U.S Workers say the economy needs more support
BetaWired - November 15, 2014 - Jean Andre an American activist decided to visit the Federal Reserve Board’s headquarters on Friday to express his concerns about getting a decent job. Janet L....
BetaWired - November 15, 2014 - Jean Andre an American activist decided to visit the Federal Reserve Board’s headquarters on Friday to express his concerns about getting a decent job. Janet L. Yellen, the Fed’s chairwoman, agreed to meet him together with about 30 workers concerning the plight of Americans searching for work and struggling to make a living.
Accompanied by Fed’s board of governors officials; Stanley Fischer, the vice chairman; Lael Brainard; and Jerome H. Powell, the jobless Americans had a chance to express their views for about an hour.
Ady Barkan, a lawyer with the Center for Popular Democracy, an advocacy group based in New York that orchestrated the meeting said “The Federal Reserve is too important of an institution to be insulated from the voices and perspectives of working families, we think that the Fed needs to listen more and be more responsive, and we’re very grateful for this first opportunity.”
The Fed declined to comment, citing a policy of silence about private meetings but the workers described what they said in the meeting that was closed to the media. Ady Barkan’s group is campaigning for the Fed to carry on with its stimulus program, citing the high level of unemployment, particularly in minority communities, and the slow pace of wage growth. The group further argued that the Fed could help drive wages up by keeping interest rates low.
According to Josh Bivens, an economist at the Economic Policy Institute, a liberal research group, “monetary policy would be “the single most important determinant of wage growth” and that he was glad to see workers recognize the Fed’s importance. A conservative group, American Principles in Action, criticized the meeting as “highly political” and inappropriate expressing that it would seek a related meeting to share its view that the Fed’s stimulus campaign is damaging the economy.
The labor and community groups at the meeting wore green T-shirts that said “What Recovery?” on the front, with a chart demonstrating meager wage gains on the back. They also compelled Yellen to change the way the Fed chooses the presidents of its regional banks.
On Thursday, The Federal Reserve Bank of Dallas stated that its president, Richard W. Fisher, would step down on March 19 2015. Furthermore, Charles I. Plosser, president of the Federal Reserve Bank of Philadelphia, plans to retire at the beginning of March.
Source
America’s Biggest Corporations Are Quietly Boosting Trump's Hate Agenda
America’s Biggest Corporations Are Quietly Boosting Trump's Hate Agenda
Corporate Backers of Hate campaign calls on companies to end practices that benefit from Trump's agenda...
...
Corporate Backers of Hate campaign calls on companies to end practices that benefit from Trump's agenda...
Read full article here.
NYC Youth, Council Members Call on City to Address Bullying and Conflict in Schools by Increasing Social and Mental Health Support, not Policing
10.30.2017
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10.30.2017
Onyx Walker, Youth Leader from Urban Youth Collaborative alongside Council Members Daniel Dromm and Mark Levine at the steps of City Hall before the NYC Council hearing on bullying to demand social and mental health support for NYC public schools, not policing.New York, NY - On Monday, October 30th, young people from the Urban Youth Collaborative, along with NYC Council Chair of Education Committee Daniel Dromm, Council Member Mark Levine, and organizations -- including Dignity in School Campaign New York and the Center for Popular Democracy--held a press conference in front of City Hall to call on New York City to address bullying and conflict in schools by increasing social, emotional, and mental health supports, not policing and punitive zero tolerance policies. The young people are calling for drastically increasing the number of guidance counselors, restorative practices and mental health supports in schools.
The press conference coincided with the release of a new report, “Young People’s Vision for Safe, Supportive, and Inclusive Schools,” written by the Center for Popular Democracy and Urban Youth Collaborative, whose organizational members include young people from Future of Tomorrow, Make the Road New York, Sistas and Brothas United. The report recommendations were developed by youth leaders who have spent years organizing to transform their schools and their communities. In response to calls to return to discriminatory and ineffective school climate strategies, young people are advancing solutions that reimagine school safety and reduce bullying and discrimination by prioritizing and allocating funding for meeting their social, emotional, and mental health needs. Study after study shows policing and exclusionary discipline does not create safer schools, and in fact, can make students feel less safe and harm our most vulnerable students. In contrast, the supports students are calling for reduce bullying and create safer schools. Immediately following the press conference there was a a New York City Council hearing on Bullying, Discrimination, and Harassment in Schools.
Young people are uniquely situated to lead the dialogue in developing truly safe and inclusive learning communities. The blueprint highlights key priorities for all NYC schools, including: increasing the number of trained and supervised full time guidance counselors and social workers; implementation of restorative justice practice in all underserved schools and; comprehensive mental supports for young people. Young people are at the forefront of a growing movement to demand New York City divest from ineffective, costly and racially discriminatory policing practices – and instead invest in creating schools that respond to student needs and create truly safe and inclusive schools. .
"Too often, I have seen a lack of support for students, myself included, because there is a lack of guidance counselors in schools. On average there is one full time guidance counselor for every 407 students. We need to significantly increase the number of guidance counselors. By having one guidance counselor for every 100 students, a counselor’s workload will not only lessen, but the depth of the relationships they have with students will deepen" said Maybelen Navarro, Youth Leader, Urban Youth Collaborative.
“We don’t have to look very far to develop solutions that create safe and inclusive school communities. Time and time again we are reminded that young people are the best resource we have for developing successful and sustainable policies for every school in every neighborhood.” said Roberto Cabanas the Coordinator for the Urban Youth Collaborative. “Today we release this Policy Brief to share young people’s vision for their schools. We need more counselors, restorative practices, and mental health care.”
