Elizabeth Warren and more than 100 House Democrats blast lack of diversity at the Fed
Elizabeth Warren and more than 100 House Democrats blast lack of diversity at the Fed
The Federal Reserve System is one of the most important institutions in the entire American government. Its composition is also almost shockingly non-diverse, with zero African Americans or...
The Federal Reserve System is one of the most important institutions in the entire American government. Its composition is also almost shockingly non-diverse, with zero African Americans or Latinos serving on the key panel whose decisions impact job creation and the pace of economic growth, despite fairly overwhelming evidence that Fed decisions impact racial groups differently.
What's more, the bodies that choose which people sit on that non-diverse committee are themselves extremely non-diverse — locking into place a system in which the interests of African Americans, Latinos, and lower-income people more generally may be underconsidered in making decisions about unemployment, inflation, and interest rates.
All this is the subject of a letter released at noon today by a group of 111 members of the House of Representatives plus 11 senators, headlined by Elizabeth Warren, Cory Booker, Bernie Sanders, Jeff Merkley, Kirsten Gillibrand, and Al Franken, demanding that the Fed pay more attention to diversity in its ranks.
The key graf:
According to a study by the Center for Popular Democracy released in early February, 2016, 83 percent of Federal Reserve head office board members are white, and men occupy nearly three-fourths of all regional bank directorships. The lack of public representation on regional Banks’ boards is even more distressing in light of the lack of diversity among regional Bank presidents and the resulting lack of diversity on the Federal Open Market Committee (FOMC). Currently, 92 percent of regional Bank presidents are white, and not a single president is either African-American or Latino. Moreover, at present 100 percent of voting FOMC participants are white, while 83 percent of regional Bank presidents and 60 percent of voting FOMC members are men.
Progressives interested in monetary policy issues have long struggled to engage the public, activist groups, or elected officials in the topic. The focus on diversity from the left-wing Center for Popular Democracy's "Fed Up" campaign that inspired this letter represents a new tactical effort to change that.
Diversity among decision-makers is not, of course, directly a monetary policy issue. But as the letter points out, monetary policy does have significant consequences for racial disparities in employment. They cite research from the Economic Policy Institute "demonstrating that for every .91 percent reduction in unemployment for whites, black unemployment drops 1.7 percent" meaning that African Americans have more to gain from monetary policy that is more pro-growth and less inflation-averse.
Michigan Representative John Conyers who was one of the main driving forces behind the letter issued a statement observing that "Detroit and cities across the country with high minority populations have some of the highest unemployment rates and will be harmed if the Federal Reserve does not consider our needs when they make key policy decisions."
How the Federal Reserve is organized
The specifics of the letter hinge on the structure of the Federal Reserve system, which is, in a word, confusing.
The main hub of the Fed is the Board of Governors in Washington, DC, which consists of a chair, a vice chair, and five other board members. Currently there are two vacancies on the board, and all five board members are white.
In addition to the Board of Governors, there are 12 regional Federal Reserve banks, each of which has its own president and its own board of directors. Each bank's president is selected by its board, with the choice subject to confirmation by the main board. Each regional bank board itself is composed in part of members selected by the private banks of the region and in part of members selected by the central board.
Monetary policy decisions are made by what's known as the Open Market Committee. The committee is composed of the seven members of the Board of Governors (at present, again, there are two vacancies) plus the president of the New York Fed, plus four other regional bank presidents serving on a rotating basis.
The point of the letter is that all these various groups underrepresent women and massively underrepresent African Americans and Latinos.
Today's Fed neglects race
Diversity of membership is neither necessary nor sufficient to ensure that a broad range of interests is represented. But there is considerable evidence that the current not-so-diverse group of monetary policymakers is not considering the full range of interests in American society.
