The financial pain of the pandemic has mainly focused on those least able to afford it – low-wage workers in people-facing industries, such as restaurant workers, airline employees and physical trainers. Knowledge workers, who have been able to continue working from home, have been less affected by the shutdown. Indeed, this group of workers has benefited – not from higher wages, but from sharply reduced costs. Without being able to spend their salaries, their saving rates have rocketed. Increasingly, reporters have adopted the term “K-shaped recovery” to describe this disparate experience of those at the top and bottom of the economy. The structure of the letter ‘K’ lends itself to this analogy, as the fortunes of those on the upward thrusting arm of the letter diverge from those on the downward-sloping leg. It is certainly a more apt analogy than that provided by, say, a V-shaped recovery, with its assumption that we are all in this together. Given that the stock market is experiencing its worst case of indigestion since March, the message is simple: the economy – and by extension the stock market – cannot flourish if a large segment of the population is left behind.
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