Lies damn lies.
Also a few statistics there somewhere too.
**TL;DR:** The Fortune article uses aggregate wage data to argue against the K-shaped economy theory, but its own data proves the opposite. 43% of workers are not keeping up with inflation, spending growth is 4x higher for top earners versus bottom, and the article even admits the economy can “continue to grow as a ‘K’”—which means the inequality thesis is accurate, not refuted.
Here’s the Fortune article if you fancy a little fiction: https://fortune.com/2025/12/30/what-is-k-shaped-economy-wages-affordability-faster-than-inflation/
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**The K-Shaped Economy Article Is Gaslighting You With Statistics**
Let me walk through this Fortune piece because it is a masterclass in using numbers to obscure rather than illuminate.
The article opens with a setup that sounds compelling. Economists say we have a “K-shaped economy,” where the rich get richer and the poor get poorer, BUT wages are up 30% since 2019 while CPI is only up 26%. Jason Furman, Obama’s former economic adviser, says this wage growth “weakens the argument” for a K-shaped recovery.
Here is the problem. The article spends its remaining paragraphs proving the exact opposite of its headline.
Let us look at the actual data the article eventually admits. The Federal Reserve Bank of Atlanta found that while 57% of workers saw wages grow faster than inflation, that means 43% did not. Fourteen percent of the workforce getting left behind is not a “weakness” in the K-shaped economy thesis. It is the K-shaped economy thesis, alive and kicking.
The spending data is even more damning to the article’s premise. Bank of America found spending in the top third of income earners increased 4% year-over-year in November, while spending from the bottom third increased less than 1%. That is not a healed economy. That is not a refuted K-shape. That IS the K-shape, drawn in permanent marker.
The category error here is staggering. Wages growing faster than inflation is a statement about aggregate purchasing power. The K-shaped economy is a statement about distribution. These are not opposing concepts. They can exist simultaneously, and in fact, they almost always do. You can have a rising tide that lifts most boats while leaving a substantial minority beached. The aggregate “wages up 30%” figure tells you nothing about whether that growth was evenly distributed or concentrated at the top.
And here is what the article completely ignores. The composition of the workforce. The 57% figure covers all workers, but the bottom quartile of earners has seen wage growth drop to just 3.5%, barely above 2.7% inflation. Meanwhile, those making more already have higher base wages, so a 4.5% raise for them represents significantly more absolute dollars than a 3.5% raise for someone making less.
The Indeed Hiring Lab data shows the pandemic-era anomaly where low-wage workers saw rapid wage growth has reversed. We are back to the “normal” where higher-wage occupations drive headline numbers while the bottom stays barely above water. That is not a recovery from inequality. That is a return to it.
The article’s own conclusion, “From a macroeconomic perspective, higher- and middle-income households’ consumer spending accounts for the bulk of overall US consumption, so the economy can continue to grow as a ‘K’ for some time,” directly contradicts the framing of the piece. The economy CAN grow in a K-shaped pattern. That is what the K-shaped economy IS. Acknowledging this as a feature rather than a bug does not weaken the thesis. It confirms it.
What this article actually demonstrates is how economists and journalists can use aggregate statistics to create a narrative of economic health that obscures distributional pain. Yes, on average, wages have beaten inflation since 2019. But “on average” includes Bill Gates at a soup kitchen. The median worker, the person making $45,000 a year, has a fundamentally different experience than the median in the top income quartile.
The 43% of workers not keeping up with inflation are not abstract statistics. They are real people whose purchasing power is eroding while economists write blog posts about aggregate wage growth. The fact that their plight can be mentioned in a single paragraph before pivoting back to “so the economy can continue to grow” tells you everything you need to know about whose interests these metrics serve.
The K-shaped economy is not a bug in the system. The data shows it is the feature. And writing articles that obscure that reality, by framing wage growth as a refutation of inequality rather than as a metric that can coexist with it, helps ensure nothing changes for the 43% getting left behind.
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**Works Cited**
Bank of America. (2025). *2025 year in review*. Bank of America Institute. https://institute.bankofamerica.com/content/dam/economic-insights/2025-year-in-review.pdf
Cox, J. (2025, December 23). US GDP alive by AI capex. *Fortune*. https://fortune.com/2025/12/23/us-gdp-alive-by-ai-capex/
Federal Reserve Bank of Atlanta. (2025). *Wage growth tracker*. https://www.atlfed.org/chcs/wage-growth-tracker
Furman, J. (2025, December 24). Former CEA chair less convinced about this K-shaped recovery than other people are [Video]. In *Squawk Box*. CNBC. https://www.cnbc.com/video/2025/12/24/former-cea-chair-jason-furman-less-convinced-about-this-k-shaped-recovery-than-other-people-are.html
Leonard, J. (2025, December 30). What is K-shaped economy wages affordability faster than inflation. *Fortune*. https://fortune.com/2025/12/30/what-is-k-shaped-economy-wages-affordability-faster-than-inflation/
Slok, T. (2025, December 30). *Wages have grown faster than consumer prices*. Apollo Academy. https://www.apolloacademy.com/wages-have-grown-faster-than-consumer-prices/
Stahle, C. (2025, July 24). *July labor market update: Wage growth outpacing inflation*. Indeed Hiring Lab. https://www.hiringlab.org/2025/07/24/july-labor-market-update-wage-growth-outpacing-inflation/
U.S. Bureau of Labor Statistics. (2025). *Consumer price index*. https://www.bls.gov/cpi/
U.S. Bureau of Labor Statistics. (2025). *Employment cost index*. https://www.bls.gov/eci/