Voters often dismiss their elected officials when they perceive a lack of progress, and the mathematics of a K-shaped economy explain why Trump's supporters feel let down.

“It’s always hard to bring down prices when somebody else has screwed something up like [President Joe Biden] did,” Trump said in a news conference in early January. “We’re going to have prices down. I think you’re going to see some pretty drastic price reductions.”

Exit poll data from The November 2024 election suggests Americans resonated Trump's economic message. Exit polls revealed that a greater percentage of voters lacking college degrees and individuals earning under $100,000 annually voted for Trump, reinforcing a decade-long trend of a rightward political realignment among the working class.

However, these trends are changing again due to new economic information indicating that the K-shaped economy, which was humorously created on Twitter during the pandemic to address discussions about whether the recovery would be “U” or “V” shaped, is now a tangible phenomenon. A year into Trump 2.0, the idea of differing financial outcomes for affluent and less affluent Americans is materializing. This has severely damaged economic confidence and trust in the president, who had pledged to resolve the affordability challenges in the U.S. 

A surge of working-class voters joined the Republican party before the 2024 presidential election, yet this same demographic sent a clear signal in the early November off-year contests, electing Democrats in every contest where they were candidates. This encompassed moderate representatives Mikie Sherrill and Abigail Spanberger in New Jersey and Virginia, respectively, along with progressive democratic socialist mayors in New York and Virginia, namely Zohran Mamdani and Katie Wilson. Their shared platform was: affordability.

Economists have made it clear that something real is shifting: The rich are getting richer, and the poor are getting poorer. This week, Apollo chief economist Trosten Slok noted wage growth for the lowest-income Americans plummeted to its lowest in about a decade, while wage growth for the highest-income group surpassed all other income levels, citing data from the Federal Reserve Bank of Atlanta. Moody’s Analytics found last month that for the second quarter of 2025, the top 10% of households made up nearly 50% of all consumer spending. According to calculations by New York University economics professor Edward Nathan Wolff, the top 20% of America’s wealthiest households own nearly 93% of all stock. 

Comments from executives in third-quarter earnings made clear that the Coins2Day 500 see a “bifurcated” economy. Delta seemed almost surprised at how its premium and business travel seats are due to eclipse the main cabin in 2026, a year ahead of schedule. While McDonald’s CEO talked about a “bifurcated consumer base,” with traffic growth strong among higher-income consumers. By and large, fast-food companies boomed in the quarter while higher-priced “slop bowl” chains such as Sweetgreen, Cava and Chipotle have been struggling to arrest a decline in same-store sales as consumers trade down.

The housing market, only in recent memory a booming segment of the economy where many locked in huge equity gains at low mortgage rates, has become nearly frozen because of the “lock-in effect.” It’s simply unaffordable to sell your house and buy another one with mortgage rates above 6%. The first-time homebuyer age hit 40 years old in 2025, according to the National Association of Realtors, revealing that only people with some degree of wealth accumulated over many years of adulthood can afford to make purchases in the housing sector.

“We’ve probably made housing unaffordable for a whole generation of Americans,” The Amherst Group CEO Sean Dobson said at the ResiDay real-estate conference in New York in November, telling Coins2Day on the sidelines that people have done what they’ve been told by getting an education and good jobs “and then they didn’t get what they were promised.”

Trump’s role in the K-shaped economy

Analysts at Pantheon Macroeconomics, Samuel Tombs and Oliver Allen, noted in a September research report that diminished income growth was a result of Trump’s tariff policies, compelling companies to reduce salaries to safeguard their profit margins, which had suffered due to import duties. Some of these factors may be linked to Trump, who himself rode affordability concerns a 2024 election win that previously appeared unlikely. Following the November elections

“Data show wage growth has slowed more in the trade and transportation sector, and to a lower level, than any other major sector since the end of last year. Fears workers would be able to secure larger wage increases in response to the tariffs look highly unlikely to be realized,” the analysts wrote.

Peter Loge, a professor of media and public affairs at George Washington University, who served as senior advisor to the FDA commissioner under President Barack Obama, told Coins2Day that Trump’s economic priorities can be ascertained by whom he surrounds himself with.

“President Trump has installed very wealthy people with very senior positions in government, which isn’t a bad thing, but it’s limiting,” Loge told Coins2Day, naming in particular Elon Musk, who served as head of the Department of Government Efficiency in the administration’s first months.

Loge said the installation of these wealthy figures, as well as the courtship of powerful tech CEOs like Larry Ellison and Sam Altman, illustrates priorities to serve these individuals. The president signed a law in July for a roughly $4 trillion package of tax cuts, primarily benefiting companies and wealthy Americans. Those wealthy individuals, in turn, pour their money into the stock market, feeding the top half of the K, Loge noted.

