Source: Fortune.com
Summary
US Treasury Secretary Scott Bessent declared the K-shaped economy is over, citing a 2% real wage gain for the bottom 25% of workers. However, data from the Federal Reserve Bank of Atlanta and other sources suggests that wage growth by income percentile does not support this notion. The K-shaped economy, where higher earners thrive while lower earners lag, remains intact. Bessent attributed the improvement to White House policies, including the One Big Beautiful Bill Act, which aimed to give Americans earning between $15,000 and $80,000 an average tax cut of 15%. Despite Bessent’s optimism, current drivers of wealth gains, such as equities, are concentrated among higher earners.
Our Reading
The numbers tell one story.
Scott Bessent’s declaration that the K-shaped economy is over seems premature, as data from the Federal Reserve Bank of Atlanta and other sources indicates that wage growth by income percentile has not changed significantly. The Treasury Secretary’s optimism may be based on selective data, such as the 2% real wage gain for the bottom 25% of workers. However, this gain is not enough to offset the broader trend of wealth concentration among higher earners. The K-shaped economy remains a reality, with the well-to-do thriving and everyone else lagging.
Mark Zandi’s observation that “the K-shaped economy—with the well-to-do thriving and everyone else lagging—remains firmly intact” is a more accurate reflection of the current economic situation.
Author: Evan Null
