The rich aren't just getting richer. They're getting there faster than the rest of America’s workers.
During the last economic expansion, from 2009 to 2019, average yearly wages for the bottom 90% of workers rose 8.7% after adjusting for inflation, according to an analysis of Social Security Administration data by the liberal Economic Policy Institute (EPI). Meanwhile, pay for most of the top 10% rose 13.2% – while earnings for the top 1% jumped 20.4%.
"It's a clear story of disempowerment of workers," said Lawrence Mishel, co-author of the study and a distinguished fellow at EPI.
Executives at hedge funds and other top finance companies have benefited from outsized leaps in compensation, often tied to stock prices, while the vast majority of workers, including both blue- and white-collar workers, have seen their pay stagnate or climb slowly, Mishel said. He cited myriad reasons, including outdated overtime pay rules and the misclassification of many full-time employees as contractors.
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The disparity in wage growth largely continued last year, with the bottom 90% seeing gains of 1.7% while most of the top 10% notched a 3.1% advance. The top 1%, however, lagged in terms of growth: Their wages edged up just 1%.
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In 2019, salaries averaged $38,923 for the bottom 90%; $320,096 for the top 5%; $758,434 for the top 1%; and $2,858,981 for the top 0.1%.
Over a longer time period, the gap between the highest-paid workers and other Americans is even starker. From 1979 to 2019, average pay increased 26% for the bottom 90%, 64.1% for most of the top 10%, 160.3% for the top 1%, and 345.2% for the top 0.1%, according to EPI.
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As a result, the bottom 90% earned 69.8% of all wages in 1979, but that share fell to 60.9% last year. Meanwhile, the top 5% saw their share of total wages rise from 19.4% to 27.8%, while the top 1% nearly doubled their share, from 7.3% to 13.2%.
There is a caveat: Low-wage workers in the bottom 10% have outpaced other groups in pay gains in recent years before this year’s pandemic-induced recession because of state minimum wage increases and low unemployment in food services and other low-paid industries, Mishel said. But those advances haven’t narrowed the gap between the highest-paid workers and the rest of the country.
You can follow Paul Davidson on Twitter: @PDavidsonusat.
This article originally appeared on USA TODAY: Wage gap: Highest-paid workers see pay rise much faster