Are we living in a K-shaped economy?
In the wake of the COVID-19 recession, many economists were describing the United States’ economic recovery as K-shaped. Basically, high-income Americans bounced back quicker than those at the lower end of the income scale.
So, did we ever ditch that K shape? The person who coined the phrase “K-shaped recovery” back then, says no.
“I think we’ve just gotten worse,” said Peter Atwater, president of Financial Insyghts and adjunct professor at the College of William & Mary. “Those at the top of the economic pyramid and those at the bottom have become even more divided.”
On the show today, Atwater explains why he believes economic inequality has grown since the pandemic recovery, why considerable wage gains for low-wage workers tell only part of the story and the risks of letting a K-shaped economy run wild. Plus, which letter of the alphabet would best represent a healthy economy?
Then, we’ll unpack an Oklahoma Supreme Court decision on a publicly funded religious charter school. And, we’ll get into how the fragility of global shipping supply chains could be playing into Federal Reserve decisions on interest rates.
Later, a listener shares what led them to begin adapting their home to suit living with friends. And, happy wedding anniversary, Susanna!
Here’s everything we talked about today:
- “The ‘K’ Is Not OK” from LinkedIn
- “Inflation Is Bringing Back the K-Shaped Economy” from Bloomberg
- “Behind America’s divided economy: Booming luxury travel and a jump in ‘relief’ loans” from CNBC
- “A tight labor market and state minimum wage increases boosted low-end wage growth between 2019 and 2023” from the Economic Policy Institute
- “U.S. Wealth Inequality: Gaps Remain Despite Widespread Wealth Gains” from the St. Louis Federal Reserve
- “First publicly funded religious charter school in US ruled unconstitutional” from The Hill
- “Fed’s Bowman Warns of Upside Risks to Inflation, Not Time to Cut” from Bloomberg
- “Supply Chain Under Strain as Houthis Intensify Red Sea Strikes” from The New York Times
- Support Make Me Smart: Marketplace.org/givesmart
We love to hear from you. Send your questions and comments to makemesmart@marketplace.org or leave us a voicemail at 508-U-B-SMART.
None of us is as smart as all of us.
No matter how bananapants your day is, “Make Me Smart” is here to help you through it all— 5 days a week.
It’s never just a one-way conversation. Your questions, reactions, and donations are a vital part of the show. And we’re grateful for every single one.