Narayana Kocherlakota, the former president of the Federal Reserve Bank of Minneapolis, was the only nonwhite FOMC member during his term and offered this observation back in January:
However, there is one key source of economic difference in American life that is likely underemphasized in FOMC deliberations: race. Let’s look, for example, at the most recently released transcripts for FOMC meetings, which cover the year 2010 (my first full year on the Committee). It was a challenging year for the US economy as a whole, as the unemployment rate was above 9 1/4% in every month. But it was especially challenging for African-Americans: In every month of 2010, the unemployment rate among African-Americans was at least 15 1/2%. I did a search of the hundreds of pages of the meeting transcripts. Based on that search, my conclusion is that there was no reference in the meetings to labor market conditions among African-Americans (or Black Americans).
Monetary policymakers, with their needed independence, always risk being (or at least being seen as) insufficiently empathetic to the lives of their nations’ citizens. The Federal Reserve Act has mitigated this risk in the US by ensuring that an appreciation for economic diversity is at the heart of the FOMC’s deliberations.
The details of monetary policy get pretty complicated, and there's rarely been much sign of normal people being interested in them. But issues about who is represented and whose interests get discussed are easier to understand, so you can see why this particular angle is gaining momentum in Congress.
After the release of the letter, Hillary Clinton also weighed-in on the issue via spokesman Jesse Ferguson who offered a statement:
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. 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. 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
By Matthew Yglesias
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Building a National People’s Movement
Building a National People’s Movement
Over the past year, millions of workers have earned a raise as a result of the growing boldness of workers and organizers across the country. The success of the Fight for 15 and similar movements...
Over the past year, millions of workers have earned a raise as a result of the growing boldness of workers and organizers across the country. The success of the Fight for 15 and similar movements is no accident. Rather, it is the product of years of experimentation, perseverance, and creativity—and today, organizers may have finally hit on a powerful formula for helping workers take back some measure of power.
This success stems first and foremost from a basic reality: The economy in its current state is just not working for Americans. Nearly a decade after the 2008 recession, millions of families around the country have yet to be even touched by the recovery. Wages have stayed flat even as worker productivity has soared. Too many are stuck in jobs that don’t pay the bills, working hard and failing to even stay afloat.
Moreover, it has become increasingly clear that their suffering is by design, not a product of simple economics. The bad behavior of major corporations has been a driving force. Walmart and McDonald’s have come under fire for paying workers wages that force them onto public assistance to cover their basic needs. Pharmacy chains like Walgreens “promote” workers to salaried positions that require more hours without the chance at overtime pay. And countless businesses, from pizza chains to car washes, rob workers of an honest day’s pay through different forms of wage theft.
This atmosphere is ripe for the emergence of policies that give workers the pay they deserve. Getting these policies in place, however, requires a fight.
For years, community and labor organizations around the country supported workers by helping them organize themselves, going store by store, employer by employer. More recently, though, organizations such as Make the Road New York, Working Washington, New York Communities for Change, and others have begun to target entire industries—and, in turn, the economy as a whole. Pinning the blame on bad practices that are common to all companies—rather than one individual employer—allowed them to make the case that the problem demanded a widespread response.
Moreover, the demands have grown bigger, escalating from modest increases in the minimum wage to $8.75 to a more ambitious $10.10 and then all the way to $15. And while minimum-wage fights were traditionally separate from those for paid sick days, many organizers realized linking the two made for a far more powerful and galvanizing campaigns. The more ambitious our demands became, the more effective we have become, demonstrating the political salience of transformative demands.
Finally, more money for robust field campaigns was a critical part of the solution. Unions like the Service Employees International Union made a strategic decision to invest big in campaigns that would lift up the needs of all workers—including those who weren’t part of their union, a fundamentally new approach to organizing. As momentum grew, other unions and foundations have joined the cause, recognizing that helping working women and men to stand up for themselves and their families helps the whole economy. This funding has enabled organizations to launch bigger, more ambitious campaigns and to have the firepower needed to win them.
The results have been nothing short of extraordinary. Just a few years ago, when fast-food workers first went on strike in New York City, a $15 wage was unimaginable. This year, it became a reality in two of the largest states in the country—New York and California—affecting nearly nine million workers. Nearly 30 states have taken action to lift their minimum wage above the federal threshold of $7.25—and almost ten have done so for tipped workers. Ten states and more than a dozen cities have passed paid sick days for workers.
