Victor Khosla Warns of Deepening K-Shaped Economic Divide Amid Record Corporate Gains and Wage Stagnation

Victor Khosla has issued a stark warning about the current state of the global economy, asserting that the world is operating in a 'K-shaped' environment where economic gains are increasingly concentrated among a narrow segment of the population. He pointed to divergent trends in income, asset values, and employment outcomes as evidence of a system where the wealthy and asset-owning classes continue to thrive while average workers see little improvement in real wages or job security. Key indicators reinforce Khosla's analysis: corporate earnings in the S&P 500 rose by 12.3% year-over-year in Q3 2025, driven by gains in technology and financial sectors, while median household income growth in the U.S. remained flat at just 0.8% over the same period. The top 10% of earners captured 56% of all income growth since 2020, according to federal data, despite representing less than 10% of the population. Meanwhile, unemployment rates in high-skill occupations fell to 2.1%, compared to 5.4% in service and manufacturing sectors, underscoring the labor market's bifurcation. This divergence is reflected in asset performance as well. The Nasdaq Composite gained 24% in 2025, led by tech giants like Microsoft, Nvidia, and Alphabet, whose market caps collectively exceeded $12 trillion. In contrast, consumer spending growth has stagnated, with retail sales rising only 1.2% in real terms over the past 12 months, signaling weak demand from the middle and lower income brackets. The implications are significant. Policymakers face growing pressure to address inequality, while investors are increasingly cautious about overconcentration in tech and financial assets. Employers in lower-wage sectors may struggle to retain talent as wage gaps widen, and consumer demand could falter if income inequality persists.