Monday, December 13, 2021

Not so tough at the top

 Economic Policy Institute (EPI) distinguished fellow Lawrence Mishel—the group's former president—and research assistant Jori Kandra looked at the Social Security Administration's newly available wage data for 1979 to 2020.

The pair found that while the annual wages of the bottom 90% of American workers grew just 28.2% during that period, wages of the top 1.0% and 0.1% "skyrocketed" by 179.3% and 389.1%, respectively.

They noted that "the other segments of the top 10% also had faster-than-average wage growth since 1979, up 53.9% and 83.1%, but nowhere near as fast as the wage growth at the top."

"This continuous growth of wage inequality undercuts wage growth for the bottom 90%," Mishel and Kandra wrote, "and reaffirms the need to place generating robust wage growth for the vast majority and rebuilding worker power at the center of economic policymaking."

"This disparity in wage growth reflects a sharp long-term rise in the share of total wages earned by those at the very top: The top 1.0% earned 13.8% of all wages in 2020, up from 7.3% in 1979," according to the pair.

"That marks the second-highest share of earnings for the top 1.0% since the earliest year, 1937, when data became available (matching the tech bubble share of 13.8% in 2000 and below the share of 14.1% in 2007)," they continued. "The share of wages for the bottom 90% fell from 69.8% in 1979 to just 60.2% in 2020."

 EPI pointed to "the erosion of collective bargaining," and called on federal lawmakers to enact the Protecting the Right to Organize (PRO) Act, passed by the Democrat-controlled U.S. House of Representatives in March.

The sweeping pro-union bill would boost collective bargaining rights, increase access to union elections, and introduce penalties for companies that exploit their workers—but it faces an uphill battle in the evenly split U.S. Senate unless Democrats decide to kill the filibuster.

EPI also noted that CEO pay has soared 1,322% during the past four decades, citing a report from Mishel and Kandra published in August, based on data back to 1978.

"Exorbitant CEO pay is a major contributor to rising inequality that we could safely do away with," they wrote at the time, adding that chief executives "are getting more because of their power to set pay and because so much of their pay (more than 80%) is stock-related, not because they are increasing their productivity or possess specific, high-demand skills."

"This escalation of CEO compensation, and of executive compensation more generally, has fueled the growth of top 1.0% and top 0.1% incomes, leaving less of the fruits of economic growth for ordinary workers and widening the gap between very high earners and the bottom 90%," they said. "The economy would suffer no harm if CEOs were paid less (or were taxed more)."

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