- by New Deal democrat
Financial pundit Lance Roberts recently wrote an article entitled, “K-shaped economy: reality or media driven perception,” in which he argued:
Everyone “knows” wealth concentration is worse than ever. As I laid out in my earlier piece on the K-shaped economy and why the middle class moved up, the income story runs in the opposite direction from the coverage.
The wealth story is stranger still. Pull the Federal Reserve’s Distributional Financial Accounts and compute it yourself, and the top 10% share of household net worth peaked at 70.3% in the first quarter of 2019. It sits at 67.9% today. The bottom 50% share bottomed at 0.4% in late 2011, was 1.7% at the end of 2019, and is 2.5% now.
When looking at wealth concentrations, it is very easy to blame those at the top of the wealth pyramid. Yes, the top 10% of the population held a 31.8% share of economic wealth in the fourth quarter of 2025. Yet, the bottom half gains since 2019 came almost entirely from the 90th to 99th percentiles, which fell from 39.7% to 36.3%. In plain English, the professional class lost relative ground, not the working class. Such is a detail that changes who you think is complaining.
Furthermore, the recovery that no one called K-shaped was far worse. Between 2007 and 2016, median wealth for the bottom 30% of families fell 31%, while the top 10% fully recovered.7 Saez found the top 1% captured 91% of real income growth from 2009 to 2012. Nobody ran a K headline in 2013. The data was uglier then.
Since my approach to Roberts, who typically writes from a right-wing perspective, is not “is he wrong,” but rather “*how* is he wrong,” I checked his work.
First, as I recall, while they may not have called it a “K-shaped” economy, there were plenty of articles in thew first five years of the last expansion about the inequality of wealth and spending. But as per my usual practice, I went back ands independently looked at the numbers.
Roberts says that “the middle class moved up.” That’s certainly true if we look at real median incomes, which increased 42% from $61,910 in 1984 to $87,460 in 2025, as per the Census Bureau data that were just updated last week:
But that data only takes us up to 9 months ago, whereas most of the “K-shaped” commentary is from this year. And according to Motio Research, on a YoY basis real median household income in August was actually down -0.1%:
Ands yet according to the weekly Redbook Index, as well as the monthly data, retail sales YoY growth has actually accelerated this year:
As I’ve pointed out a number of times, the stock market has been up about 15%-20% this year, driving a lot of “wealth effect” spending. And owns stocks? The top 1% own an outright slight majority, with another 27% being owned by the 90th to 99th percentile, for a total of 88%:
And Roberts’s story on wealth distribution is problematic as well. While it’s true that the combined bottom 90% have a bigger share of total wealth than 2019, as confirmed in the below graph:
The year 2019 is not that relevant to the spending pattern in the past several years. If we look at the changes in wealth shares since July 2023, a very different picture emerges:
The top 1%, and even more drastically, the top 0.1% of the wealth distribution have been running away with the growth, while the bottom 50%, and even more the 50th to 90th%, have been losing ground. And that divergence accelerated this year.
This is the continuation of a long term trend that goes back at least until the early 1990s:
The real post-pandemic tale is told by the following two graphs, of the absolute nominal levels of wealth held by each percentile. Thew first norms each level to 2019:
The share of net worth held by the bottom 50% increased sharply in the immediate post-pandemic aftermath, buoyed by stimulus payments and big increases in wages supported by the white hot labor economy.
But since mid-2022, the gains have been totally lopsided:
The nominal wealth of the bottom 50% is up 17.0%, and the next 40% up 23.1%, while the 90th-99th% is up 30.5%, the top 1% is up 42.4%, and the top 0.1% is up 46.6%, vs. 8.8% for the CPI. And we know that real income has declined in the past year, with real aggregate payrolls barely up at all. Since house price growth has stalled, and as per the above lower income households own very few stocks, the likelihood is that this year their amount of real net wealth owned has stalled if not declined as well.
In short: yes, Virginia, the K-shaped economy is real.