In the coming year, more than a dozen states and cities ranging from Wisconsin to Pennsylvania will be seeking a raise for their residents, reaching as high as $15 in many places. And, with half the country concentrated in America’s top 35 metro areas, the impact of these local laws has been disproportionate.
Today, organizers around the country are setting their sights on bigger goals, applying the lessons learned from the push for higher wages. We will be working to improve access to affordable housing, enact fair scheduling reforms that protect workers from unpredictable hours, and reduce the parasitic power and tax avoidance of hedge funds and other major corporations.
Yet individual victories are not enough. To truly convert this energy into lasting change, we will need a unified, nationwide movement that situates economic justice as just one part of a broader agenda of opportunity. And we will need this movement to be rooted in resilient, democratic people’s organizations on the front lines, all across the country.
This weekend, the Center for Popular Democracy is convening a People’s Convention that will bring together thousands of organizers from community groups across the country. The weekend will provide an opportunity to share lessons learned, to strategize together and to harness the energy of the past year into a powerful organized movement for progressive change through the next decade.
By providing the space for community leaders and organizers to begin working as one, we will begin to shift the balance of power back to working families and ensure the voices calling out for a future with dignity and justice will not fade out.
By Andrew Friedman
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Toys "R" Us Workers Meet with Senator Bernie Sanders and March Against Private Equity as the Legacy of Geoffrey is Further Tarnished...
Toys "R" Us Workers Meet with Senator Bernie Sanders and March Against Private Equity as the Legacy of Geoffrey is Further Tarnished...
Today, a group of Toys "R" Us employees met with Senator Bernie Sanders in Washington D.C., later marching alongside representatives from The Center for Popular Democracy and Rise Up Retail as...
Today, a group of Toys "R" Us employees met with Senator Bernie Sanders in Washington D.C., later marching alongside representatives from The Center for Popular Democracy and Rise Up Retail as they took to the AIC in protest of private equity destruction at the hands of Bain Captial, Kohlberg Kravis Roberts and Vornado Realty Trust.
Read the full article here.
The public compact
The public compact
It is always amusing to be the subject of a John McClaughry jeremiad. While I don’t mind being labeled as the “foremost defender” of public education, he insists on giving me full personal credit...
It is always amusing to be the subject of a John McClaughry jeremiad. While I don’t mind being labeled as the “foremost defender” of public education, he insists on giving me full personal credit for what is a state school board position.
In the instant case, John appears to be affronted by the suggestion that private (independent) schools that take public money must actually be held accountable for that money. This principle is at the core of the state board’s review of the independent school rules. Now this seems like a straightforward and fundamentally democratic concept that is generally accepted, but it has been a long-standing problem for some.
The law (16 VSA 166) provides a list of reporting requirements for independent schools if they want to chow down at the public trough. Unfortunately, as far back as the 1914 Carnegie Commission, we find evidence of the refusal of some independent schools to provide private school data even though it was the law of the land. (At that time, the Cubs were still basking in the glory of their World Series victory.)
The second paramount principle is that we have to educate all the children — regardless of needs and handicaps. That’s a necessity in a democracy. Denying a child admission on the basis of a handicap is, in most cases, illegal. Furthermore, it’s wrong. Public schools serve every child. The false fear John peddles is that the private school can’t afford to serve these children. That’s incorrect. It’s really quite simple. While great eruptions of umbrage are displayed, this problem has been solved for years. The private school contracts with (or hires) a specialist who bills the costs back to the public school. Approval in a given area requires that one sheet of paper be filed with the state. As simple as the solution actually is, some independent schools refuse to adopt an equal opportunity policy.