“The city must be bold enough to reimagine safety so that it is rooted in effective and humane practices of support rather than policing” said Kate Terenzi, Equal Justice Works Fellow at the Center for Popular Democracy. “Young people hold the answer to how to create inclusive and safe schools. Their solutions - guidance counselors, mental health services, and restorative justice - are proven effective by research and young people’s own expertise in navigating school environments. Placing more police and metal detectors won’t make school safer, social and mental health support will do that. ”
"It is imperative that we bolster social, emotional, and mental health support structures in NYC public schools," said NYC Council Education Committee Chairperson Daniel Dromm. "Metal detectors, increased policing and zero tolerance policies do nothing for the thousands of children affected by bullying year-round. These measures only contribute to the problem, creating hostile school climates that are not conducive to learning. To effectively push back against bullying, we must increase the number of school guidance counselors, employ restorative justice practices and offer comprehensive mental health services across the five boroughs. As Chairperson of the NYC Council Education Committee, I am committed to doing all that I can to end school bullying by moving our schools in this direction"
In addition, the report calls the city to reverse policies that have proven ineffective at creating safe and supportive environments for students policies that promote the exclusion and criminalization of Students. In particular, New York City should end arrests, as well as the issuance of summonses and juvenile reports, in schools for non-criminal violations and misdemeanors; institute a moratorium on the installation of new metal detectors in schools, and remove existing metal detectors; and, remove police officers from schools.
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PHOTOS: LINK
LIVESTREAM VIDEO: LINK
TESTIMONIES: Young People’s and the Center for Popular Democracy’s
Contact: Roberto Cabanas, Urban Youth Collaborative 973.432.2406 or Roberto.Urbanyouthcollab@gmail.com
www.urbanyouthcollaborative.org
The Urban Youth Collaborative is led by students young people and brings together New York City students to fight for real education reform that puts students first. Demanding a high-quality education for all students, young people struggle for social, economic, and racial justice in the city’s schools and communities. Organizational members include: Make the Road New York, Sistas and Brothas United, and Future of Tomorrow
www.populardemocracy.org
Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda
Still We Rise march peacefully denounces inequality
Despite a week of police-related violence, Still We Rise: The 2016 People’s March peacefully trailed through downtown Pittsburgh Friday afternoon, filling the streets with bright colors and music...
Despite a week of police-related violence, Still We Rise: The 2016 People’s March peacefully trailed through downtown Pittsburgh Friday afternoon, filling the streets with bright colors and music in the process.
About 40 organizations — including New York Communities for Change, Common Good Ohio and Action United — and more than 1,000 people marched from the David L. Lawrence Convention Center to the Station Square office of Sen. Pat Toomey, R-PA, in protest of inequality and hate.
Friday’s march was part of the People’s Convention — a two-day convention discussing social issues such as climate justice, immigration and economic inequality. The Center for Popular Democracy and CPD Action presented the convention, which runs Friday through Saturday at the Convention Center.
Emily Terrana from Open Buffalo, a civic initiative in Buffalo, New York, focused on improving equity and justice, said collaborative actions show “the outside world” and people within the organizations the importance of their work.
“It really shows how much power we have when we come together,” Terrana said. “Oftentimes, folks can feel really isolated in the work that they do. [Actions like the march] give life to one another so that we can continue to exist and fight on.”
La’tasha Mayes, the executive director of New Voices Pittsburgh: Women of Color for Reproductive Justice and a Pitt alum, said marches such as Still We Rise are important because “we have so far to go” on social issues.
“Every time you have an action like this, it’s to bring awareness,” Mayes said. “It’s supposed to mobilize people who are most impacted by these issues. We have to have leaders, we have to have advocates, we have to have organizers to make a difference.”
A large phoenix puppet with a 35-foot wingspan was at the head of the march. The CPD asked KT Tierney, a Pitt alum, and a group of others who make puppets for marches and similar events. Tierney said the phoenix, which also appeared on flags and shirts organizers distributed to demonstrators, symbolizes rising from the ashes.
“People face oppression, and from that oppression, they can still triumph,” Tierney said. “It’s kind of a rebirth.”
Before reaching its final destination, the march leaders stopped at several Downtown locations to protest corporate and governmental offices. Among the stops were the Allegheny County Courthouse, Bank of New York Mellon, the U.S. Steel Tower — where protesters held signs decrying UPMC’s treatment of employees — and the Federal Reserve Bank of Cleveland offices.
JoEllen Chernow, the director of special projects at CPD, said the CPD has been planning the convention for a year, while the march has been in development for about five months.
“This is a really important moment for people to be coming together,” Chernow said. “People are afraid already in their communities. These [issues] are things keeping every one of these people up at night.”
Before reaching Station Square, marchers crossed the Smithfield Street Bridge and waved to kayakers in the Monongahela River. A sign reading “Stop Oil Trains” floated across the water, tied to each of the kayaks.
Outside of Toomey’s offices, a wall of Styrofoam “Toomey stones” served as the backdrop for a series of speakers, including Teresa Hill of Action United and Debbie Soto of Organize Now from Orlando, Florida.
The wall of Toomey stones read, “Here lie profits over people, homophobia, divisive politics and empty promises, racism and hate, climate change denial.” Following the speeches, members of the crowd cheered as the wall fell, symbolizing the necessity of overcoming institutional obstacles.
