The Widening Divide: Economist Peter Atwater on the K-shaped Recovery and Income Inequality

Since the outbreak of COVID-19, economists have been discussing the recovery of the United States as a K-shaped one. This means that high-income individuals are bouncing back faster than those with lower incomes. However, Peter Atwater, who first coined the term “K-shaped recovery,” believes that economic inequality has worsened since the initial recovery period. He explains how those at the top and bottom of the income pyramid have become even more divided.

Atwater joins us to discuss his thoughts on why income inequality has grown, why wage gains for low-income workers don’t tell the whole story, and the dangers of a K-shaped economy. He also shares which letter of the alphabet he thinks best represents a healthy economy.

We also cover some current events, including a recent Oklahoma Supreme Court decision regarding a publicly funded religious charter school and how fragile global shipping supply chains could impact Federal Reserve decisions on interest rates.

Later in the show, we hear from a listener who shares their experience of adapting their home to accommodate living with friends. We also give a special shout-out for Susanna’s wedding anniversary.

Listeners are encouraged to send in questions and comments to [makemesmart@marketplace.org](mailto:makemesmart@marketplace.org) or leave a voicemail at 508-U-B-SMART.