Campaign News

Federal Reserve Bank of Cleveland President Loretta Mester said there’s a “compelling” case for gradually raising interest rates, with the U.S. economy approaching the central bank’s targets on employment and inflation.

“Policy has to be forward-looking,” Mester told reporters Thursday following a speech in Lexington, Kentucky. “If you have a forecast and inflation is moving up to your target and you’re at full employment, then it seems like a gradual increase from a very low interest rate is pretty compelling to me. Pre-emptiveness is important.”

She declined to say precisely when she believed rate increases would be necessary.

The policy-making Federal Open Market Committee will meet Sept. 20-21 to decide whether to lift the target range for its benchmark rate. Fed Chair Janet Yellen said last week the case for an increase had “strengthened in recent months.”

Investors see a roughly one-in-four probability that the Fed will act later this month, based on pricing in federal futures funds contracts.

Too Low for Too Long

Mester, who votes this year on the FOMC, said the Fed must take seriously the risk to financial stability caused by keeping rates low for too long, although she said she didn’t think the central bank was currently “behind the curve.” Nor did she see signs of financial instability already in the economy.

In her speech, Mester rejected the argument made to a number of Fed officials last week by a coalition of community activists that continued low interest rates are needed to extend the benefits of economic recovery to disadvantaged minorities.

“I do not believe that at this point in the business cycle, the current very low level of interest rates is an effective solution to these longer-run issues,” she said.

Eleven Fed governors and regional presidents, including Vice Chairman Stanley Fischer, met with organizers from the Center for Popular Democracy’s “Fed Up” campaign on the sidelines of the annual policy retreat in Jackson Hole, Wyoming, hosted by the Kansas City Fed.

The U.S. central bank has kept rates on hold through five meetings this year following a rate hike in December that was the first in nearly a decade.

By Christopher Condon

Source

Democratic hopeful Hillary Clinton came out in favor of changes to the Federal Reserve that would reduce the number of bankers in key central bank positions on Thursday, marking a major coup for national progressive groups championing reform.

“The Federal Reserve is a vital institution for our economy and the wellbeing of our middle class, and the American people should have no doubt that the Fed is serving the public interest,” Jesse Ferguson, a Clinton campaign spokesman, said in a statement. “That’s why Secretary Clinton believes that the Fed needs to be more representative of America as a whole as well as that commonsense reforms — like getting bankers off the boards of regional Federal Reserve banks — are long overdue.”

The campaign also provided insight into the type of Federal Reserve governors that Clinton would appoint.

“Secretary Clinton will also defend the Fed’s so-called dual mandate — the legal requirement that it focus on full employment as well as inflation — and will appoint Fed governors who share this commitment and who will carry out unwavering oversight of the financial industry,” Ferguson said.

The announcement brings the Democratic presidential front-runner closer to the position of her rival, Sen. Bernie Sanders (I-Vt.). Sanders proposed barring financial executives from sitting on the boards of the 12 regional Federal Reserve banks in an op-ed in The New York Times in December.

The Clinton campaign statement came in response to a letter to Fed chair Janet Yellen from 11 Democratic senators and 116 House Democrats. The letter, spearheaded by Rep. John Conyers (D-Mich.) and by Sen. Elizabeth Warren (D-Mass.), urged the Fed to appoint more women and people of different racial and ethnic backgrounds while expanding the representation of consumer and labor groups on regional Fed bank boards.

Currently, the vast majority of Fed bank board directors are white men. People representing either the financial industry or other major business sectors also occupy most of the seats.

It appears there is now widespread agreement among top Democrats that the Fed has to redouble its commitment to full employment and to be more attentive to how its policies affect African Americans, Hispanics, and other minorities.

Dean Baker, Center for Economic and Policy Research

The Fed’s control over monetary policy allows it to raise borrowing costs to head off inflation and reduce them to maximize employment. The members of Congress who wrote to Yellen argue that the disproportionate influence of financial officials and the lack of diversity at the Fed hamper its sensitivity to groups with a more precarious position in the job market.

Clinton had said virtually nothing about her agenda for the powerful central bank until now.

The Fed Up campaign, a coalition of progressive groups headed by the Center for Popular Democracy that has been at the forefront of recent efforts to make Federal Reserve reform a key part of the liberal agenda, confirmed that it has been in talks with the Clinton campaign for months.

“Secretary Clinton did the right thing today by coming out in favor of reforming the Federal Reserve,” said Ady Barkan, director of Fed Up. “We’re very excited that she listened to the voices of community leaders from around the country who have said that we need a Federal Reserve that reflects and represents the American people and that creates a strong economy for all.” 