As part of the march’s finale, rappers Jasiri X, LiveFromTheCity and Tyhir Frost performed as representatives of 1Hood Media, a Pittsburgh collective of socially conscious hip-hop artists and activists.
“When we say ‘Black Lives Matter,’ we’re not saying only black lives matter,” Jasiri said before starting his performance. “We say ‘Black Lives Matter’ because if you watch the news, if you watch television, it’s black people that are being shot down.”
The march and convention happened to coincide with the fatal police shootings of Alton Sterling and Philando Castile, which sparked controversy after videos connected to the incidents went viral on social media.
Micah Johnson, a black man angered by the deaths of Sterling and Castile, shot and killed five Dallas police officers, injuring seven other officers and two civilians during a Black Lives Matter march Thursday night.
On Friday afternoon, Mayor Bill Peduto announced plans to hold a communitywide peace summit next week “to work together to address fear and violence.” Peduto, in collaboration with Allegheny County Executive Rich Fitzgerald, plans to gather leaders in law enforcement, faith-based organizations, activist groups, corporations and government.
“We are all affected by the violence in our communities — whether it be here in Pittsburgh, in Dallas or so many other cities — and we all must do everything we can to stop it,” Peduto said in a release. “Pittsburgh is a strong and resilient place, and our bonds are even stronger when all of us in the city work together.”
The Pittsburgh Downtown Partnership will also host a Town Hall meeting July 13 with the city police to discuss Downtown stakeholders’ safety concerns.
Renata Pumarol of New York Communities for Change said the organizations behind Still We Rise, as well as the individual demonstrators, were there to “learn from each other” and show they are a “strong force.”
“We wanted to take to the streets to send a big message here that we’re stronger than ever,” Pumarol said. “We face the same issues across the nation. It’s very important for us to be united and fight together.”
By Alexa Bakalarski
Source
Seattle Scales Back Tax in Face of Amazon’s Revolt, but Tensions Linger
Seattle Scales Back Tax in Face of Amazon’s Revolt, but Tensions Linger
Ms. Kniech was one of more than 50 local lawmakers in the United States who sent an open letter to Seattle leaders and residents on Monday supporting the tax and criticizing Amazon’s resistance to...
Ms. Kniech was one of more than 50 local lawmakers in the United States who sent an open letter to Seattle leaders and residents on Monday supporting the tax and criticizing Amazon’s resistance to it. “By threatening Seattle over this tax, Amazon is sending a message to all of our cities: we play by our own rules,” the letter said.
Read the full article here.
One of Facebook’s founders is taking on the Federal Reserve
Dustin Moskovitz and his wife, Cari Tuna, have become billionaires since he started the behemoth social networking site with his former Harvard University roommate Mark Zuckerberg. (Moskovitz left...
Dustin Moskovitz and his wife, Cari Tuna, have become billionaires since he started the behemoth social networking site with his former Harvard University roommate Mark Zuckerberg. (Moskovitz left the company in 2008 to found Asana, which streamlines task management). The couple is bringing Silicon Valley-style analytics to the world of philanthropy through their fund, Good Ventures.
The goal is to find and incubate projects with the potential to create the most change for every dollar of funding. Many of the fund’s initiatives tread traditional charitable ground. Good Ventures has backed research on the connection between crime, cannabis and incarceration and helped stop the spread of drug-resistant malarial parasites in Myanmar.
But the group is also broadening its reach into public policy issues, including macroeconomics. It has granted $850,000 to the Center for Popular Democracy over the past year to fund a campaign urging the Fed not to raise its target interest rate until the economy is much stronger. Good Ventures is the single largest backer of the campaign -- dubbed Fed Up -- whose budget this year is about $1 million.
“The central reason we believe that marginally more dovish Fed policy relative to the current baseline would carry net benefits is that, at roughly their current rates, we see unemployment as more costly in humanitarian terms than inflation,” Good Ventures wrote explaining its decision to fund the project. “Dovish” policy generally supports lower interest rates, while a “hawkish” stance would raise them.
The funding has helped the group expand its presence at an annual symposium of economic elite that kicked off Thursday here in the foothills of the Grand Tetons and sponsored by the Federal Reserve Bank of Kansas City. The group arrived at the conference last year with a handful of workersholding up signs and wearing green T-shirts.
This year, Fed Up held “teach-ins” in a meeting room at the same hotel as the Fed’s conference and drew prominent economists such as Nobel Prize winner Joseph Stiglitz, University of California-Berkeley professor Brad DeLong and Center for Economic and Policy Research Co-Director Dean Baker.
The campaign also flew in dozens of workers to underscore the disparity in the nation’s economic recovery. Wage growth has remained stagnant for years, and unemployment among black and Hispanic workers is significantly higher than that of whites.
“An economy that doesn’t deliver for most of its citizens is a failed economy,” Stiglitz said in a press conference in Jackson Hole.
Monetary policy has not traditionally been subject to populist activism, and Good Ventures acknowledges that the success of the campaign is uncertain at best. Fed Up is also working to increase public input in the selection of regional Fed presidents, an effort that Good Ventures rates as more unequivocably positive and, at the very least, easier to measure.
But, the funders note, if the campaign works -- and if easy money is indeed the way to go -- the payoff could be massive:
Our best guess is that the campaign is unlikely to have an impact on the Fed's monetary policy, but that if it does, the benefits from a tighter labor market would be very large; we think this small chance of a large positive impact is sufficient to justify the grant.
