The sluggish economy has been more sluggish for some than others.
The median earnings of working class people fell more than 4 percent between 2007 and 2010, according to an analysis of Census data prepared for Bloomberg. That’s while college-educated professionals or managers saw median earnings jump nearly 2 percent.
The findings add evidence to a widely reported trend — that the recession’s losses and the recovery’s gains have actually hit middle class and poorer Americans harder than the rich and corporate elite. S&P 500 companies made an average of $420,000 per employee last year, according to a Wall Street Journal analysis from earlier this year. That’s a full ninth more than in 2007 before the recession. Top Wall Street CEOs also saw pay grow by 20 percent.
Meanwhile, real wages for American workers fell two percent, once accounting for inflation, according to a recent report from the Bureau of Labor Statistics. In addition, the share of new income that labor took continues to drop.
Such a drop in wages could be why many American workers have little savings to speak of. Nearly one-third of workers have less than $1,000 in savings and another third say they have some money saved, but it’s less than $25,000, according to a survey from earlier this year.
Workers’ lack of savings may only exacerbate America’s large wealth gap. The top 1 percent of earners saw their wealth jump by 275 percent between 1979 and 2007, according to a Congressional Budget Office report from October. During the same period the bottom fifth of earners saw their incomes grow 20 percent.
Yet that’s not to say that the rich didn’t feel the effects of the global financial crisis. On average, the 400 highest-income tax filers raked in 25 percent less in 2009 than they did the year before.