The K-shaped economy maj 2026

We’ve moved from income world to wealth world

Passive wealth gains increasingly matter more than earnings for one’s standing in society

Concerns about wealth inequality have grown in recent years. Standard measures of wealth inequality tell us how evenly wealth is distributed in relative terms. 

This is an important concept but just as important, if not more so, is the extent to which one can move up or down that distribution.

In a society where the gap between the comfortably off and the just-getting-started can be crossed in a decade or two of hard work, success feels attainable and incentives are strong. 

When those gaps are so wide that even a lifetime of striving doesn’t offer the prospect of feeling you’ve “made it”, things start to break down.

It has surely played a role in the build-up of resentment towards those at the top, whether billionaires or accidental property millionaires.

John Burn-Murdoch Financial Times 31 July 2026

America’s economy has been split in two for a long time. In 1989, households in the top 10% of earnings held 32% of America’s overall wealth, according to the Federal Reserve.

By 2025, that number had climbed to 68%.

There’s a name for the phenomenon: the K-shaped economy. The rich keep getting richer, and everyone else is getting left behind, at least by comparison.

The K has gotten significantly wider recently – particularly over the past 3 years since the inflation crisis. 

But it’s not just about how much people make: It’s about what they own and how they spend their money.

CNN 29 May 2026

https://edition.cnn.com/2026/05/29/business/why-americas-rich-keep-getting-richer

What is a K-shaped economy?

In the 1960s and ‘70s, the US had a robust middle class, and the national income distribution looked like a bell curve

https://englundmacro.blogspot.com/2026/02/bessent-kill-line-and-k-shaped-economy.html

The wealthiest 10% of American households—those making more than $250,000 a year, roughly—are now responsible for half of all US consumer spending.

https://englundmacro.blogspot.com/2025/03/who-exactly-is-buying-all-of-this-stuff.html

Bessent, the ‘Kill-Line’ and the K-shaped economy

US Treasury Secretary Scott Bessent was at a loss last week when a reporter with China’s largest state-run media conglomerate pressed him on something called “the kill line” — a phrase that seemed to mean little to anyone else monitoring the press briefing.

https://englundmacro.blogspot.com/2026/02/bessent-kill-line-and-k-shaped-economy.html