In the ever-evolving landscape of economic disparities, New York City has emerged as a vivid illustration of a K-shaped economy. While consumer trends often originate in California, the reality in New York reveals an even sharper divergence between the affluent and the impoverished. With an alarming rise in income inequality, NYC’s economic landscape signals urgent calls for reform, notably through the leadership of Mayor Mandami, who is gaining significant traction in his push for economic justice.
This article presents insightful data that underscores these dynamics, although formatting issues have limited the presentation of interactive charts. While they remain accessible, they may not appear as polished as desired.
By Nancy Jiang, an intern at The City Reporter. Originally published at The City Reporter
Millionaires accounted for over half of all income growth in New York City since the onset of the pandemic.
The city’s poverty rate continues to climb, significantly exceeding the national average.
Profits from Wall Street have reached new heights.
The number of New Yorkers relying on cash assistance and SNAP benefits has hit record levels.
The data illustrates a K shape: an upward curve representing the financial gains of a select few, contrasted by a downward slope that reflects the deteriorating circumstances of many others.
The K-shaped economy, a concept highlighted by economist Peter Atwater in 2020, is not just a local concern but a national one.
The recent electoral wins of Mayor Zohran Mamdani and his fellow democratic socialists demonstrate that its effects extend beyond simple economic metrics.
The Rich ‘Feel Invulnerable’
“The K-shaped economy matters not just for what it reveals about wages or wealth, but for how it shapes individual life experiences,” Atwater shared with The City Reporter.
“Those at the top feel invulnerable, possessing an excess of critical resources, while those at the bottom experience growing powerlessness and uncertainty in a landscape of scarcity,” he continued.
In contrast, officials from the Trump administration have downplayed the significance of the K-shaped economy.
“I can state definitively that the K-shaped economy is over,” Treasury Secretary Scott Bessent claimed on CNBC’s “Squawk Box,” suggesting that wages for low-paying jobs are surging.
However, this phenomenon doesn’t reflect the realities of New York City.
“The growth of finance and tech, combined with stagnating wages for most workers, has made New York City’s post-pandemic economy more divided than ever,” remarked James Parrott, senior advisor to the Center for New York City Affairs at the New School in an email.
The evidence presented in this article suggests that the K shape may well encapsulate the defining features of the city’s economy.
Below are various data charts highlighting New York City’s pronounced K-shaped economy, focusing on income, the growing dependence on safety net benefits, and the disparity in real estate ownership.
Growing Income Inequality and Poverty
The city’s wealthiest 1%, comprising approximately 40,700 millionaires, accounted for 53% of income growth over the past five years. Since 2019, income growth for this demographic has accelerated, while it has slowed for the rest.
Poverty has also reached alarming levels, doubling the national average for the third consecutive year in 2024.
An increasing number of New Yorkers are relying on federal and state assistance for health coverage and food. Despite this, many are losing access to crucial programs. While enrollment for cash assistance continues to climb, thousands are at risk of losing benefits due to federal Medicaid cuts and restrictive work requirements for SNAP.
“The high cost of living in New York City presents significant challenges, even for those working full-time and not relying on SNAP benefits,” stated Lakisha Morris, division director for food and housing stability at Catholic Charities.
“People find themselves making heartbreaking choices, such as whether to provide meals for their family tonight or just feed their children. These are the harsh realities many face today. Immediate relief is nowhere in sight, and higher-paying jobs are increasingly rare,” she lamented.
In stark contrast, the top 1% continues to prosper, with the dream of homeownership slipping further out of reach for younger generations.
Speaking of Home Ownership…
The real estate market in New York manifests distress as the booming luxury segment leaves many residents struggling to find affordable housing. For instance, Manhattan experienced an 8.2% drop in its overall housing market over the past year, yet the ultra-luxury segment has flourished, with homes exceeding $5 million and $10 million becoming increasingly common.
“I anticipate that luxury home sales will increase this year, even though overall sales figures in New York remain flat,” predicted Mike Simonsen, chief economist at COMPASS, a real estate brokerage.
“Current dynamics suggest that significant changes in policy or macroeconomic conditions are necessary for any real shift,” he added.
With 69% of households renting, as reported in a 2024 document by the city comptroller, rental costs have consistently outpaced income growth.
As a result, more New Yorkers are slipping into lower income brackets and becoming severely rent-burdened, spending over half of their income on housing expenses.
‘You’re Either Poor or Rich’
Only high-wage sectors, representing the top 20% of earners, experienced wage growth that exceeded inflation. In contrast, middle-wage workers have seen stagnation or decline in their income from 2024 to 2025, while top earners have seized nearly all wage increases.
“This trend signifies the near-disappearance of the middle class. You’re either poor or rich,” remarked Mohamed Obaidy, economist and associate director at the Center for NYC Affairs.
“These conditions are reminiscent of developing countries. New York City is regressing, increasingly resembling a developing nation,” he asserted.
The job market has largely featured low-wage positions, with notable exceptions in healthcare. Growth in high-wage sectors has been sluggish, adding relatively few jobs.
However, higher-wage fields like finance, tech, and consulting have seen notable job and wage growth in recent years.
The Price Tag For NYC Kids
This landscape necessitates that households must have working adults in high-paying industries to sustain a living wage adequate for raising a child. No single industry average salary covers the costs associated with child-rearing. In two-income households, only those employed in management, professional, or tech roles can adequately provide for children. When one adult is employed, the average wages in many industries fall short.
Greg David and Kennedy Sessions contributed to this story.
