For Immediate Release: Thursday, May 03, 2012
Contact: Phoebe Silag or Karen Conner, news@epi.org 202-775-8810
It’s executives and the finance sector causing surging 1% income growth
In a new blog post, It’s executives and the finance sector causing surging 1% income growth!, EPI President Lawrence Mishel explains how the rise of executive compensation and finance-sector compensation contributed to the increase of the share of the total income held by the top 1.0 percent. Between 1979 and 2005, it more than doubled, from 9.7 percent to 21.0 percent, with most of the increase occurring since 1993. The top 0.1 percent more than tripled its income share, from 3.3 percent to 10.3 percent, accounting for more than 60 percent of the overall 11.2 percentage-point rise in the income share of the entire top 1.0 percent.
Today’s Snapshot illustrates that these income gains were not widely felt, as CEOs fared far better than the typical worker over the last several decades. From 1978–2011, CEO compensation grew more than 725 percent, substantially more than the stock market and remarkably more than the annual compensation of a typical private-sector worker, which grew a meager 5.7 percent. The CEO-to-worker compensation ratio in 2011 was 231.0 (calculated with options realized) or 209.4 (calculated with options granted).
Both analyses present data from the forthcoming 12th edition of The State of Working America, scheduled to be released this August.