Over the last few decades, the gap between the richest Americans and everybody else has grown substantially. According to a new report from the Economic Policy Institute, one of the driving factors has been the growth in pay going to executives and employees of financial firms:

The significant income growth at the very top of the income distribution over the last few decades was largely driven by households headed by someone who was either an executive or was employed in the financial sector. Executives, and workers in finance, accounted for 58 percent of the expansion of income for the top 1 percent and 67 percent of the increase in income for the top 0.1 percent from 1979 to 2005. These estimates understate the role of executive compensation and the financial sector in fueling income growth at the top because the increasing presence of working spouses who are executives or in finance is not included.

Over the last 30 years, CEO pay has increased 127 times faster than worker pay. The average Fortune 500 CEO is now pay 380 times as much as the average worker; in 1980, those CEOs received 42 times the average worker’s pay.

And of course, it’s no secret that Wall Street employees are pulling in humongous paychecks, even after they crashed the global economy. As one former Wall Street trader put it, “There’s no other industry where you could get paid so much for doing so little.” And while they’ve been collecting bigger and bigger bonuses, the rest of the American workforce has dealt with stagnating wages and the Great Recession.

Compensation for chief executives at American companies grew 15 percent in 2011 after a 28 percent rise in 2010, part of a larger trend that has seen CEO pay skyrocket over the last three decades. Workers, on the other hand, have been left behind.

Since 1978, CEO pay at American firms has risen 725 percent, more than 127 times faster than worker pay over the same time period, according to new data from the Economic Policy Institute:

From 1978 to 2011, CEO compensation increased more than 725 percent, a rise substantially greater than stock market growth and the painfully slow 5.7 percent growth in worker compensation over the same period.

In 1978, CEOs took home 26.5 times more than the average worker. They now make roughly 206 times more than workers, EPI found. The pay isn’t always tied to the performance of their businesses — as ThinkProgress has noted, CEOs at companies like Bank of America often pocket huge pay increases even as the company’s stock price plummets and jobs are cut.

Workers’ wages aren’t tied to productivity either. Despite substantial gains in productivity since the 1970s, worker pay has remained flat. According to Labor Department data cited by the Huffington Post, inflation-adjusted wages fell 2 percent in 2011.

As a result, American income inequality has skyrocketed, growing worse than it is in countries like Pakistan and Ivory Coast. Wealth inequality is worse than it was even in Ancient Rome. And, as pay skyrockets and tax rates fall for the richest Americans, the rising inequality has left the bottom 95 percent of Americans saddled with more debt than ever before.

According to the latest edition of the AFL-CIO’s Executive Pay Watch report, the gap between CEO pay and worker pay expanded last year. In 2011, CEOs in the Fortune 500 made an average of $12 million, about 380 times what the average worker makes:

The ratio of CEO-to-worker pay between CEOs of the S&P 500 Index companies and U.S. workers widened to 380 times in 2011 from 343 times in 2010. Back in 1980, the average large company CEO only received 42 times the average worker’s pay.

This explosion in pay certainly isn’t justified by corporate performance. In fact, “while the average CEO pay increased 13.9 percent at S&P 500 Index companies in 2011, the S&P 500 Index ended the year at the same level as it started.” Just this week, shareholders at Citigroup voted to reject CEO Vikram Pandit’s pay package (in a non-binding vote), saying that he was collecting millions while the company floundered.

Meanwhile, workers saw their pay increase by just 2.8 percent last year. Already, most of the gains of the nascent economic recovery have been going to the richest Americans (just as they have for recent economic expansions). In 2010, the richest 1 percent captured 93 percent of the nation’s income gains.

The AFL-CIO is calling for regulators to implement a rule included in the Dodd-Frank financial reform law that requires companies to disclose their CEO-to-worker pay ratio. “Astronomical CEO pay is based on the false idea that the success of a corporation is due to one CEO genius. In reality, all employees create value, and CEO pay levels should be more in line with the rest of their company’s employee pay structure. CEOs should be paid as a member of a team, not as a superstar,” said AFL-CIO President Richard Trumka.

In the wake of the Great Recession, wages have stagnated while CEO pay has soared. Case in point, Sears last year paid its chief executive millions of dollars, and piled on hundreds of thousands of dollars in assorted perks, including charter airfare and covering some of his income tax bill:

Sears Holdings Corp. paid its chief executive $9.9 million last year, including incentives the ailing department store operator offered to lure the former technology executive, according to an Associated Press analysis of a regulatory filing.

Lou D’Ambrosio, who became Sears’ CEO in February 2011, received a signing bonus of $150,000 plus a base salary of $930,769 and $8 million in stock awards, according to a filing the company made Friday with the Securities and Exchange Commission.

D’Ambrosio got another $852,037 in perks, including $803,856 for charter and commercial airfare and ground transportation to commute from greater Philadelphia, where he lives, to Hoffman Estates, Ill., where Sears is based. And he received $29,985 for temporary housing in Hoffman Estates. Sears paid part of the income taxes due on those benefits.

Of course, it’s the company’s prerogative to pay its CEO this much. But at the same time that it was doling out perks to D’Ambrosio, Sears was planning to lay off thousands of workers. Sears has announced that it will be closing 173 stores this year — up from previous estimates of 120 stores — which means that nearly 14,000 workers could be seeing a pink slip.

