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.