Instead, John proposes that Vermont “clone” Florida’s McKay Scholarship program where parents can choose the school for their handicapped child. That hasn’t worked out too well. If you think a “business management class” that sends students onto the street to panhandle is an acceptable education, then the McKay program may be just your thing. The Florida Department of Education has uncovered “substantial fraud,” including schools that don’t exist, non-existent students, and classes held in condemned buildings and public parks. And the state of Florida does not have the staff to adequately monitor the program. This is a recipe for abuse. Last May, the Center for Popular Democracy estimated that $216 million in charter school money went out the back door.
Finally, John raises the cost question and says private school scholarships would be “less expensive.” Yet he also criticizes the cost of the state’s excess public school capacity. Now let’s look at Vermont’s private independent school numbers. In 1998, there were 68 independent schools, and by 2016, the number had exploded to 93. In the decade 2004-14, independent school enrollments went down from 4,361 to 3,392. A 37 percent increase in schools with a 29 percent drop in students suggests somebody needs to revisit their business plan.
Taking it all together, (1) all who profit from the public treasury must be accountable for that money, (2) children have the right to be admitted to private schools, free of discrimination, on an equal opportunity basis, (3) private schools are a part of our system, (4) the public purse must be protected from fraud and abuse, and (5) directly or indirectly building and operating a parallel school system would be inordinately expensive and wasteful. Do these principles sound reasonable?
William J. Mathis is managing director of the National Education Policy Center and a member of the Vermont state Board of Education. The views expressed here are his own and do not represent the views of any group with which he is associated.
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Skinny Girl's CEO Bethenny Frankel charters multiple planes to bring supplies to Hurricane Maria survivors
Skinny Girl's CEO Bethenny Frankel charters multiple planes to bring supplies to Hurricane Maria survivors
Bethenny Frankel is turning the full force of her efforts on the disaster in Puerto Rico post Hurricane Maria. As reported by People, the Skinny Girl CEO, B Strong charity spearhead, mother, and...
Bethenny Frankel is turning the full force of her efforts on the disaster in Puerto Rico post Hurricane Maria. As reported by People, the Skinny Girl CEO, B Strong charity spearhead, mother, and Bravo reality star combined a Twitter crowdfunding campaign with her own resources to raise the money necessary to charter four planes full of water, canned goods, diapers, baby food, medical supplies, and more.
Read the full article here.
Stitched with Prejudice: Zara USA’s Corporate Culture of Favoritism
This paper reports the findings of our original survey aimed at understanding whether retail workers’ experiences of their opportunities at New York City Zara stores was different based on skin...
This paper reports the findings of our original survey aimed at understanding whether retail workers’ experiences of their opportunities at New York City Zara stores was different based on skin color or race. Zara, the world’s largest fashion retailer, has faced several complaints about racially insensitive designs over the years.This report finds that employees of color in Zara’s New York City stores face unequal conditions within the company:
Black employees are more than twice as dissatisfied with their hours as white employees. Darker-skinned employees report that they are least likely to be promoted. Employees of color state that they are reviewed with harsher scrutiny from management than white American and European employees. Of workers in the lower prestige back-of-store roles, 68 percent have darker skin.While Zara employees report experiencing discrimination in the workplace, they have also witnesseddiscriminatory practices against Zara customers of color.
According to surveys across Zara’s New York City workforce, Black customers are 7 times more likely to be targeted as potential thieves than white customers.In order to address problems of discrimination, this report recommends that Zara recommits itself to non-discrimination in employment, promotion, and service in New York City.
We recommend the following steps:
Institute a practice for workers to have access to a neutral, third-party arbiter to address their grievances, particularly relative to color and race discrimination. Recognize and respect workers’ basic labor rights, including regular and reliable schedules regardless of race, equal opportunity to be promoted, and a living wage. Allow New York City Zara employees to choose to represent themselves in grievances through real bargaining agents, such as labor unions, without interference.Down the full report here:
Group Blasts Fed for Lack of Diversity in Leadership
Source: Wall Street Journal
Federal Reserve leadership is overly...
Source: Wall Street Journal
Federal Reserve leadership is overly male, almost entirely white and drawn too frequently from the banking community, according to a group critical of the central bank.
