🕳️ Seattle’s economic k-hole

Seattle’s Economy Is in a K-Hole

The word “affordability” is everywhere right now – and I don’t have to tell our readers about the stretch on budgets. Economists have created another phrase to talk about the growing wealth gap and cratering of the middle class: a “K-shaped economy.” KUOW says this explains the closures or bankruptcies of businesses in Washington catering to middle-class customers: think Eddie Bauer, Blazing Bagels, and Wild Waves. [KUOW]

• Businesses geared toward the wealthy are growing: The top 10% of earners are responsible for almost half of consumer spending in the U.S. This is a historic high. For example, KUOW spoke to Oasis Luxury Yacht Charters, which is turning a tidy profit. Charters for the 70-foot, 1,800-square-foot boat start at $1,000 an hour. Prices go up when customers want to ‘sail-gate’ a big Husky game.
• Is a K-shaped economy really such a bad thing? Some argue that the K-shaped economy means more families are moving up the economic ladder. It’s true that the share of American families in the upper-income bracket has increased, but —and I’d say it’s a big but — the share of households in the low-income bracket has also increased. Economists say that a hollowed-out middle creates a more fragile economy on both ends.
• Vulnerability to economic disruptions: The closure of Wallingford’s beloved Blue Star Cafe & Pub is an example of this. Rising rent for the business, coupled with decreased spending by the middle-class customers they catered to, led to a ‘squeeze’ that they couldn’t survive. The K-shape means middle-income consumers are more sensitive to job losses (see all of Seattle’s recent layoffs), and the rich, who make up more of the spending, are more susceptible to swings in real asset markets. Yikes.

🚫 UW removes director of Middle East Center: Though he remains a professor, Aria Fani, an associate professor in UW’s Jackson School of International Studies, was fired as director of the university’s Middle East Center. This termination took place after he sent messages on the center’s listserv that criticized the U.S. and Israel’s military action against Iran and called Zionism “cancerous.” [Seattle Times]

⛴️ WA Ferries cancels contract for ticketing upgrades: A Washington State Ferries project manager caught contractors by surprise when they terminated a standing $8 million contract to upgrade and modernize ferry ticketing and reservations. Spending on the project has totaled $3 million so far, and it’s unclear how much would be recoverable under new contracts. In 2023, then-Governor Jay Inslee pledged a nine-point plan to upgrade ferry reliability and jumpstart crew availability. [Washington State Standard]

💳 Seattle Met sale and layoffs: Parent company SagaCity sold Seattle Met and Portland Monthly to pay off the company’s debts. The sale was finalized last month. The new Michigan-based owner, Hour Media, laid off senior staff at both the publications, including both Seattle’s and Portland’s Editors-in-Chief (EIC). Before Seattle’s EIC Eric Nusbaum was laid off, the editorial staff at Seattle Met was already down to six people. [The Stranger]