5 major companies together saw their profits increase 41% during the pandemic, 8 times faster than their workers' wages, according to a new Brookings report

5 major companies together saw their profits increase 41% during the pandemic, 8 times faster than their workers' wages, according to a new Brookings report
An Amazon Labor Union (ALU) organizer greets workers outside Amazon’s LDJ5 sortation center, as employees begin voting to unionize a second warehouse in the Staten Island borough of New York City, U.S. April 25, 2022.REUTERS/Brendan McDermid
  • A new Brookings report examines how profits changed compared to wages at major companies.
  • The profits of five "winning" companies grew by 41% from January 2020 to October 2021.

The pandemic plunged the world economy into unprecedented waters as millions of workers suddenly lost their jobs.

But the economic picture wasn't dreary for everyone: Big US companies like Amazon and Target saw huge profits as the world shuttered. A new report from Brookings looked back at how those profits compared to worker pay.

According to Molly Kinder, a fellow at Brookings and one of the report's co-authors, the researchers wondered "are companies moving to a more equitable, more inclusive, fairer version of capitalism — especially in this unique pandemic moment where there's so much goodwill for workers?"

Brookings found that even as profits climbed, worker pay mostly didn't rise at the same rate. It's a familiar pandemic tale, and one that may be fueling the ever-present wave of low-wage workers quitting at near-record rates.

Brookings focused on 22 companies that have a lot of hourly frontline workers, 12 of which Bookings called "winning" companies. Kinder said they defined these winning companies as those that have "done better financially in the pandemic than they did before the pandemic."


"Three-quarters of 'winning' companies posted their most profitable years on record in 2020," the authors wrote in the report.

In fact, at five companies who "won" the pandemic profit-wise and for which Brookings had wage data, profits rose by 41% together after adjusting by inflation — but real wages rose by just 5% for workers. Those companies are Amazon, Walmart, CVS, Target, and Kroger. This means "profits rose at eight times the pace of worker wages," per the report.

Kinder told Insider that with the Great Resignation and rising pay, it may seem like hourly, lower-wage workers are "really the ones doing the best in this economy."

However, "gains for low-wage workers are not nearly what you'd expect given all those headlines," Kinder said. "Inflation has taken such a huge bite out of those gains. And really the pay gains were very modest."

Kinder said when they talk to these workers, they say "these headlines don't match our experience." They don't feel like they're getting ahead when they go to pay for groceries or gas, she said.


Take Amazon, for instance. After adjusting for inflation, Amazon saw 94% profit growth, a massive increase compared to the increase of real wages for workers of just 10%.

"Wages are up even at the most successful companies modestly," Kinder said. "If you think about a two-year time horizon, on average, they're up 5%. Today, that number would be less."

Workers at an Amazon warehouse in Staten Island voted earlier this month to unionize, a first for the company. One of their demands: A $30 minimum wage.

At Target, inflation-adjusted profits grew by 73%. At the same time, real wages grew by just 3%; according to the EPI and Shift wage tracker, 82% of Target workers make $14 to $16 an hour.

Meanwhile, at Walmart, profits rose by 6%, after adjusting for inflation. At the same time, real wages increased by 9%, making Walmart the only one of the five companies highlighted by Brookings with a larger wage than profit gain. According to a new company wage tracker from the left-leaning Economic Policy Institute and the The Shift Project, 51% of Walmart workers make less than $15 an hour.


At CVS, inflation-adjusted profits grew by 17%, while real wages increased by 3%. The EPI and Shift wage tracker finds that 32% of CVS workers made less than $15 an hour.

"Throughout the pandemic, we made several bonus payments to our pharmacists and other essential workers to recognize their important contributions supporting the communities we serve," a CVS spokesperson said in a comment to Insider. "We also committed to raise our enterprise minimum hourly wage to $15 by July 2022."

Kroger's profits rose by 59% after inflation, while real wages rose by just 1%. Thousands of Krogers workers in Colorado went on strike earlier this year, and some won an over $5 an hour raise.

Amazon, Target, Walmart, and Kroger did not respond to Insider's request for comment.

Even though workers at all five of those "winning" companies did see a pay bump bigger than inflation since the start of 2020, rising prices could still take a bite out of those raises.


"Workers really feel like the actual purchasing power of those wage increases has been dramatically eroded because of inflation," Kinder said even though she said most companies that they looked at raised wages.

Importantly, "a lot of these companies started with such low pay that even if you raise pay 4% in real terms, it's on such a low starting wage that still these workers, even with those pay raises, most of them can't pay their bills."