A prominent feature of rising wage inequality over the last thirty years was that not only did the top one percent of wage earners make spectacular wage gains but that the top one percent’s gains were far larger than those of very high wage earners just beneath them in the wage hierarchy. The figure shows that the top one percent of wage earners saw their wages rise by 153.6 percent between 1979 and 2012, the latest year for which we have data. This stands in stark contrast to the 17.1 percent wage growth obtained by the bottom ninety percent over those same thirty-three years. High wage earners in the 90th through 95th percentiles (earning more than 90 percent of other wage earners but less than the highest five percent of earners) saw wage growth of 39.2 percent which was more than double that of the bottom 90 percent of earners but was only one-fourth as much as the wage gains of the top one percent. Since 1979 the wage gap between those in the top one percent and other high wage earners grew far more (the ratio grew from 3.40 in 1979 to 6.20 in 2012) than the more well-known gap between college and high school-educated workers (which grew from 1.40 in 1979 to 1.79 in 2012).
On Wednesday, June 4th EPI will launch Raising America’s Pay, a new initiative focused on policy solutions to jumpstart the stagnant wages of American workers, with the release of a new paper (which includes the figure below), which argues that wage growth is the key to addressing income inequality, boosting middle class incomes, reducing poverty, and facilitating social mobility.
Escalating wages of the top 1%: Cumulative change in real annual wages, by wage group, 1979–2012
| Year | Top 1% | 95-99% | 90-95% | Bottom 90% | Average |
|---|---|---|---|---|---|
| 1979 | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| 1980 | 3.4% | -0.2% | -1.3% | -2.2% | -1.4% |
| 1981 | 3.1% | -0.1% | -1.1% | -2.6% | -1.7% |
| 1982 | 9.5% | 2.2% | -0.9% | -3.9% | -1.9% |
| 1983 | 13.6% | 3.6% | 0.7% | -3.7% | -1.1% |
| 1984 | 20.7% | 6.0% | 2.5% | -1.8% | 1.2% |
| 1985 | 23.0% | 8.1% | 4.0% | -1.0% | 2.4% |
| 1986 | 32.6% | 12.5% | 6.4% | 1.1% | 5.3% |
| 1987 | 53.5% | 15.0% | 7.4% | 2.1% | 8.0% |
| 1988 | 68.7% | 18.4% | 8.2% | 2.2% | 9.7% |
| 1989 | 63.3% | 18.2% | 8.1% | 1.8% | 9.0% |
| 1990 | 64.8% | 16.5% | 7.1% | 1.1% | 8.3% |
| 1991 | 53.6% | 15.5% | 6.9% | 0.0% | 6.5% |
| 1992 | 74.3% | 19.2% | 9.0% | 1.5% | 9.8% |
| 1993 | 67.9% | 20.6% | 9.2% | 0.9% | 9.1% |
| 1994 | 63.4% | 21.0% | 11.2% | 2.0% | 9.8% |
| 1995 | 70.2% | 24.1% | 12.2% | 2.8% | 11.3% |
| 1996 | 79.0% | 27.0% | 13.6% | 4.1% | 13.3% |
| 1997 | 100.6% | 32.3% | 16.9% | 7.0% | 18.0% |
| 1998 | 113.1% | 38.2% | 21.3% | 11.0% | 22.9% |
| 1999 | 129.7% | 42.9% | 25.0% | 13.2% | 26.6% |
| 2000 | 144.8% | 48.0% | 26.8% | 15.3% | 29.9% |
| 2001 | 130.4% | 46.4% | 29.0% | 15.7% | 29.3% |
| 2002 | 109.3% | 43.2% | 29.0% | 15.6% | 27.2% |
| 2003 | 113.9% | 44.9% | 30.3% | 15.7% | 28.0% |
| 2004 | 127.2% | 47.1% | 30.8% | 15.6% | 29.2% |
| 2005 | 135.4% | 48.7% | 30.8% | 15.0% | 29.6% |
| 2006 | 143.4% | 52.1% | 32.5% | 15.7% | 31.2% |
| 2007 | 156.2% | 55.4% | 34.1% | 16.7% | 33.4% |
| 2008 | 137.5% | 53.8% | 34.2% | 16.0% | 31.4% |
| 2009 | 116.2% | 53.6% | 35.4% | 16.0% | 29.9% |
| 2010 | 130.9% | 55.7% | 35.7% | 15.2% | 30.8% |
| 2011 | 134.0% | 56.9% | 36.2% | 14.5% | 30.7% |
| 2012 | 153.6% | 61.6% | 39.2% | 17.1% | 34.8% |
This is an update of Figure 4H from State of Working America, 13th Edition.
Source: Authors' analysis of Kopczuk, Saez, and Song (2010) and Social Security Administration wage statistics
