Rebucci: Wealthy households spend 40% more than bottom tier

Voters heading to the polls this November face a disconnect between national economic data and their personal financial experiences. Alessandro Rebucci, an economics professor at Johns Hopkins Carey Business School, stated that voters judge the economy based on their own cost of living rather than aggregate statistics. He noted that while the overall economy appears strong, the distribution of that wealth drives current voter sentiment.

The term "K-shaped economy" describes this divergence. It illustrates a graph where high-income earners and asset owners see gains while middle and lower-income earners do not. Rebucci specified that the wealthiest households spend significantly more than the lowest ones. This spending gap exists not just in absolute dollars, but as a share of income and total wealth.

President Donald Trump has repeatedly claimed the U.S. economy is thriving. At a rally in Las Vegas on Aug. 5, he declared, "The economy is the greatest economy we’ve ever had, by far." These claims often conflict with recent consumer surveys showing lower confidence among voters. Historical patterns suggest the party in power typically asserts economic strength during election cycles, regardless of individual voter perceptions.

Rebucci argued that Americans have long accepted economic inequality. He said the system is "comfortable with inequality." The goal, he explained, is not to eliminate that inequality entirely but to adjust the system so people can live better within it. He emphasized that the most important perception for the public is the belief that they have a shot at reaching the top 10% or top 1% of earners.

The midterm elections are scheduled to take place later this month. Candidates continue to debate economic policies that address cost of living and wealth distribution. The contrast between macroeconomic indicators and household-level spending remains a central theme in campaign rhetoric. Voters will weigh these factors as they cast their ballots for the U.S. House of Representatives.