THE BUZZ 4: Federal Face Time
JACKSON HOLE, WY – Last Thursday was the first time the most powerful financial players in the U.S. formally met with...
JACKSON HOLE, WY – Last Thursday was the first time the most powerful financial players in the U.S. formally met with the people their policies affect. During the Federal Reserve Economic Policy Symposium at Jackson Lake Lodge, a meeting between the Fed and Fed Up sparked impassioned speeches that burned through barriers of language, culture, race, and socio-economic status. But the fervency expressed by Fed Up members seemingly had little influence on the Fed’s impending decision to raise interest rates, something Federal Reserve board chair Janet Yellen announced in her annual address the following day.
Still, members of Fed Up—a syndicate of the Center for Popular Democracy built around the ideology that the Fed’s policies affect people of every skin color and income bracket—were encouraged by the meeting.
Shawn Sebastian is the field director of the Fed Up campaign. “I think the meeting with the Fed was historic and unprecedented,” he said. “There are never that many Fed officials in the same room at the same time talking about monetary policy, and they’re certainly not doing that with low income people of color.”
Federal Reserve board leaders like Neel Kashkari, Lael Brainard, Esther George and board vice president Stanley Fischer all participated in the Fed Up roundtable.
The landmark meeting was the result of Jackson Lake Lodge overselling hotel rooms that Fed Up members had reserved. After the group filed several federal complaints, the Fed agreed to the sit down.
‘Don’t slow down the economy’
Echoes of agreement among Fed Up’s constituency rippled through the crowded room at Jackson Lake Lodge Thursday as the roundtable began. Members of Fed Up elucidated ideas of stagnant wages, unemployment, and underemployment that disproportionately plague people of color in the United States. Fed Up members explained how the Federal Reserve’s pending decision to slow down the economy by raising interest rates could damage already neglected communities. Nearly every speaker from Fed Up concluded with one central idea: Don’t slow down the economy. Not yet. Don’t hike interest rates. Not yet. Our communities are still underserved. Our people are still underpaid. Our unemployment rates are still nearly double the national average.
Esther George, chair of the KC Federal Reserve, responded to protestors with deference to Congress. “Our objective is to follow mandates of what Congress has made out,” she told the crowd. “The objective is not to slow down the economy; that would be irresponsible.” George continued by explaining that the objective of the Fed was to walk the balance beam between the ideal of full employment and the consequence of potential inflation due to an oversaturation in the job market.
Fed Up’s expert on economic forces, Josh Bivens of the Economic Policy Institute, said the Fed’s concerns about inflation should be adjusted in light of the impacts of the Great Recession. Bivens claimed a period of “overshooting” employment targets are necessary to heal the effects of that economic disaster, and that this period of overshooting is especially important to people of color, because it takes longer for their unemployment rates to catch up to national averages.
“[If] The Federal Reserve starts slowing the economy, it starts halting progress in reducing unemployment before the benefits of that reach the last people to be hired,” Bivens said.
Promising diversity
Fed Up seemed to impact members of the Federal Reserve Board on a few fronts. Several ambitious promises were made by members of the Fed, catalyzed by discussions held during the roundtable. Sebastian believes the most concrete impacts Fed Up had on the Federal Reserve were when Lael Brainard of the Federal Reserve’s board of governors committed to seriously considering a slate of candidates for board positions that more closely reflect America’s diversity. The board’s lack of diversity is a source of contention among Fed Up members, as the board is comprised of 16 white, predominantly male members. The only exception is Neel Kashkari of the Minneapolis Federal Reserve Bank, who is of Indian descent. Fed Up members are not the first to point this out, however. This summer a formal letter of complaint, signed by Bernie Sanders, Elizabeth Warren and some 127 other lawmakers, demanded the Federal Reserve open up to more diversity.
Another victory for the Fed Up campaign happened when Kashkari recommitted to an impressive research project studying racial disparities. Minnesota and Wisconsin, both states within Kashkari’s district, are rated the worst states in the country for black people to live based on a report by 24/7 Wall Street. Kashkari’s goal is to find the source of the disparities that propagate those statistics.
