In the alphabet soup of typical economic recoveries — think V-shaped, or W, Z, U and L — the one thing that’s common to the ending is that, for better or worse, everyone comes out together, at the same spot in the curve.
The COVID-19 economy, however, is creating a K-shaped recovery, and it’s growing increasingly obvious that both the business world and individuals will come away further divided — split wide like the right side of a K — than ever before.
Call them lucky versus unfortunate, haves and have-nots, or winners and losers, but there seems to be less middle ground in this recovery than in any we’ve seen before.
Economists will tell you that the K-shaped recovery has always been there — every downturn has its survivors and its casualties — but it has become dramatically more pronounced with the pandemic.
From the standpoint of the economy, the “K-covery” is evident in the fortunes of large-cap companies and tech stocks, the small passel of businesses that have carried the stock market to record highs while the majority of issues are stumbling along.
While many experts expect small-cap stocks to pick up as the recovery broadens, the small-business wipeouts on Main Streets across the country will take years to overcome.
Meanwhile, for consumers and investors, it’s a story of divergent fortunes based largely around the type of job people have and how much their work has been affected by the pandemic.
