... A key measure of wealth concentration called the Gini coefficient sits at 60-year highs, according to a report from U.S. Bank published earlier this month. ... The net worth of America’s top 1% hit a record share of nearly 32% in the third quarter of 2025, the Federal Reserve reported. By comparison, the bottom 50% cumulatively held 2.5% of overall net wealth.
The portion of U.S. GDP heading to workers in the form of compensation tumbled to its lowest level in its more than 75-year history, per data tracked by the Bureau of Labor Statistics. That means the average nonfarm business worker is seeing an increasingly small slice of an economy that has largely boomed over the last 15 years. ...
Total relative “outlays” — a broad measure of spending and nonmortgage payments — by U.S. consumers in the top 20% hit multidecade highs last year, a data analysis conducted by Moody’s Analytics found. The other 80% tumbled to new lows, the data shows. ...
While the “K-shape” term became popularized as an explanation for the uneven economic recovery seen during the pandemic, economists say the origins of this breakaway can be traced back decades earlier.
This type of diverging economy stems from the economic reorganization seen during the Reagan administration, according to Joe Brusuelas, chief economist at tax firm RSM. About two decades later, the structural break that created the K-shaped economy, as it’s now understood, was more clearly observed in the wake of the Global Financial Crisis of the late 2000s, he said.
That was in part due to the loss of wealth tied to the historic housing market crash, Brusuelas said. On top of that, he said the jump in joblessness limited earnings potential for those without steady employment in their prime working years.
The Great Recession “created the conditions for the winner-take-all economy that emerged in its aftermath,” said Brusuelas, who first heard the K-shape term around 2008. “If you live, work and inhabit certain portions of the economy, you might as well live on the dark side of the moon compared to what goes on down-market.” ...
To make meaningful inroads, the U.S. would instead need to focus on tax reform and expanding social safety nets, according to RSM’s Brusuelas. ...