Blacks in Wisconsin face an unemployment rate of 21 percent which is more than quadruple the national average. Their incarceration rate is the third highest in the country, and their rate of home ownership is the tenth lowest. At a meeting earlier this month in Minneapolis, Kashkari sat down with Neighborhoods Organizing for Change to discuss the problem.
“Some of the racial disparities are a crisis, and we need to treat them like a crisis,” Kashkari said. “There’s something structural in the U.S. economy, in good times and bad, that black unemployment is almost always twice as high as white unemployment.”
However, in spite of all protestor efforts, in what is considered to be one of Federal Reserve Board Chair Janet Yellen’s most important speeches of the year, she explicitly stated that interest rate hikes were on the horizon. Yellen told the audience at Jackson Lake Lodge, “Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.” PJH
By Natosha Hoduski
Source
Trabajadores demandan freno a la ‘epidemia’ de robo de salarios en NYC
Trabajadores demandan freno a la ‘epidemia’ de robo de salarios en NYC
Source:...
Source: El Diario
Freno a la epidemia de robo de salarios fue la consigna que gritaron sin cesar unas 30 empleadas domésticas y jornaleros frente a la Corte de Brooklyn. La acción, liderada por el Proyecto de Justicia Laboral (WJP), sirvió para exponer a un contratista inescrupuloso como parte de “una maquinaria que exprime a las familias trabajadoras”.
Los defensores denunciaron que la creación de’ empresas fantasma’ es una estrategia que los empleadores para esquivar a las autoridades y seguir en el negocio pese a tener casos abiertos en las cortes de la ciudad.
Samuel Just, propietario de Just Cleaning, fue arrestado el verano pasado por la Fiscalía de Brooklyn luego de que el WJP documentara varios casos de robo de salario. Pese a la presión de las autoridades y de los grupos defensores de los jornaleros, el empresario se niega a pagar a las víctimas, la mayoría mujeres latinas.
“El robo de salario es un crimen. No hay otra manera de calificarlo”, sentenció Ligia Guallpa, directora ejecutiva del WJP.
Otras organizaciones se unieron a la protesta para denunciar que el robo de salario afecta radicalmente a las comunidades inmigrantes. Gonzalo Mercado, director ejecutivo de Staten Island Community Job Center, explicó que los contratistas están creando empresas fantasmas para evadir a las autoridades y las pesquisas de los activistas.
“Hemos visto a empleadores circulando por las paradas de jornaleros con camionetas sin logotipos. Su estrategia es evitar ser identificados”, sentenció. “Muchos trabajadores no saben quién los contrata, lo que hace más difícil la recuperación de los salarios”.
El mexicano Oscar Lezama (36) contó que una compañía de Staten Island, que se dedica a la instalación de cocinas, se negó a pagarle unos mil dólares por horas extra.
“No sabía para quién trabajaba. Nunca vi nombres o logotipos que identificaran a la compañía”, comentó.
La organización Staten Island Community Job Center ayudó a Lezama a recuperar su salario mediante negociaciones directas con el propietario, pero Mercado dijo que identificar a la compañía implicó una investigación exhaustiva.
“Las organizaciones, de alguna manera, estamos tomando el rol del Departamento de Trabajo para recuperar los salarios”, dijo Mercado. “Muchos contratistas prefieren la negociación directa y así evitar comparecer en una corte, lo que reduce el tiempo de recuperación de salario, algo que beneficia al trabajador”.
Los defensores están pidiendo mano dura para los contratistas que reinciden en el robo de salario. Parte de sus esfuerzos implica que la Ciudad revoque o niegue la renovación de las licencias.
“Los contratistas recurren a subcontratistas para contratar jornaleros y luego no pagarles”, dijo Guallpa. “En las cortes se defienden argumentando que nunca contrataron al trabajador”.
De acuerdo con la activista, Samuel Just estaría recurriendo a estas estrategias para evadir su responsabilidad. El empresario presuntamente recurre a subcontratistas y empresas fantasma para continuar en el negocio y esquivar a los fiscales, algo que WJP está documentando.
