Wage inequality in the U.S. continues to increase, with the nation’s top earners consistently seeing a significantly higher percent increase in annual wages each year, according to a report from the Economic Policy Institute (EPI) published in mid-December.
Last year, the top 1% of earners saw a 7.3% increase in annual wages (with the top 0.1% seeing a 9.9% increase), while the increase for the bottom 90% of earners was only 1.7%.
“One constant wage dynamic in every period since 1979 has been that the wages for the bottom 90% are continuously redistributed upwards,” the report said. “The upward distribution of wages from the bottom 90% to the top 1.0% that was evident over the period from 1979 to 2019 was especially strong in the 2020 pandemic year, yielding historically high wage levels and shares of all wages for the top 1.0% and 0.1%. Correspondingly, the share of wages earned by the bottom 95% fell in 2020.”
Since 1979, the top 1% of earners in the U.S. have seen their annual wages increase 179.3%, while the top 0.1% of earners have had a 389.1% increase. By comparison, the bottom 90% of earners have seen a total annual wage increase of 28.2%.
The average annual wages were $40,296 in 1979, rising to $59,900 by 2020. For the bottom 90%, average annual wages were $31,265 in 1979, compared to $294,966 for the top 1%, while wages were $40,085 in 2020 for the bottom 90% of earners, and $823,763 for the top 1%.
During this time, the share of all US wages dropped from 69.8% (1979) to 60.2% (2020) for the bottom90% of earners, while it increased from 7.3% (1979) to 13.8% (2020) for the top 1%.
The full report is available here.