Are we living in a K-shaped economy?
Make Me Smart
Marketplace
4.6 • 5.5K Ratings
🗓️ 26 June 2024
⏱️ 21 minutes
🧾️ Download transcript
Summary
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. On the show today, Peter Atwater, president of Financial Insyghts and adjunct professor at the College of William & Mary, 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.
Then, we’ll get into how the fragility of global shipping supply chains could be playing into Federal Reserve decisions on interest rates. 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.
Transcript
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| 0:00.0 | All right. |
| 0:01.0 | Let's hit it. |
| 0:02.0 | Hey everybody, I'm Kyle Rizdahl. |
| 0:07.0 | Welcome back to Make Me Smart, where none of us is as smart as all. |
| 0:14.1 | And I'm Kimberly Adams. |
| 0:15.1 | Thanks for joining us on this Tuesday. |
| 0:17.2 | As many of you will recall, following the recession that was caused by the COVID-19 pandemic, we talked a lot on this show about the K-shaped recovery. |
| 0:26.4 | Basically, this idea that high-income Americans bounced back a lot quicker than folks at the lower end of the income scales, hence the K in K-shaped. |
| 0:36.4 | And what we've been wondering is whether that phenomenon is still with us today. |
| 0:40.8 | Have we gone from a K-shaped recovery to just basically living in a |
| 0:45.0 | K-shaped economy? Here to make us smart I paused because the answer to that I |
| 0:52.0 | think is yes but we'll talk about that. |
| 0:53.4 | You're gonna make a smart on this is the person who coined the phrase K-shaped |
| 0:56.7 | recovery back in 2020. Peter Atwater is the president of the market |
| 0:59.9 | research firm Financial Insights, all of a sudden an adjunct professor of economics |
| 1:03.6 | at the College of William and Mary. |
| 1:05.2 | You're welcome to the podcast. |
| 1:06.1 | Good to have you on. |
| 1:07.4 | Thank you very much. |
| 1:08.4 | So did this come to you in the middle of the night, one night? |
| 1:10.5 | The K shape of what's going on? |
| 1:13.0 | No, actually it came because I was watching all these other economists choose letters. |
... |
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