Adding insult to injury, Sears was also pocketing millions of dollars in tax incentives from the state of Illinois, even as it fired Illinois workers. In fact, under the terrible deal that the state signed with the retail giant, Sears can lay off another 1,750 Illinois workers without losing its taxpayer largesse. But perhaps bilking a state of its needed tax revenue is what Sears pays D’Ambrosio the big bucks for.

When Craig Dubow resigned as CEO of the nation’s largest newspaper conglomerate amid health problems last year, he ended a six-year stint that “was, by most accounts, a disaster.” Gannett, the parent company of the USA Today and 80 other American newspapers, had seen its revenue plummet $1.7 billion and its stock price fall 86 percent, from $72 a share to just over $10.

To counter those losses, Gannett shed jobs, and a lot of them. Industry estimates say the company has laid off at least 20,000 workers since 2005, reducing its workforce from 52,000 to roughly 32,000. Despite those losses, Gannett awarded Dubow a severance package worth $32 million, NPR reports:

Dubow’s final compensation package includes $12.8 million in retirement benefits, $6.2 million in disability benefits and a $5.9 million severance payment, according to the filing. Gannett stock options and restricted stock, which Dubow had accrued during his years of employment with the company, were also part of the package. Those stock awards are valued at nearly $7 million.

Separately, Gannett will pay $25,000 to $50,000 annually for a $6.2 million life insurance policy covering Dubow and another $70,000 annually for benefits such as health insurance, home computer and secretarial assistance and financial counseling. He will receive most of these benefits for three years unless he goes to work for a competitor, according to the filing.

The lavish severance package Gannett is giving Dubow stands in stark contrast with how it treated many of the 20,000 employees it let go. After giving severance packages to employees during early rounds of layoffs (a common industry practice), Gannett decided in 2009 that it would no longer offer such packages, instead paying supplemental unemployment benefits that shifted most of the costs to states. At the time, Gannett claimed the decision would help many employees get more than they would from severance. But for those who worked or freelanced at other jobs, that meant they’d get much less — and perhaps nothing at all.

“Craig championed our consumers and their ever-changing needs for news and information,” the chair of Gannett’s board of directors said when his retirement was announced in October. The question, as former reporter Peter Lewis asked at the time, is how exactly Dubow served consumers or his employees. “They laid off journalists. They cut the pay of those who remained, while demanding that they work longer hours. They closed news bureaus. They slashed newsroom budgets,” Lewis wrote on his blog. “As revenue fell, and stock prices tanked, and product quality deteriorated, they rewarded themselves huge pay raises and bonuses.”

Yesterday, ThinkProgress’ Tanya Somanader noted that Apple Inc. is breaking its profit record and sitting on nearly $100 billion in cash, while its Chinese laborers toil in unsafe and even deadly conditions. Here on the other side of the Atlantic, another huge company has decided to lock out its Canadian workers in an attempt to force them to accept pay cuts, even as it pulls in its own record profits:

Caterpillar reported a 36 per cent increase in after-tax profit for both the fourth quarter of 2011 and the full year 2011. Revenues for the year increased four per cent to $2.65 billion.

Despite the record profits, the company is pressuring its employees at the London [Ontario] locomotive plant to accept a pay cut from $32 per hour to $16.50. Caterpillar locked out the workers on Jan. 1 after union members rejected the pay cut.

While certainly not in the same league with Apple’s abuses, Caterpillar is just the latest company attempting to force workers to accept wage cuts at the same time its hauling in huge profits and paying its CEO millions. AT&T, Navistar, John Deere, and Wellpoint have all pulled the same trick in the last few years, laying off hundreds of workers. Caterpillar’s CEO, Doug Oberhelman, made $10.5 million in 2010.

“This is all about greed,” says Bob Scott, union chairman at the plant. “How are workers supposed to go back to earning wages last paid nearly 25 years ago, while the company is richer than ever?” CEOs today make about 343 times the amount earned by the typical worker.

Wall Street Pit’s Ron Haruni points out that as the banking industry’s stocks plunged this year — with major megabanks like Bank of America facing uncertain fates — their executives have walked away with sky-high salaries.

Haruni cites the work of Rochdale Securities analyst Dick Bove and shows how banks have seen their value and stocks plunge by double-digits while executive compensation remains high:

According to data from Rochdale Securities analyst Dick Bove, the heads of major banking groups including JPMorgan Chase (JPM), Goldman Sachs (GS) and Bank of America (BAC) are out-earning their employees and shareholders even as shares of bank stocks as a group lost about 26% this year.

Bove found that while the 23 financial institutions he follows saw their stock prices and market cap drop by more than 30% and 11%, respectively, bank CEO compensation averaged $7.74 million. That means the banking heads brought in 50 to 100 times the average worker. Take BofA’s CEO Brian Moynihan who will earn $2.26 million this year while his bank’s market value dropped 60% – the worst in Rochdale’s study.

Chase CEO Jamie Dimon will earn $41.9 this year — the most among the bank CEOs in Bove’s coverage list — for a bank that saw its stock lose roughly 23% this year. There’s also Goldman’s Lloyd Blankfein whose compensation was nearly $22 million, while the investment bank he runs – Wall Street’s most powerful — lost more than 46% of its market cap.

Haruni notes that press “reports have suggested that compensation pools at seven of the biggest U.S. banks will total about $156 billion (including salaries, benefits and bonuses) in 2011, which would be 3.7% higher than last year’s record breaking number.”