However, this is an unusually complex policy area, and we could be mistaken.
Source: Washington Post
Seattle Unanimously Passes an 'Amazon Tax' to Fund Affordable Housing
Seattle Unanimously Passes an 'Amazon Tax' to Fund Affordable Housing
Nearly 40 elected city officials from all corners of the U.S., including from metros bracing for Amazon HQ2 like Boston, Chicago, Denver, Los Angeles, Miami, New York City, and Washington, D.C.,...
Nearly 40 elected city officials from all corners of the U.S., including from metros bracing for Amazon HQ2 like Boston, Chicago, Denver, Los Angeles, Miami, New York City, and Washington, D.C., signed an open letter on Monday urging Seattle City Council to stay the course and criticizing Amazon’s tactics during the head tax debate.” “This is particularly concerning to us given Amazon’s approach to the competition for HQ2, in which the company has promoted a bidding war of jurisdictions competing with each other to offer greater incentive packages,” the letter read. “If Amazon were serious about its support for strong affordable housing solutions, it would fully back this tax proposal and chip in to help address Seattle’s homelessness crisis. By threatening Seattle over this tax, Amazon is sending a message to all of our cities: We play by our own rules.”
Read the full article here.
Fed Officials Say a September Rate Increase Is Still on the Table
The comments, uncoordinated but generally consistent, suggested that some investors and analysts had been too quick to discount a September rate increase, particularly as global markets finished...
The comments, uncoordinated but generally consistent, suggested that some investors and analysts had been too quick to discount a September rate increase, particularly as global markets finished the week on a relatively quiet note on Friday.
“We haven’t made a decision yet, and I don’t think we should,” Stanley Fischer, the Fed’s vice chairman and a close adviser to the Fed chairwoman, Janet L. Yellen, said in an interview with the cable network CNBC. “We’ve got time to wait and see the incoming data and see what exactly is going on now in the economy.”
The Fed’s policy-making committee is scheduled to meet Sept. 16 and 17.
Mr. Fischer offered an upbeat assessment of the domestic economy. He described job growth as “impressive” and said there had been a “pretty strong case” to raise rates in September before the latest round of global turmoil. He did not sound inclined to wait much longer than September to start raising rates.
“We’re getting back to normal and at some point we will want to show that, by beginning to normalize interest rates,” he said, speaking during a break at the annual conference hosted here by the Federal Reserve Bank of Kansas City.
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta and a centrist on the Federal Open Market Committee, told Bloomberg that he saw roughly even odds of a September rate increase. But if the Fed did choose to wait, he said it wouldn’t be for long — he suggested that it could raise rates at its next meeting in October.
James Bullard, president of the Federal Reserve Bank of St. Louis, said in an interview that he was reserving final judgment, but that he did not see strong reasons for the Fed to delay. “I would like to see the whole panoply of data before I make a decision but I’m certainly leaning in that direction,” Mr. Bullard said.
The march toward higher rates has inflamed some critics who argue that the central bank should continue or even expand its stimulus campaign.
Joseph Stiglitz, a Columbia University economist and Nobel laureate, said Thursday that the Fed was on the verge of repeating an old mistake by raising interest rates sooner than necessary to control inflation. He pointed out that the share of Americans with jobs remained unusually small and wages were rising only slowly.
“There hasn’t been a recovery for the majority of Americans and so to me this is a no-brainer,” Mr. Stiglitz told a coalition of community groups who call themselves “Fed Up” that met just outside the main conference to advocate against a rate increase. “I don’t even know why we’re talking about” tightening monetary policy, he said.
The Fed’s preferred measure of inflation was updated on Friday. The new data showed that prices rose just 0.3 percent during the 12 months that ended in July. A narrower measure excluding food and oil prices, which the Fed regards as more predictive, increased by 1.2 percent over that period. The Fed aims to maintain inflation at a 2 percent annual pace, a goal it has not achieved for several years.
Mr. Stiglitz said the Fed should try to keep inflation at about 4 percent a year. Even with a stated target of 2 percent a year, he said, actual inflation is significantly lower. “We wind up with a monetary policy that has been consistently too tight,” he said.
Most Fed officials say they expect inflation to increase as the economy expands. Mr. Fischer said on Friday that his confidence was “pretty high” that inflation would rebound.
Still, Mr. Fischer said there was a continuing “discussion” among Fed officials, some of whom see the strength of domestic growth as a reason to raise rates, while others argue the sluggishness of inflation means there is no reason to rush.
Mr. Bullard, a member of the first camp, said that he viewed recent global economic developments as unlikely to change his economic forecast. The sharp fall of oil prices and the decline of long-term interest rates should increase growth, while a stronger dollar and a weaker global economy are likely to have an offsetting impact.
“I want to take the time I have between now and the September meeting to evaluate all the economic information that’s come in, including recent volatility in markets and the reasons behind that,” Loretta Mester, president of the Federal Reserve Bank of Cleveland, told The Wall Street Journal. “But it hasn’t so far changed my basic outlook that the U.S. economy is solid and it could support an increase in interest rates.”
Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, reiterated his contrasting view that the Fed should not raise interest rates this year. Instead, he argued, the central bank should consider expanding its stimulus campaign to address the persistence of low inflation, which can harm consumer spending and business plans for expansion. Mr. Kocherlakota said the volatility of financial markets should be seen as further evidence of the weakness of the economy.
