The K-shaped Economy: Addendum

Here's a quick addendum to my previous post about the k-shaped economy.

This realization was driven in large part by conversations with co-workers on the topic.

The assumptions

For a thought exercise, let's assume the changes over the decades in the executive-to-worker pay ratio simply never happened, and executives today are still pulling a salary at a similar ratio to what they got in 1940.

As a reminder, James A. Stack - the credit control executive (notably, not a CEO) for a textile importing firm - got paid $5000 per year in 1940. That's roughly 4 times the median U.S. worker's salary at the time ($1226 in 1939, according to data from Census.gov, and $1368 in 1940, according to data from archives.gov).

The median weekly salary for U.S. workers in 2025 was $1204, according to a press release from the Bureau of Labor Statistics. Since I'm a U.S. worker who gets paid roughly the median salary, I can afford a calculator 🤣

My calculator tells me that works out to $62,608 per year. Funny how, in less than a century, a median worker goes from $1200 per year to $1200 per week.

Anyway, multiply that 2025 median annual salary by 4, and you get $250,432. So in our thought exercise where everybody's wages inflate in equal proportion, Mr. Stack would be earning a quarter mill per year. Nice chunk of change, but not an outrageous salary.

The crown jewel of his collection - that Class III 1804 dollar - just sold in December 2025 for a $5 million hammer price + 20% buyer's premium = a total of $6 million.

The Class III 1804 dollar from the James A. Stack collection, sold at auction in Dec 2025.

Photo by Stack's Bowers Galleries.

The auction house stated that James A. Stack was not related to Joseph and Morton Stack,

the original founders of Stack's Rare Coins.

Remember also that plenty of other valuable coins were sold in the James A. Stack auction, a few of which sold for hundreds of thousands apiece. So it's not like Mr. Stack only bought one expensive coin; he built a marvelous collection of fine specimens.

The realization

If the executive-to-worker pay ratio hadn't changed over time, James A. Stack wouldn't be able to afford his own coin!!!

If that doesn't demonstrate that something is off-kilter, I don't know what does...