The K-shaped world we live in – the top 20% are doing well, everyone else, not so good….

For a good introduction to the consequences of this heist take a look at this 9 minute report from PBS 10.14.2025:

The K-shaped economy: Why the wealthy are thriving as most Americans fall behind

The 20/80 split of income classes differs from my 10/90 analysis, but broadly, that’s OK. My only real quibble with Paul Solman’s reporting comes at the end when the standard orthodox economic apology floats to the surface once again. Solman and Mark Zandi share this:

“Making 50, 75 K a year here in the U.S., your standard of living, just given the improvements in technologies and everything else, is probably as good as the Hearsts were back 100 years ago when they were in their castle.”

The issue at hand is not a comparison with conditions a hundred years ago.

How do we explain these facts? Our economy has grown enormously over the past fifty years, yet for the vast majority, incomes have risen only ~16% in real terms. How do we account for a per capita GDP in 1975 of $27,500 that grew to $63,400 in 2020 (constant 2020 dollars). That is a more than doubling (127%) in 45 years, even accounting for a population that grew from 216 million to 331 million over that same period. How do we explain that a prime-age worker in the middle of the population only experienced a 16% increase in real income between 1975 and 2018?¹

And, keep in mind that for the thirty years following WWII, workers and the middle class broadly shared increases in productivity across the board. These were the years in which a single breadwinner supported a middle-class family in the suburbs.

So, take 9 minutes now to watch this very informative reporting:

The K-shaped economy: Why the wealthy are thriving as most Americans fall behind