NYC's K-Shaped Economy: Top 1% Capture 53% of Income Growth, Poverty Hits Record
New York City's economy has become increasingly divided, with the wealthiest 1%—approximately 40,700 millionaires—accounting for 53% of income growth over the past five years. Meanwhile, poverty has soared to unprecedented levels for the third year in a row in 2024, now twice the national average. This economic disparity, characterized as a K-shaped economy by economist Peter Atwater in 2020, is reflected in the political landscape, notably in Mayor Zohran Mamdani's election. Although Treasury Secretary Scott Bessent rejected the K-shaped economy concept, evidence from The City Reporter indicates its ongoing relevance. The real estate sector is struggling, with a decline of 8.2% in Manhattan's housing market, and rent increases are outpacing income growth, causing significant financial strain.
Key facts
- Top 1% (40,700 millionaires) captured 53% of NYC income growth over five years.
- Poverty rate in NYC reached record high for third consecutive year in 2024, double the national rate.
- K-shaped economy concept popularized in 2020 by economist Peter Atwater.
- Mayor Zohran Mamdani's election reflects political impact of economic inequality.
- Treasury Secretary Scott Bessent claims K-shaped economy is over, but NYC data contradicts.
- Manhattan housing market saw 8.2% loss, but ultra-luxury home contracts and listings proliferated.
- 69% of NYC households rent; rent costs outpaced income growth.
- Only high-wage industries saw wage growth outpace inflation; middle-wage workers stagnated.
- No single industry's average wage covers the cost of supporting a child in NYC.
Entities
Institutions
- The City Reporter
- William & Mary
- CNBC
- The New School
- Center for New York City Affairs
- Catholic Charities
- COMPASS
- NYC Comptroller
Locations
- New York City
- Manhattan
- United States