Wages for top 1% of Americans skyrocketed 160% in nearly 40 years, study shows
Wages for the upper echelon soared more than 345% since 1979
Rich Americans are getting richer — and their wealth is growing significantly faster than the rest of the country's, according to a new study.
Findings published last week by the Economic Policy Institute show that wages for the top 1% of Americans have skyrocketed 160% since 1979. Wages for the upper echelon of the rich -- the top 0.1% -- grew more than twice as fast, soaring more than 345%.
By comparison, those in the bottom 90% saw their annual wages increase by just 26% from 1979 to 2019.
In every period since 1979, wages for the bottom 90% were continuously redistributed upward to the top 10% -- and oftentimes to the very richest 1% and 0.1%, the nonprofit think tank's analysis of Social Security Administration data shows.
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As a result, the bottom 90% earned 69.8% of all wages in 1979, but that percentage dropped to 60.9% in 2019. At the same time, the top 5% saw their share of total wages rise from 19.4% to 27.8%, while the top 1% saw their share nearly double from 7.3% to 13.2%.
"This unceasing growth of wage inequality that undercuts wage growth for the bottom 90% reaffirms the need to place generating robust wage growth for the vast majority and rebuilding worker power at the center of economic policymaking," the study said.
In 2019, salaries averaged $38,923 for the bottom 90%; $320,096 for the top 5%; $758,434 for the top 1%; and $2,88,192 for the top 0.1%.
One reason for the disparity is because executives at hedge funds and other top finance companies have benefited from big jumps in compensation, which are frequently tied to stock price. But the majority of workers have seen their pay plateau or grow slowly, one of the authors of the study said.
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There are several reasons for the lack of growth in workers' wages, including outdated overtime pay rules and the misclassification of many full-time employees as contractors, the author said.
"Imagine how different our economy would look if we invested in working people, instead of enabling corporations to exploit them," Robert Reich, who served as secretary of labor under former President Bill Clinton, tweeted.
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