Both camps, however, agree that the Fed should not start raising rates in the middle of market volatility. William C. Dudley, the president of the Federal Reserve Bank of New York, said this week that the gyrations of financial markets made the case for raising rates in September “less compelling.”
Mr. Fischer in his interview Friday said he did not want to judge the current situation, because it was new. But if volatility persisted, the Fed would be less likely to move.
“If you don’t understand the market volatility, and I’m sure we don’t fully understand it now — there are many, many analyses of what’s going on — then yes, it does affect the timing of a decision you might want to make,” he said.
Both Mr. Dudley and Mr. Fischer, however, noted that the current situation might be fleeting. Mr. Fischer said markets “could settle down fairly quickly.”
And Mr. Fischer emphasized that Fed officials could not afford to wait until all of their questions were answered and all of their doubts resolved. “When the case is overwhelming,” he said, “if you wait that long, then you’ve waited too long.”
Source: New York Times
YELLEN: We're Not There Yet
Business Insider - August 22, 2014, by Myles Udland - Federal Reserve Chair Janet Yellen is speaking at the...
Business Insider - August 22, 2014, by Myles Udland - Federal Reserve Chair Janet Yellen is speaking at the Kansas City Fed's economic symposium at Jackson Hole.
Yellen's remarks are focused on the labor market, which she said still hasn't recovered from the financial crisis.
Among Yellen's notable comments include the sluggish pace of wage growth.
First, the sluggish pace of nominal and real wage growth in recent years may reflect the phenomenon of 'pent-up wage deflation,'" Yellen said. "The evidence suggests that many firms faced significant constraints in lowering compensation during the recession and the earlier part of the recovery because of 'downward nominal wage rigidity' — namely, an inability or unwillingness on the part of firms to cut nominal wages."
Yellen added that given the labor market outlook, "There is no simple recipe for appropriate policy in this context, and the FOMC is particularly attentive to the need to clearly describe the policy framework we are using to meet these challenges."
Yellen said that despite strengthening indicators in the labor market, she still sees "significant" underutilization of labor resources.
Here's the full text of Yellen's remarks:
In the five years since the end of the Great Recession, the economy has made considerable progress in recovering from the largest and most sustained loss of employment in the United States since the Great Depression.1 More jobs have now been created in the recovery than were lost in the downturn, with payroll employment in May of this year finally exceeding the previous peak in January 2008. Job gains in 2014 have averaged 230,000 a month, up from the 190,000 a month pace during the preceding two years. The unemployment rate, at 6.2 percent in July, has declined nearly 4 percentage points from its late 2009 peak. Over the past year, the unemployment rate has fallen considerably, and at a surprisingly rapid pace. These developments are encouraging, but it speaks to the depth of the damage that, five years after the end of the recession, the labor market has yet to fully recover.
The Federal Reserve's monetary policy objective is to foster maximum employment and price stability. In this regard, a key challenge is to assess just how far the economy now stands from the attainment of its maximum employment goal. Judgments concerning the size of that gap are complicated by ongoing shifts in the structure of the labor market and the possibility that the severe recession caused persistent changes in the labor market's functioning.
These and other questions about the labor market are central to the conduct of monetary policy, so I am pleased that the organizers of this year's symposium chose labor market dynamics as its theme. My colleagues on the Federal Open Market Committee (FOMC) and I look to the presentations and discussions over the next two days for insights into possible changes that are affecting the labor market. I expect, however, that our understanding of labor market developments and their potential implications for inflation will remain far from perfect. As a consequence, monetary policy ultimately must be conducted in a pragmatic manner that relies not on any particular indicator or model, but instead reflects an ongoing assessment of a wide range of information in the context of our ever-evolving understanding of the economy.
The Labor Market Recovery and Monetary Policy
In my remarks this morning, I will review a number of developments related to the functioning of the labor market that have made it more difficult to judge the remaining degree of slack. Differing interpretations of these developments affect judgments concerning the appropriate path of monetary policy. Before turning to the specifics, however, I would like to provide some context concerning the role of the labor market in shaping monetary policy over the past several years. During that time, the FOMC has maintained a highly accommodative monetary policy in pursuit of its congressionally mandated goals of maximum employment and stable prices. The Committee judged such a stance appropriate because inflation has fallen short of our 2 percent objective while the labor market, until recently, operated very far from any reasonable definition of maximum employment.
The FOMC's current program of asset purchases began when the unemployment rate stood at 8.1 percent and progress in lowering it was expected to be much slower than desired. The Committee's objective was to achieve a substantial improvement in the outlook for the labor market, and as progress toward this goal has materialized, we have reduced our pace of asset purchases and expect to complete this program in October. In addition, in December 2012, the Committee modified its forward guidance for the federal funds rate, stating that "as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored," the Committee would not even consider raising the federal funds rate above the 0 to 1/4 percent range.2 This "threshold based" forward guidance was deemed appropriate under conditions in which inflation was subdued and the economy remained unambiguously far from maximum employment.
