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US Multimillionaires’ Wages Rose in 2021, While Bottom 90 Percent Got Pay Cut

The bottom 90 percent got a wage cut in 2021, but the top 0.1 percent got a wage raise of 18.5 percent.

New data shows that the gap between the top wealthiest Americans and the working class reached new heights last year as multimillionaires in the top 1 percent experienced the highest wage raises in real, inflation-adjusted dollars while the wages of the bottom 90 percent fell.

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

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

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 percent has seen its wages rise by over 200 percent, while the 0.1 percent’s wages rose by over 460 percent, the report found. The bottom 90 percent, meanwhile, 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.

Such policy decisions are still being made today. The Federal Reserve, under chair Jerome Powell, has been relentlessly raising interest rates in response to inflation even though economists and experts across the political spectrum have warned that the rate raises could trigger a recession. In fact, under Powell’s own admission, the rate hikes will have little effect on inflation but will likely put millions out of work, spiking inflation as high as 5.6 percent next year.

This is despite the fact that the working class has already collectively had its wealth sapped over the past decades in order to make the rich even richer. According to Federal Reserve data released last year, the top 1 percent have more wealth than the entire middle class combined.

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