Michael R. Strain, Columnist

K-Shaped Recoveries End Well for Everybody

It’s normal for rebounds to help the affluent first. But rest assured: Lower-wage workers catch up.

October 5, 2020 at 11:00 AM UTC

Michael R. Strain is a Bloomberg Opinion columnist. He is director of economic policy studies and Arthur F. Burns Scholar in Political Economy at the American Enterprise Institute. He is the author of “The American Dream Is Not Dead: (But Populism Could Kill It).”

They’ll catch up.
Photographer: Jim Young/Bloomberg

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There’s a lot of chatter about which letter of the alphabet will represent the shape of the eventual recovery from the pandemic recession. Hopeful politicians predict a V, representing a rebound as robust as the downturn was calamitous. Pessimists forecast a U, in which the U.S. economy would wallow in terrible shape for some time. A recovery followed by a second slump would look like a W.

K has emerged as a leading contender. The idea is that upper-income households will experience a rapid and strong recovery, while those with lower incomes keep losing ground.