Treasury Secretary Scott Bessent proposes a C-shaped economy to describe current economic trends.
Treasury Secretary Scott Bessent stated that he is tired of hearing about the "K-shaped economy" and believes the letter C is a better description of the current economic state. This shift in terminology reflects a move toward a more optimistic view of how lower- and middle-class Americans are faring.
Show the rest of this summary
Originally, the K-shaped economy term was used to describe a situation where the rich were getting richer while the poor were getting poorer. This trend became prominent during the pandemic as government stimulus programs ended and poverty rates rose from 7.8% in 2021 to 12.4% in 2022. However, economists note that the term is often used loosely to describe any form of inequality. Bessent's C-shaped economy refers to a more optimistic outlook where wage growth is converging at the lower end of the wage scale. After accounting for inflation, weekly earnings rose at the lower end of the wage scale while falling at the upper end. This suggests a narrowing of wage inequality, though some experts argue that the wealth gap remains significant, with the top one percent of Americans owning one-third of the country's wealth.