Earlier this year, however, with the unemployment rate declining faster than had been anticipated and nearing the 6-1/2 percent threshold, the FOMC recast its forward guidance, stating that "in determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee would assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation."3 As the recovery progresses, assessments of the degree of remaining slack in the labor market need to become more nuanced because of considerable uncertainty about the level of employment consistent with the Federal Reserve's dual mandate. Indeed, in its 2012 statement on longer-run goals and monetary policy strategy, the FOMC explicitly recognized that factors determining maximum employment "may change over time and may not be directly measurable," and that assessments of the level of maximum employment "are necessarily uncertain and subject to revision."4 Accordingly, the reformulated forward guidance reaffirms the FOMC's view that policy decisions will not be based on any single indicator, but will instead take into account a wide range of information on the labor market, as well as inflation and financial developments.5
Interpreting Labor Market Surprises: Past and Future
The assessment of labor market slack is rarely simple and has been especially challenging recently. Estimates of slack necessitate difficult judgments about the magnitudes of the cyclical and structural influences affecting labor market variables, including labor force participation, the extent of part-time employment for economic reasons, and labor market flows, such as the pace of hires and quits. A considerable body of research suggests that the behavior of these and other labor market variables has changed since the Great Recession.6 Along with cyclical influences, significant structural factors have affected the labor market, including the aging of the workforce and other demographic trends, possible changes in the underlying degree of dynamism in the labor market, and the phenomenon of "polarization"--that is, the reduction in the relative number of middle-skill jobs.7
Consider first the behavior of the labor force participation rate, which has declined substantially since the end of the recession even as the unemployment rate has fallen. As a consequence, the employment-to-population ratio has increased far less over the past several years than the unemployment rate alone would indicate, based on past experience. For policymakers, the key question is: What portion of the decline in labor force participation reflects structural shifts and what portion reflects cyclical weakness in the labor market? If the cyclical component is abnormally large, relative to the unemployment rate, then it might be seen as an additional contributor to labor market slack.
Labor force participation peaked in early 2000, so its decline began well before the Great Recession. A portion of that decline clearly relates to the aging of the baby boom generation. But the pace of decline accelerated with the recession. As an accounting matter, the drop in the participation rate since 2008 can be attributed to increases in four factors: retirement, disability, school enrollment, and other reasons, including worker discouragement.8 Of these, greater worker discouragement is most directly the result of a weak labor market, so we could reasonably expect further increases in labor demand to pull a sizable share of discouraged workers back into the workforce. Indeed, the flattening out of the labor force participation rate since late last year could partly reflect discouraged workers rejoining the labor force in response to the significant improvements that we have seen in labor market conditions. If so, the cyclical shortfall in labor force participation may have diminished.
What is more difficult to determine is whether some portion of the increase in disability rates, retirements, and school enrollments since the Great Recession reflects cyclical forces. While structural factors have clearly and importantly affected each of these three trends, some portion of the decline in labor force participation resulting from these trends could be related to the recession and slow recovery and therefore might reverse in a stronger labor market.9 Disability applications and educational enrollments typically are affected by cyclical factors, and existing evidence suggests that the elevated levels of both may partly reflect perceptions of poor job prospects.10 Moreover, the rapid pace of retirements over the past few years might reflect some degree of pull-forward of future retirements in the face of a weak labor market. If so, retirements might contribute less to declining participation in the period ahead than would otherwise be expected based on the aging workforce.11
A second factor bearing on estimates of labor market slack is the elevated number of workers who are employed part time but desire full-time work (those classified as "part time for economic reasons"). At nearly 5 percent of the labor force, the number of such workers is notably larger, relative to the unemployment rate, than has been typical historically, providing another reason why the current level of the unemployment rate may understate the amount of remaining slack in the labor market. Again, however, some portion of the rise in involuntary part-time work may reflect structural rather than cyclical factors. For example, the ongoing shift in employment away from goods production and toward services, a sector which historically has used a greater portion of part-time workers, may be boosting the share of part-time jobs. Likewise, the continuing decline of middle-skill jobs, some of which could be replaced by part-time jobs, may raise the share of part-time jobs in overall employment.12 Despite these challenges in assessing where the share of those employed part time for economic reasons may settle in the long run, the sharp run-up in involuntary part-time employment during the recession and its slow decline thereafter suggest that cyclical factors are significant.
Private sector labor market flows provide additional indications of the strength of the labor market. For example, the quits rate has tended to be pro-cyclical, since more workers voluntarily quit their jobs when they are more confident about their ability to find new ones and when firms are competing more actively for new hires. Indeed, the quits rate has picked up with improvements in the labor market over the past year, but it still remains somewhat depressed relative to its level before the recession. A significant increase in job openings over the past year suggests notable improvement in labor market conditions, but the hiring rate has only partially recovered from its decline during the recession. Given the rise in job vacancies, hiring may be poised to pick up, but the failure of hiring to rise with vacancies could also indicate that firms perceive the prospects for economic growth as still insufficient to justify adding to payrolls. Alternatively, subdued hiring could indicate that firms are encountering difficulties in finding qualified job applicants. As is true of the other indicators I have discussed, labor market flows tend to reflect not only cyclical but also structural changes in the economy. Indeed, these flows may provide evidence of reduced labor market dynamism, which could prove quite persistent.13 That said, the balance of evidence leads me to conclude that weak aggregate demand has contributed significantly to the depressed levels of quits and hires during the recession and in the recovery.
One convenient way to summarize the information contained in a large number of indicators is through the use of so-called factor models. Following this methodology, Federal Reserve Board staff developed a labor market conditions index from 19 labor market indicators, including four I just discussed.14 This broadly based metric supports the conclusion that the labor market has improved significantly over the past year, but it also suggests that the decline in the unemployment rate over this period somewhat overstates the improvement in overall labor market conditions.
