The Economic Policy Institute (EPI), a progressive think tank with a long track record of popularizing research on wage suppression and runaway inequality.
"Everyone's obsessed with a post-pandemic phenomenon called 'quiet quitting,'" EPI explained. "It's basically defined as workers just doing the basic requirements of their jobs and not going 'above and beyond.' But the reality is workers have long been going 'above and beyond' and not getting paid for it," EPI continued. "We're calling this phenomenon 'quiet fleecing.'"
EPI pointed out that between 1948 and 1979, the nation's economy and working-class wages grew largely in tandem. Although wages began to flatline during the 1970s crisis of stagflation, a 118% increase in productivity during this 31-year period—when Keynesianism was still dominant—was mirrored by a 107% increase in typical worker pay.
But ever since former President Ronald Reagan's neoliberal counterrevolution against unions, public goods provided by the welfare state, and other fixtures of the New Deal era—a pro-corporate and anti-labor agenda that became bipartisan and has only recently lost some of its hegemony—the gap between productivity and typical worker pay has widened dramatically. In essence, policy choices made to suppress wage growth prevented potential pay growth fueled by rising productivity from translating into actual pay growth for most workers.
According to EPI, net productivity rose 61.8% from 1979 to 2020. Hourly pay, meanwhile, increased by just 17.5% during those 41 years, meaning that productivity grew 3.5 times as much as wages over the past four decades, after adjusting for inflation. When employers don’t share the gains of increased productivity, keeping the benefits for themselves, inequality soars and workers suffer.
"Workers are more productive than ever," EPI noted , "but employers haven't been sharing the wealth. In fact, they've been fleecing workers for 40 years when it comes to having pay rise with productivity."
"Who's reaping the benefits if workers are getting quietly fleeced?" the think tank asked.
At the same time that typical worker pay has remained largely flat despite climbing productivity, the share of income captured by the top 1% has soared. From 1948 to 2019, the top 1% enjoyed a 407% increase in compensation, with the bulk of those gains coming after 1979.
According to EPI's latest research on the subject, top CEOs in the U.S. were paid 351 times as much as typical workers in 2020. EPI found that the ratio of CEO-to-typical-worker compensation was 21-to-1 in 1965 and 61-to-1 in 1989. Between 1978 and 2020, researchers noted, CEO pay soared by 1,322% while typical worker pay grew by just 18%.
In a more detailed analysis on the topic, EPI noted that the growing gulf between productivity and typical worker pay represents "income going everywhere but the paychecks of the bottom 80% of workers."
That wedge of income "went into the salaries of highly paid corporate and professional employees," EPI pointed out, "and it went into higher profits (i.e., toward returns to shareholders and other wealth owners)."
"This concentration of wage income at the top (growing wage inequality) and the shift of income from labor overall and toward capital owners (the loss in labor's share of income) are two of the key drivers of economic inequality overall since the late 1970s," the think tank added.