In her testimony before the House on Wednesday, Federal Reserve Chair Janet Yellen downplayed what the Fed can do to address the outsized unemployment among African Americans. Responding to a question about racial inequality in the job market, Yellen said “there really isn’t anything directly that the Federal Reserve can do to affect the structure of unemployment across groups . . . there’s nothing we can do about any particular group.” Connie Razza, director of strategic research at the Center for Popular Democracy, issued the following statement on behalf of the Fed Up Coalition:

“Chair Yellen’s response is troubling. With African Americans still mired in our own Great Recession, we should be hearing a positive vision from the Fed on how to foster full employment. While the economy is complex and the Federal Reserve’s tools are limited, there is plenty the Fed can do to improve the labor market for Black workers and to reduce racial inequality in the job market.

“Today, the unemployment rate for African Americans is 9.5 percent – higher than it ever was for whites during the worst months of the Great Recession. Black America is still in the middle of a Great Recession. Chair Yellen must consider the many places in our country where Black unemployment is double pre-recession levels before putting the brakes on recovery. 

“When Chair Yellen and other Fed officials talk about raising interest rates in 2015, they are talking about intentionally slowing down the economy and job growth, which would make it harder for most Americans, and particularly Black workers, to find good paying jobs. The direct consequences of the Fed’s projected interest rate hikes would harm millions of workers.

“Instead, the Fed could continue to push toward a tight labor market, in which the number of people looking for work more closely matches the number of jobs available. A full-employment economy, as we saw in the late 1990s, shrinks racial inequity and will bring particular benefits to Black workers, who are disproportionately unemployed, underemployed, underpaid, and endure more difficult scheduling circumstances in the workplace.

“In particular, a tight labor market reduces the practicability of discriminating. High unemployment rates facilitate racial discrimination because there are too many qualified job candidates for every job, so employers can arbitrarily limit their labor pool with unnecessary educational requirements, irrelevant credit or background checks, or straightforward discrimination. A tight labor market makes it much harder for employers to succumb to conscious and unconscious biases and instead hire workers who are qualified. The Federal Reserve must not raise interest rates until a tighter labor market has been achieved.

“Inflation is below the Fed’s already-low two percent target. Unemployment and underemployment are too high, while wages are still too low. There is no reason to raise interest rates in 2015. Doing so would cause tremendous harm to the aspirations and lives of tens of millions of working families, and would disproportionately harm African Americans.”

To schedule interviews with Connie Razza, send an email to press@populardemocracy.org. 

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The 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.