Millionaires captured 53% of NYC income growth since 2019; poverty hit a record third straight year. The K-shaped split drives political change from Mayor Mamdani's election to rising safety net use.
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Millionaires captured more than half of all of New York City's income growth since the pandemic. Poverty hit a record high for the third straight year in 2024. The two lines trace a K – the few pulling away, the many falling behind.
Mayor Zohran Mamdani's election victory and his rising national profile reflect the political force of that divergence, economist Peter Atwater told The City Reporter. Atwater popularized the K-shaped economy concept in 2020.
"The reason the K-shaped economy matters isn't because of what it says about wages or wealth, what it says about how people feel and their life experience," Atwater said. "Today, those at the top feel invulnerable. They have an overabundance in everything that matters. Meanwhile, those at the bottom feel increasingly powerless and uncertain. They see scarcity in every direction they turn."
Treasury Secretary Scott Bessent dismissed the idea on CNBC last month, arguing that wages are growing fastest for low-paying jobs. The claim does not hold for New York City, James Parrott, senior advisor to the Center for New York City Affairs at the New School, said in an email.
"The way finance and tech are growing today, coupled with wage stagnation for most workers, makes the post-pandemic NYC economy more polarized than ever," Parrott said.
The top 1%, roughly 40,700 millionaires, captured 53% of income growth over five years. Since 2019, the rate of income growth accelerated for the wealthiest while it slowed for everyone else. The city's poverty rate climbed to double the national level, according to data compiled by The City Reporter.
More New Yorkers are turning to federal and state aid for health insurance and food, even as thousands lose access because of federal cuts to Medicaid and new work requirements for SNAP benefits. Cash assistance enrollment has climbed steadily.
"The cost of living in New York City, quite frankly, even if you had a full-time job and weren't on SNAP benefits, it's very challenging these days," said Lakisha Morris, division director for food and housing stability at Catholic Charities. "You're making decisions on whether three of us are going to eat tonight or I'm just going to feed my two kids. There is no immediate relief."
The housing market captures the divide most sharply. Manhattan saw overall home sales fall 8.2% over the last year, yet contracts for $5 million and $10 million-plus homes proliferated. "I would expect to have an increase in home sales at that price point this year, even as the total number of sales in New York is flat," Mike Simonsen, chief economist at COMPASS, a real estate brokerage, said.
A full 69% of New York households rent their homes. Rents have climbed faster than incomes, pushing more people into severe rent burden – spending half or more of their income on housing. Only high-wage industries, the top 20% of workers, saw hourly wage growth outpace inflation. Middle-wage workers saw their incomes stagnate or decline from 2024 to 2025.
"It's basically the almost-disappearance of the middle class. You're either poor or rich," said Mohamed Obaidy, economist and associate director of the Center for NYC Affairs. "These are characteristics of developing countries. What this means for New York City is we're coming backwards and becoming more of a developing country."
Most new jobs added since the pandemic paid low wages, with exceptions in healthcare. High-wage sectors like finance, tech, and consulting added comparatively few roles, capturing the largest share of wage growth in the last two years. Not a single industry's average wage covers the cost of raising a child. In two-person households with one working adult, only those in management, professional, or tech industries can support a child. With two working adults, most industries pay enough, some lower-wage ones still do not.
"The K-shape may be the defining symbol of the city's economy," Parrott said.
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