Finally, changes in labor compensation may also help shed light on the degree of labor market slack, although here, too, there are significant challenges in distinguishing between cyclical and structural influences. Over the past several years, wage inflation, as measured by several different indexes, has averaged about 2 percent, and there has been little evidence of any broad-based acceleration in either wages or compensation. Indeed, in real terms, wages have been about flat, growing less than labor productivity. This pattern of subdued real wage gains suggests that nominal compensation could rise more quickly without exerting any meaningful upward pressure on inflation. And, since wage movements have historically been sensitive to tightness in the labor market, the recent behavior of both nominal and real wages point to weaker labor market conditions than would be indicated by the current unemployment rate.
There are three reasons, however, why we should be cautious in drawing such a conclusion. First, the sluggish pace of nominal and real wage growth in recent years may reflect the phenomenon of "pent-up wage deflation."15 The evidence suggests that many firms faced significant constraints in lowering compensation during the recession and the earlier part of the recovery because of "downward nominal wage rigidity"--namely, an inability or unwillingness on the part of firms to cut nominal wages. To the extent that firms faced limits in reducing real and nominal wages when the labor market was exceptionally weak, they may find that now they do not need to raise wages to attract qualified workers. As a result, wages might rise relatively slowly as the labor market strengthens. If pent-up wage deflation is holding down wage growth, the current very moderate wage growth could be a misleading signal of the degree of remaining slack. Further, wages could begin to rise at a noticeably more rapid pace once pent-up wage deflation has been absorbed.
Second, wage developments reflect not only cyclical but also secular trends that have likely affected the evolution of labor's share of income in recent years. As I noted, real wages have been rising less rapidly than productivity, implying that real unit labor costs have been declining, a pattern suggesting that there is scope for nominal wages to accelerate from their recent pace without creating meaningful inflationary pressure. However, research suggests that the decline in real unit labor costs may partly reflect secular factors that predate the recession, including changing patterns of production and international trade, as well as measurement issues.16 If so, productivity growth could continue to outpace real wage gains even when the economy is again operating at its potential.
A third issue that complicates the interpretation of wage trends is the possibility that, because of the dislocations of the Great Recession, transitory wage and price pressures could emerge well before maximum sustainable employment has been reached, although they would abate over time as the economy moves back toward maximum employment.17 The argument is that workers who have suffered long-term unemployment--along with, perhaps, those who have dropped out of the labor force but would return to work in a stronger economy--face significant impediments to reemployment. In this case, further improvement in the labor market could entail stronger wage pressures for a time before maximum employment has been attained.18
Implications of Labor Market Developments for Monetary Policy
The focus of my remarks to this point has been on the functioning of the labor market and how cyclical and structural influences have complicated the task of determining the state of the economy relative to the FOMC's objective of maximum employment. In my remaining time, I will turn to the special challenges that these difficulties in assessing the labor market pose for evaluating the appropriate stance of monetary policy.
Any discussion of appropriate monetary policy must be framed by the Federal Reserve's dual mandate to promote maximum employment and price stability. For much of the past five years, the FOMC has been confronted with an obvious and substantial degree of slack in the labor market and significant risks of slipping into persistent below-target inflation. In such circumstances, the need for extraordinary accommodation is unambiguous, in my view.
However, with the economy getting closer to our objectives, the FOMC's emphasis is naturally shifting to questions about the degree of remaining slack, how quickly that slack is likely to be taken up, and thereby to the question of under what conditions we should begin dialing back our extraordinary accommodation. As should be evident from my remarks so far, I believe that our assessments of the degree of slack must be based on a wide range of variables and will require difficult judgments about the cyclical and structural influences in the labor market. While these assessments have always been imprecise and subject to revision, the task has become especially challenging in the aftermath of the Great Recession, which brought nearly unprecedented cyclical dislocations and may have been associated with similarly unprecedented structural changes in the labor market--changes that have yet to be fully understood.
So, what is a monetary policymaker to do? Some have argued that, in light of the uncertainties associated with estimating labor market slack, policymakers should focus mainly on inflation developments in determining appropriate policy. To take an extreme case, if labor market slack was the dominant and predictable driver of inflation, we could largely ignore labor market indicators and look instead at the behavior of inflation to determine the extent of slack in the labor market. In present circumstances, with inflation still running below the FOMC's 2 percent objective, such an approach would suggest that we could maintain policy accommodation until inflation is clearly moving back toward 2 percent, at which point we could also be confident that slack had diminished.
Of course, our task is not nearly so straightforward. Historically, slack has accounted for only a small portion of the fluctuations in inflation. Indeed, unusual aspects of the current recovery may have shifted the lead-lag relationship between a tightening labor market and rising inflation pressures in either direction. For example, as I discussed earlier, if downward nominal wage rigidities created a stock of pent-up wage deflation during the economic downturn, observed wage and price pressures associated with a given amount of slack or pace of reduction in slack might be unusually low for a time. If so, the first clear signs of inflation pressure could come later than usual in the progression toward maximum employment. As a result, maintaining a high degree of monetary policy accommodation until inflation pressures emerge could, in this case, unduly delay the removal of accommodation, necessitating an abrupt and potentially disruptive tightening of policy later on.
Conversely, profound dislocations in the labor market in recent years--such as depressed participation associated with worker discouragement and a still-substantial level of long-term unemployment--may cause inflation pressures to arise earlier than usual as the degree of slack in the labor market declines. However, some of the resulting wage and price pressures could subsequently ease as higher real wages draw workers back into the labor force and lower long-term unemployment.19 As a consequence, tightening monetary policy as soon as inflation moves back toward 2 percent might, in this case, prevent labor markets from recovering fully and so would not be consistent with the dual mandate.
