not affect the final rating.
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