One-Percenter Wages Up 160% Since 1979; Bottom 90% See Boost of Just 26%

The redistribution of wage income to the top U.S. earners in 2019 continued a pattern that began in 1979. The top 1% of earners have seen wage income grow by just over 160% in the 40-year period while the bottom 90% of workers have experienced a gain of just 26% over the same period. For the top 0.1% of earners, wages have increased by more than 345% in the past 40 years.

Year over year, wages increased by about 2.5% for the top earners and 2.1% for the bottom 90%. For Americans in the 95th to 99th percentile, wages rose 3.8% year over year in 2019, and for those in the 90th to 95th percentile, wages rose by 6.1%.

The Economic Policy Institute (EPI) reported the wage income data on Wednesday, and it used wage statistics data compiled by the Social Security Administration (SSA). Including deferred compensation of nearly $344 billion, and distributions from deferred compensation plans totaling $3.1 billion, net compensation for all wage earners totaled nearly $8.8 trillion in 2019, up from about $8.4 trillion in 2018.

The following chart from EPI’s report illustrates a “major redistribution” of wage growth at the top (highest 1%) and the “tippy-top” (highest 0.1%) from the bottom 90%.

EPI notes that in 2019, “wages grew fastest for the bottom 9% of the top 10% (up 4.2% for 90–95th percentiles, up 2.2% for 95–99th percentiles) and slower than average for the bottom 90% (up 1.7%) and the top 0.1% and top 1% (both up 1.0%).”

As the chart indicates, the Great Recession hit the top 1% and 0.1% hard with declines of 15.6% and 26.1%, respectively, between 2007 and 2009. By 2019, the top 1% had posted a gain of just 1.6% above their earnings in 2007.

The steep gain in the top 1% between 2007 and 2019 came at the expense of the bottom 90% of earners. In fact, according to EPI, “[t]he one constant wage dynamic in every period since 1979 has been that the wages for the bottom 90% are continuously redistributed upwards.”

EPI also reports that wage growth for the bottom 90% has been concentrated in two periods of low unemployment, or 11 of the 40 years since 1979. Wage growth of the bottom 90% of earners between 1995 and 2000 and between 2013 and 2019 amounted to 90% of all wage growth for that group over the entire 40-year period.

During the most recent business cycle (2007 through 2019), the share of all wages going to the bottom 90% fell slightly from 61.1% to 60.9%. Share also decreased from 14.1% to 13.2% for the top 1% of earners. The rewards went to the remaining groups in the top 10% of all earners.

Those in the 90th and 95th percentiles of earners (averaging $129,998 in 2019 and ranging from around $102,000 and $143,000) and between the 95th and 99th percentiles (averaging $210,511 in 2019, with a range of about $147,000 to around $273,000) showed the biggest gains.