Inferring the degree of resource utilization from real-time readings on inflation is further complicated by the familiar challenge of distinguishing transitory price changes from persistent price pressures. Indeed, the recent firming of inflation toward our 2 percent goal appears to reflect a combination of both factors.
These complexities in evaluating the relationship between slack and inflation pressures in the current recovery are illustrative of a host of issues that the FOMC will be grappling with as the recovery continues. There is no simple recipe for appropriate policy in this context, and the FOMC is particularly attentive to the need to clearly describe the policy framework we are using to meet these challenges. As the FOMC has noted in its recent policy statements, the stance of policy will be guided by our assessments of how far we are from our objectives of maximum employment and 2 percent inflation as well as our assessment of the likely pace of progress toward those objectives.
At the FOMC's most recent meeting, the Committee judged, based on a range of labor market indicators, that "labor market conditions improved."20 Indeed, as I noted earlier, they have improved more rapidly than the Committee had anticipated. Nevertheless, the Committee judged that underutilization of labor resources still remains significant. Given this assessment and the Committee's expectation that inflation will gradually move up toward its longer-run objective, the Committee reaffirmed its view "that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after our current asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored."21 But if progress in the labor market continues to be more rapid than anticipated by the Committee or if inflation moves up more rapidly than anticipated, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target could come sooner than the Committee currently expects and could be more rapid thereafter. Of course, if economic performance turns out to be disappointing and progress toward our goals proceeds more slowly than we expect, then the future path of interest rates likely would be more accommodative than we currently anticipate. As I have noted many times, monetary policy is not on a preset path. The Committee will be closely monitoring incoming information on the labor market and inflation in determining the appropriate stance of monetary policy.
Overall, I suspect that many of the labor market issues you will be discussing at this conference will be at the center of FOMC discussions for some time to come. I thank you in advance for the insights you will offer and encourage you to continue the important research that advances our understanding of cyclical and structural labor market issues.
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Immigrants in US illegally see this election as crucial - See more at: http://www.timescolonist.com/immigrants-in-us-illegally-see-this-election-as-crucial-1.2472426#sthash.BroJZxQz.dpuf
Immigrants in US illegally see this election as crucial - See more at: http://www.timescolonist.com/immigrants-in-us-illegally-see-this-election-as-crucial-1.2472426#sthash.BroJZxQz.dpuf
NEW YORK, N.Y. - There was never any doubt Juana Alvarez's 18- and 20-year-old American-born daughters would be taking part in the election this year. Alvarez did her best to see to that.
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NEW YORK, N.Y. - There was never any doubt Juana Alvarez's 18- and 20-year-old American-born daughters would be taking part in the election this year. Alvarez did her best to see to that.
"I had two people I wanted to get registered and I registered them," Alvarez, a 39-year-old housekeeper in Brooklyn who came to the U.S. from Mexico as a teenager, said through a translator.
For Alvarez and the estimated 11 million other immigrants living illegally in the U.S., this is a potentially crucial election, with Republican Donald Trump talking about mass deportations and a border wall and Democrat Hillary Clinton pledging to support immigration reform and protect President Barack Obama's executive actions on behalf of immigrants.
Come Election Day, these immigrants will be watching from the sidelines, their future in the hands of others. Under the U.S. Constitution, only full citizens can vote; legal immigrants who are green card holders also are not allowed to cast a ballot.
Trump has spoken of fears of election fraud or that immigrants living illegally in the country might vote. More broadly, he has said all immigrants should play by the legal rules.
Alvarez and others like her say although they can't vote, they have been taking part in get-out-the-vote efforts among citizens.
In places like New York, California, Arizona and Virginia, they have been knocking on doors and making telephone calls, registering people, urging them to go to the polls, and telling their stories in hopes of persuading voters to keep the interests of immigrants in mind when they go into the booth.
"For me, it's important that those who can vote come out of the shadows and make their voices heard," Alvarez said.
Isabel Medina, a 43-year-old from Los Angeles who has been in the country illegally for 20 years and has three sons, two born in the U.S., has worked phone banks and taken part in voter registration drives for U.S. citizens, making sure that "even though they're frustrated, they are disappointed, they still realize it is really important, that they know the power that they have in their hands."
She says she emphasized the need to vote for all the races, not just the presidency, and the importance of taking part in referendums and propositions.
Even though these immigrants can't vote, their pre-Election Day efforts make a difference, said Karina Ruiz, 32, of Phoenix, who came to the U.S. illegally from Mexico when she was 15 and is acting executive director of the Arizona Dream Act Coalition, an immigrant-advocacy group that has been doing get-out-the-vote work.
"It is making an impact because those people who wouldn't vote otherwise, when they listen to my story and hear their vote does count and make a difference, they're encouraged to participate and be my voice," said Ruiz, who has a work permit and an exemption from deportation under Obama's Deferred Action for Childhood Arrivals policy. That policy was created by executive order, one that could be undone by any president in the future.
"I think to myself: I could just vote once, if I had the power to," she said. But "if I can influence 50 to 60 people to go ahead and vote, that's my voice multiplied by a whole lot."
As for what will happen after Election Day, "the uncertainty, it is there, I don't know what's going to happen," said Medina, who avoids talking about the election with her U.S.-born sons because she doesn't want them to get scared that their parents might be deported. "I am worried, yes."
By Deepti Hajela
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3 days ago
3 days ago