A new report from the Center for Popular Democracy’s Fed Up campaign analyzes the types of people populating the Fed’s Washington-based board of governors, the regional bank presidencies and the regional bank boards of directors.
The report notes that all voting members of the central bank’s rate-setting Federal Open Market Committee and nearly all the regional bank presidents are white. Just two of the 12 presidents and two of the five governors are women.
“These key decision-making bodies remain dramatically unbalanced and unrepresentative of the vast majority of people who participate in the economy,” said the group, which has called for more public input into the selection of regional bank presidents and their performance evaluations.
The center said the composition of the Fed’s leadership bodies violates the spirit of the law that created the central bank, which calls for membership drawn from many different industries and interests.
A Fed spokesman responded to the criticism about the regional bank boards by saying the central bank has “focused considerable attention” to finding directors “with diverse backgrounds and experiences” that represent agriculture, commerce, industry, services, labor and consumers, as the law requires.
“We also are striving to increase ethnic and gender diversity,” the spokesman said, noting a rise in minority representation on the boards from 16% in 2010 to 24% today. Female representation has risen from 23% to 30% over the same period, and all told, 46% of regional directors now are either a woman or a member of a racial minority, the spokesman added.
Fed Chairwoman Janet Yellen is the central bank’s first female leader.
The Fed Up group, with a membership drawing heavily from labor unions and community organizations, is a regular critic of the central bank. It has argued in recent months that the Fed shouldn’t raise short-term interest rates and has pressed its case in private meetings with Fed officials. Several of its members appeared outside the central bank’s research conference in Jackson Hole, Wyo., last year to call attention to their views.
The group’s concern about a dearth of diversity at the Fed has been echoed by former Minneapolis Fed chief Narayana Kocherlakota. He argued in a blog post last month the central bank has appeared to give short shrift to racial concerns in part because there have been almost no African-Americans in its policy-making ranks. He wrote that the concerns of racial minorities have been “underemphasized” at the Fed.
The last African-American to serve on the Fed board was Roger W. Ferguson Jr., who served as a governor between 1997 and 2006 and as vice chairman from 1999 to 2006. The first African-American to serve as a Fed governor was Andrew Brimmer, from 1966 to 1974.
The report showed particular concern about the directors on the regional Fed bank boards, which are drawn from the private sector. It said 83% are white, compared with around two-thirds of the total U.S. population.
“The diversity of regional board members is meant to inform the bank presidents, who in turn, participate in discussions and vote at the FOMC,” the report said. “However, the boards, the presidents, and the FOMC fail to represent their region’s racial diversity.”
The report also said its analysis found that representatives of banking and what it calls commercial interests have increased their share of regional Fed board seats in recent years. Representatives of community groups and labor unions account for fewer than 5% of the available board seats, according to the center.
Among the regional Fed bank boards’ most high-profile roles is selecting their bank presidents. Recent regulatory changes now bar directors from participating in that process if their firms are regulated by the bank.
The directors also provide information to bank officials about local economic conditions and give advice on running the banks.
The Activists Who Helped Shut Down Trump’s CEO Councils
The Activists Who Helped Shut Down Trump’s CEO Councils
The CEOs who made up two White House advisory councils have fled like rats on a sinking ship. Their exodus — a dramatic rebuke of Donald Trump — came within 48 hours of the incendiary August 15...
The CEOs who made up two White House advisory councils have fled like rats on a sinking ship. Their exodus — a dramatic rebuke of Donald Trump — came within 48 hours of the incendiary August 15 press conference where the President praised some of the participants of last week’s white supremacist rampage in Charlottesville, Virginia.
But many of the CEOs on these councils had been under heavy pressure to disavow Trump’s agenda of hate and racism even before Charlottesville. That pressure came from grassroots activists.