In addition to the administration's contentious choice to halt funding for SNAP benefits while the government was shut down, millions of low-income Americans will be compelled to reapply for the benefits to fight “fraud,”, as stated by Agriculture Secretary Brooke Rollins.

But to be sure, the K-shaped economy has existed for decades, economists say, and other economic factors have little to do with the president’s policies. The “low-hire, low-fire” labor market of 2025, for example—which has in particular battered lower-income, entry-level workers such as Gen Z—is more a result of businesses becoming more conservative in their hiring and firing practices following a pandemic-era labor shortage and a hiring binge that may have gone too far during the so-called “Great Resignation.”

Changing sentiments

Lower-income Americans are observing these shifts, as consumer sentiment also splits into a K-shape. Peter Atwater, an adjunct economics professor at William & Mary, who popularized the term “K-shaped economy”, suggests this aspect is being missed in discussions about the K-shaped economy. Data from The University of Michigan’s Survey of Consumers, data, indicated that last month, the lowest income bracket expressed significantly less confidence in the U.S. Economy than the highest income bracket.

“What we have today is a small group of individuals who feel intense certainty paired with relentless power control—and on the other, it is a sea of despair,” he told Coins2Day. “And that’s the piece that never gets talked about.”

Atwater’s diagnosis rhymed with a Financial Times column from Robert Armstrong, of Unhedged, who wrote this week that America has always been unequal, but what makes this moment K-shaped is a loss of faith in future earnings among the lower-income cohort. “It could be,” he wrote, “that after five years of going nowhere, households in the bottom half of the wealth and income distributions have started to anticipate a bleaker future and are changing their spending habits accordingly.”

Nose-diving confidence in the U.S. Economy is reflected in the attitudes of Republicans and independents who voted for Trump. About 30% of Republicans believe Trump has fallen short of their expectations regarding the economy, according to a national NBC News poll this month. Two-thirds of independents blamed Trump for increasing inflation, per an ABC News/Washington Poll poll conducted in October. CNN polling data meanwhile shows Trump’s approval rating has reached its lowest level since he took office the second time.

“People want to know that they can afford a medical bill if they get sick, their kids will have a better future than they do, or have a chance of a better future,” Loge told Coins2Day. “And if voters feel like things aren’t working, they fire their politicians in charge to hire new ones.”

“Voters are pretty well saying, ‘We don’t think whatever the Republicans are doing is making stuff less expensive. We need life to be more affordable and less chaotic. It’s pretty unavoidably chaotic. Now we’re going to bring in new people to try a new thing,’” Loge said.

Following the election, Trump has observed shifting political sentiments and has put forth numerous ideas intended to alleviate consumer burdens. These include a 50-year mortgage and a $2,000 rebate checks funded by tariff income. Earlier in the month, he stated that his party hadn't adequately reassured Americans regarding the economy's condition, a point he said in a Fox News interview on.

“We learned a lot,” Trump said. “Republicans don’t talk about it. They don’t talk about the word affordability.”

Paul Donovan, chief global economist at UBS Wealth Management, cautioned that “affordability” could emerge as a persistent, perhaps unresolvable, issue in economic and political discussions. Donovan stated in his weekly blog that the idea is “subtly different” from both “inflation” and the “cost-of-living crisis.”. He further explained it's an anger stemming from the sentiment “I can’t afford that,”, a sentiment that might be difficult to refute.

“People want things (generally ‘better’ things than they currently have) and are upset that they cannot afford those things,” Donovan wrote. “This may make affordability a more enduring problem than in the past.” He added that social media “fuels resentment” about affordability, as it presents “carefully curated, idealized lifestyles” that are just out of reach to anyone with a smartphone.

Shifting political tides

Loge expressed reluctance to forecast the impact of this shifting sentiment on future elections, especially if Trump's tariffs prove effective, potentially boosting support for Republican contenders. Nevertheless, he indicated that established or current officeholders from both dominant parties might face difficulties in securing re-election. Atwater contends that the demand for and necessity of affordability extends beyond partisan affiliations.

“We, particularly those on the left and the right and the establishment, woefully underappreciate how purple the bottom is,” he said. “The unified despair, the sheer desperation on both sides of the aisle, and that will continue to lead to an anti-establishment vote,” he said.

Atwater posited that as long as Americans see an expanding disparity in wealth, consumers with lower and middle incomes will maintain animosity towards the extremely affluent, which might escalate. He referenced a 2011 study from The New England Complex Systems Institute, which connected social disturbances in North Africa and the Middle East during the 2010 Arab Spring to increasing food costs.

“This is a crisis of confidence,” Atwater said. “Sadly, those who are in the best position to address it seem at best indifferent, and that does not go unnoticed by those at the bottom.”

Nick Lichtenberg contributed reporting