Some liberal economists previously noted that Clinton’s reticence about the Fed was inconsistent with her stated plans to return the country to the prosperity of the late 1990s, which enabled widespread wage growth. They argue that the era’s well-distributed economic gains were due in no small part to the permissive monetary policies of the Federal Reserve.

Dean Baker, one such economist and a co-director of the Center for Economic and Policy Research, was elated to hear about Clinton’s remarks.

“Holy shit — that’s great news,” Baker said in an email upon receiving the news.

“While Senators Sanders, Warren, and others on the left side of the party took the lead, it appears there is now widespread agreement among top Democrats that the Fed has to redouble its commitment to full employment and to be more attentive to how its policies affect African Americans, Hispanics, and other minorities,” Baker continued. “There is also agreement that the Fed’s current archaic structure needs to be changed.”

By Daniel Marans

Source

Ana Maria Archilla the co-executive director of Center for Popular Democracy, said that at first progressives "were worried about the political implications."

But "when Randy could say it in rural Wisconsin, in Paul Ryan, territory,” she continued, activists felt they had made a breakthrough.

Read the full article here.

Despite a public pledge last year to ease scheduling burdens for its baristas, Starbucks has fallen short of its commitment on a number of fronts, according to a new report released Wednesday based on interviews with the coffee chain’s workers across the country.

The report, titled “The Grind: Striving for Scheduling Fairness at Starbucks” (PDF), said Starbucks baristas across the country were still complaining that they often don’t receive their work schedules soon enough before shifts and that they are under pressure to avoid taking sick days.

The New York-based advocacy group Center for Popular Democracy produced the report, which cited survey data collected from more than 200 Starbucks baristas in 37 states and compiled by Coworker.org, an online platform that supports workplace rights.

“More than six months after Starbucks publicly recommitted to scheduling policies and mandated ten days’ notice, the scheduling issues they sought to address still persist in their frontline stores,” the report said.

After a New York Times investigation in August 2014 highlighted the scheduling travails of a Starbucks worker and single mother named Janette Navarro, the company announced that it would strive to improve work schedules for its employees, whom the company calls “partners.” The workers’ survey cited in Wednesday’s report was conducted in March this year.

“Taking care of our partners is a responsibility I take very personally,” Cliff Burrows, a high-level Starbucks executive, said in an internal company email at the time, according to the New York Times and other news outlets. Burrows was quoted as saying the company would work to aid “stability and consistency” in the schedules of its more than 130,000 baristas.

Burrows pledged then that the company would improve its scheduling software to make it easier on employees to plan their lives.

But the directive has only partially trickled down to the company's more than 12,000 U.S. locations, Wednesday's report says.

“They’ve made some improvements, but they’ve been minor,” said Carrie Gleason, co-author of the report. “A fair workweek at Starbucks exists in some stores,” she said, but “the issue is inconsistency.”

Starbucks did not respond to a request for comment on the report's findings before the time of publication. 

The report said many baristas noted a high incidence of so-called “clopening” shifts, in which a person closes and opens in consecutive shifts, often leaving a span of only a few hours in which to return home before working again. 

Last year Starbucks' Burrows pledged an end to the dreaded clopening shifts, saying “district managers must help store managers problem-solve issues specific to individual stores to make this happen.”

But the report indicated that such shifts were still widespread, with nearly a quarter of workers regularly getting them.

“I feel that baristas should have a minimum of 10 hours in between shifts. Everyone should have a fair chance to get home, settled, and be able to sleep for eight hours before having to get up for another shift," the survey report quoted an Illinois Starbucks worker as saying.

But the majority of workers who do clopening shifts are able to get fewer than seven hours of sleep, the report said.

“Because I was frequently scheduled for clopening shifts, I got just four or five hours of sleep a night. I was doing all I could to get ahead, but Starbucks’ scheduling practices made me question whether that was possible,” said Ciara Moran, a former Starbucks barista wrote in a petition she launched with Coworker.org, asking for further scheduling reforms.

The report released Wednesday said that 48 percent of surveyed Starbucks workers said they received their work schedules a week or less in advance, and that 40 percent reported they had experienced pressure to avoid taking sick days.

"Employees say that it can be extremely difficult to take sick days because they face pressure to work while sick, fear negative consequences or are forced to find their own replacement," the report said.

The report suggested that the experiences of individual workers varied considerably, depending on store locations and personnel. 

“Many of us have different experiences at Starbucks, depending on our manager,” Moran said, asking others to support the cause “for consistent protections across the company, starting with healthy schedules across the board.”

“On a corporate level there isn’t that level of accountability. They’re not looking whether their polices are going far enough,” Gleason said. “For Starbucks, it can be a model for the industry for how to deliver a sustainable workweek.”

“I think they need to engage their workforce in a different way,” she said.

Source: Al Jazeera America