K-shaped economy

A K-shaped economy describes a post-crisis recovery where different segments of the economy (or society) diverge sharply in their performance, forming the two arms of the letter "K":

• The upper arm (↑): Sectors, industries, companies, or individuals that thrive or recover quickly.
  Examples:
  • Tech giants (e.g., Apple, Amazon, Google)
  • High-income professionals (remote workers, investors in stocks)
  • Asset owners (stocks, real estate soared during/after COVID)
• The lower arm (↓): Sectors or groups that struggle, decline, or recover slowly.
  Examples:
  • Small businesses (restaurants, retail, travel)
  • Low-wage service workers (hospitality, gig economy)
  • Lower-income households (lost jobs, no savings)

Key Characteristics

Feature	Upper Arm	Lower Arm
Income/Wealth	Growing (stocks, bonuses, property)	Stagnant or falling
Job Security	High (remote-capable, skilled)	Low (in-person, replaceable)
Policy Impact	Benefits from QE, low rates	Hurt by inflation, layoffs
Long-term Outcome	Widening inequality	Risk of permanent scarring

Real-World Example: COVID-19 (2020–2023)

• Upper arm: S&P 500 hit record highs; tech layoffs were minor; remote workers saved on commuting.
• Lower arm: 22 million U.S. jobs lost in early 2020; hospitality still below pre-COVID levels years later; eviction crises.