The Center for Popular Democracy, Make The Road New York, New York Communities for Change, and several other immigrant and worker advocates had led that activist campaign, targeting the leaders of nine major corporations affiliated with the Trump administration. The campaign, working through a web site called Corporate Backers of Hate, detailed the connections between the nine companies and the Trump administration and encouraged people to send emails to both the CEOs involved and members of their corporate boards.
Read the full article here.
What Happens After the Progressive Revolution Comes to a City Like Durham
What Happens After the Progressive Revolution Comes to a City Like Durham
“Coalitions are coming together throughout the country. “Increasingly, what we’re seeing is cities and municipal policy-makers working together to build alternatives in policy and governance,”...
“Coalitions are coming together throughout the country. “Increasingly, what we’re seeing is cities and municipal policy-makers working together to build alternatives in policy and governance,” says Sarah Johnson, co-director of Local Progress, a network of progressive city officials staffed by the nonprofit Center for Popular Democracy. In Texas, for example, a group of local governments—including Houston, San Antonio, El Paso, and the border town of El Cenizo—collectively sued the state over a crackdown on sanctuary cities. (That lawsuit is ongoing.) “When it’s just one city fighting by itself,” Sarah Johnson says, “it’s obviously a very different calculus.”
Read the full article here.
Report: In MN, Jobless Rate for Blacks is Nearly 4 Times Higher than Whites
Bring Me the News - March 5, 2015, by Adam Uren - Minnesota has the third-highest unemployment gap between white and black people in the country – with the jobless rate among blacks almost four...
Bring Me the News - March 5, 2015, by Adam Uren - Minnesota has the third-highest unemployment gap between white and black people in the country – with the jobless rate among blacks almost four times higher than among whites.
The figures come from a new study by the Center for Popular Democracy, which shows that the unemployment rate in Minnesota among black resident is 3.7 times higher compared to white people.
This is second only to the District of Columbia (5.6 times) and Wisconsin (4.6 times).
The gap in Minnesota has lessened since 2007 however, when 3.85 times
It also found that the jobless rate among Hispanic people is more than two times greater than for white people.
A rally will be held Thursday, WCCO reports, which will “draw attention to the racial differences between wages and jobs available” in the Twin Cities and Minnesota as a whole.
It is being organized by representatives of Neighborhoods Organizing for Change (NOC), the Center for Popular Democracy and the Economy Policy Institute, and held at the NOC offices in W. Broadway Ave., Minneapolis, starting at 3 p.m.
Unemployment falling, gap still wide
The significant disparity between black and white unemployment remains, even though overall unemployment has dropped in recent years thanks to the recovery of Minnesota’s economy since the financial crisis.
The unemployment rate among black people across the state fell to 11.9 percent in 2014, compared to 15.4 per cent in 2007.
However, the rate among white people stood at just 3.2 percent in 2014, down from 4 percent in 2007. The report also found that the unemployment rate among Hispanics stood at 7 percent in 2014, almost the same as it was in 2007.
The unemployment gap is even worse in the metro area, with the graph above showing that the black unemployment rate is 3.89 times higher than white.
The report features a case study of 23-year-old Minneapolis resident Tyrone Raino, who told the Center for Popular Democracy the only full-time job he could find is 40 minutes outside the city, and he works there 40 hours a week while taking a further 20 hours of classes every week.
Disparity is nothing new
Minnesota regularly features among the worst states for racial unemployment gaps.
In 2013, Minnesota was second only to Wyoming according to the Bureau of Labor Statistics, the Star Tribune reports, when the black unemployment rate was triple the white rate.
And in 2011, MPR reported on a study by the Economic Policy Institute, which found the Twin Cities along with Memphis had the biggest white-black unemployment gaps out of the nation’s 50 biggest metropolitan areas.
When The Atlantic ran a piece last month lauding the metro area for its winning mix of affordability, opportunity and wealth, several publications responded by highlighting the gaps that suggest not everything is rosy in the Twin Cities.
It’s not just with unemployment either. WalletHub found Minnesota has the second-worst wealth gap between white people and people of color in the United States, as well as one of the biggest gaps for home ownership levels.
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