0.1% Of Americans Got 18.5% Pay Hike; Bottom 90% Got Wage Cuts

New data show that the gap between the top wealthiest Americans and the working class reached new heights last year as multimillionaires in the top 1% experienced the highest pay raises in real, inflation-adjusted dollars while the wages of the bottom 90 percent fell, Sharon Zhang reported for Truthout.

Photo Insert: In 2021, the top 1% of earners saw their annual wages rise by 9.4%. The raise for the wealthiest of the 1% was even higher, with the pay of the top 0.1% rising by 18.5 percent.

In 2021, the top 1% of earners saw their annual wages rise by 9.4%. The raise for the wealthiest of the 1% was even higher, with the pay of the top 0.1% rising by 18.5 percent.

This stands in stark contrast to the wages for the bottom 90%, who received a 0.2% pay cut in 2021 in real wages. This allowed the top 1% to seize nearly 15% of all wages last year. In fact, it was the only group that saw its pay rise in 2021. Meanwhile, the bottom 90% saw its share of wages sink to a record low of 58.6%.

The analysis of Social Security Administration data was done by the Economic Policy Institute (EPI), which also compared wage trends over the past four decades. Between 1979 and 2021, the top 1% has seen its wages rise by over 200%, while the pay of the 0.1% rose by over 460%, the report found.

The bottom 90% saw its wages rise by a mere 29 percent, or just about a 0.7 percent raise yearly on average, compared to the 11.1 percent yearly raise on average for the top 0.1 percent.

The findings are no surprise, EPI writes, as the 2021 trends are just continuations of long-running trends reflecting the erosion of worker power and labor rights starting around the Reagan administration in the 1980s.

Slow wage growth for workers is the result of policy decisions that actively uplift the richest Americans while suppressing the working class, the report notes.

Decisions like tolerating or worsening high unemployment rates, writing weak labor laws that grant employers disproportionate power over workers, failing to raise the federal minimum wage, and not enforcing laws against wage theft are just a few of the decisions that have led to historic wage gaps.

For instance, EPI notes that there have been two main periods of time in recent decades in which working class wages have grown: the late 1990s and the mid-to-late 2010s.

In reaction to those wage raises, “It’s not an accident that these were two periods when policymakers allowed the unemployment rate to reach 4 percent (or lower) without slowing the economy in the name of inflation control,” the report says.

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