#10 – Corporate Profits Hit Record High as Top 0.1% Earnings and Wall Street Bonuses Skyrocket

by Shealeigh
Published: Last Updated on

Corporate profits rose to an “all-time high” in 2022, producing an explosion in income for the very wealthy, Jake Johnson reported for Common Dreams in a series of 2022 articles. In August 2022, Johnson explained that non-financial corporate profits in the second quarter of 2022 hit two trillion dollars, an increase of 8.1 percent from the same period in 2021 and their highest level since 1950. In December 2022, Johnson reported on research by the Economic Policy Institute (EPI) that showed the earnings of the wealthiest 0.1 percent in the United States grew by 465 percent between 1979 and 2021 while the income of the bottom 90 percent grew less than 29 percent.

One reason profits are booming is that companies have been using inflation as cover to raise prices and gouge consumers. In late 2022, inflation in the United States was the highest it had been in forty years. According to Rakeen Mabud, chief economist at the Groundwork Collaborative, “Astronomical corporate profits confirm what corporate executives have been telling us on earning calls over and over again: They’re making a lot of money by charging people more, and they don’t plan on bringing prices down anytime soon.”

The fossil fuel industry has enjoyed especially lavish profits. As Jessica Corbett reported for Common Dreams in July 2022, the eight largest oil companies’ profits spiked 235 percent between the second quarter of 2021 and the second quarter of 2022, resulting in a combined $52 billion profit, according to an analysis by Accountable.US. ExxonMobil profited $17.85 billion; Chevron, $11.62 billion; and Shell, $11.47 billion. Notably, in 2021-2022, the oil and gas industry spent more than $200 million lobbying Congress to oppose climate action.

As Johnson reported in December 2022, the main beneficiaries of big corporations’ windfall profits have been the ultrarich. He cited EPI data showing that the average income of someone in the bottom 90 percent of the workforce in 2021 was $36,571, while the average income of the wealthiest 0.1 percent that same year was $3,312,693, or more than ninety times as much. In 1979, this discrepancy was not nearly so great, with someone in the bottom 90 percent earning $28,415, while the average individual in the top 0.1 percent earned $586,222, or 20.6 times as much. As of 2021, the share of wealth earned by the 0.1 percent had hit a historic high, while the wealth of the bottom 90 percent had sunk to a record low.

The very rich—billionaires and multimillionaires—are getting wealthier at a faster rate than even the merely wealthy. The top 0.1 percent made about 1.6 percent of all annual earnings in 1979, but by 2021, that share had increased to 5.9 percent, more than tripling the slice of the total national income captured by the ultrarich.

Bloated bonuses for Wall Street bankers and stockbrokers added to the enormous sums being raked in by the rich in 2020 and 2021. In March 2022, Johnson reported on an analysis by Inequality.org of New York State Comptroller data that found the average bonus for Wall Street employees rose an astounding 1,743 percent between 1985 and 2021. In 2021 alone, Wall Street bonuses grew 20 percent, far outpacing inflation at 7 percent, and nominal private sector earnings at 4.2 percent. That year Wall Street bonuses, in aggregate, amounted to $45 billion, the highest since 2006 [Note: Wall Street bonuses fell by 26 percent in 2022, partly due to rising interest rates and growing recession fears; see, for example, Jeanne Sahadi, “The Average Wall Street Bonus Fell By 26% Last Year,” CNN, March 30, 2023]. Had the minimum wage increased at the same rate as Wall Street bonuses, it would now be $61.75 per hour.]

The establishment media have reported intermittently on record corporate profits, but this coverage has tended to downplay corporate use of inflation as a pretext for hiking prices. In August 2022, for example, Bloomberg observed that “a measure of US profit margins has reached its widest since 1950,” but its report did not mention the two trillion dollar figure. In June 2022, ABC News aired a rare package examining the debate among economists over whether “elevated corporate profits” might be contributing to inflation. The same month the New York Times published a lengthy article on the disagreement among economists about the relationship of corporate profits to “greedflation.” The Times quoted experts from EPI and Groundwork Collaborative but refused to draw any firm conclusions.

The EPI study on the accelerating incomes of the ultrarich was virtually ignored by the corporate media, although Insider referenced it in a story about how a coming recession might hurt the wealthy most.

Establishment press coverage of the massive bonuses awarded to Wall Street employees in 2021 has been scant. Reuters ran a story on it, as did the New York Post. CNN Business noted that “high bonuses are also good news for Gotham’s tax coffers.”

Jake Johnson, “‘All of Us Are Paying the Price’ as Corporate Profits Surge to Record-High $2 Trillion,” Common Dreams, August 26, 2022; republished as “Corporate Profits Surge to an All-Time High of $2 Trillion,” Truthout, August 26, 2022.

Jake Johnson, “Fueling Inequality, Earnings of Top 0.1% in US Have Soared by 465% Since 1979: Analysis,” Common Dreams, December 21, 2022

Jessica Corbett, “Price Gouging at the Pump Results in 235% Profit Jump for Big Oil: Analysis,” Common Dreams, July 29, 2022.

Jake Johnson, “‘Jaw-Dropping’: Wall Street Bonuses Have Soared 1,743% Since 1985,” Common Dreams, March 23, 2022.

Student Researcher: Annie Koruga (Ohlone College)

Faculty Evaluator: Robin Takahashi (Ohlone College)