La protesta frente a la Corte de Brooklyn fue la quinta acción colectiva convocada por WJP para exponer al propietario de Just Cleaning, pero también para crear conciencia acerca de que el robo de salario es un problema, que se agudizó en los últimos años, según defensores.
“La falta de denuncia, el miedo de los trabajadores indocumentados y las leyes débiles están nutriendo el abuso de los empleadores”, se lamentó Omar Henríquez, organizador de la Red Nacional de Trabajadores por Día (NDLON). “El robo de salario implica la evasión de impuestos. Es perjudicial para nuestros gobiernos y comunidades”.
El Servicio de Impuestos Internos (IRS) estima que los empleadores clasifican erróneamente a millones de empleados cada año en el país, evitando en promedio cerca de $4.000 en impuestos federales por cada trabajador.
Las víctimas de Just declinaron hacer comentarios por recomendación de sus abogados, pero estuvieron en la protesta demandando justicia. Varias llamadas al empleador no fueron atendidas al cierre de esta edición.
Un estimado de 2.1 millones de neoyorquinos son víctimas de robo de salario al año, lo que representa una pérdida de $3.2 mil millones en pagos y beneficios, según el reporte “By a Thousand Cuts: The Complex Face of Wage Theft in New York” del Center for Popular Democracy Action (CPDA).
Según la Fiscalía de Brooklyn, Just recogía a los trabajadores en una van en la esquina de las avenidas Marcy y Division -en el barrio de Williamsburg-, y les ofrecía entre $10 y $15 la hora. El contratista hizo trabajar a los jornaleros hasta 27 horas seguidas durante la celebración de Pesaj o Pascua Judía, que implica una intensa limpieza de los hogares.
Al menos 11 trabajadores -la mayoría mujeres- habrían sido víctimas de Just, pero sólo cinco se atrevieron a denunciarlo, según los activistas.
“El castigo de empleadores como Just motivará la denuncia y enviará un mensaje claro a otros contratistas que violan las leyes. Sólo así frenaremos la epidemia de robo de salario en Nueva York”, dijo Guallpa.
Two weeks before hurricane season, Puerto Rico is not ready, groups warn
Two weeks before hurricane season, Puerto Rico is not ready, groups warn
“One thing is evident at the core of the response,” said Ana Maria Archila, co-executive director at the Center for...
“One thing is evident at the core of the response,” said Ana Maria Archila, co-executive director at the Center for Popular Democracy and a part of the Power 4 Puerto Rico coalition. “There is a crisis of democracy. The federal government is acting as if the people of Puerto Rico are not constituents.”
Read the full article here.
On-call Shifts String Retail Workers Along
The Boston Globe - April 19, 2015, by Dante Ramos - Because life-threatening crises arise at odd times, people in some...
The Boston Globe - April 19, 2015, by Dante Ramos - Because life-threatening crises arise at odd times, people in some fields have days when they’re on call. EMTs get called to accident scenes. Doctors have patients who might fall ill or go into labor at any moment. But do unforeseen variations in sweater sales, or in foot traffic in the housewares department, have the same urgency? Of course not.
Recently, New York Attorney General Eric Schneiderman sent letters demanding information from Gap, Abercrombie & Fitch, Urban Outfitters, and 10 other major retail chains about their use of on-call shifts — periods for which an employee must keep an open schedule but might not end up working.
Instead of simply reporting for work, the employee has to check in with a supervisor a few hours in advance. If she gets called in, she may have to scramble for a babysitter. If she doesn’t get called in, she doesn’t get paid, and it’s too late to get a shift on a second job. “People will be scheduled for eight on-call shifts in a pay period and only get called in for one shift,” says attorney Rachel Deutsch of the Center for Popular Democracy, a labor advocacy group.
Some of the retailers Schneiderman targeted have written the practice into their employee handbooks. Others, such as JC Penney, told reporters last week they have policies against it. Still others have responded cryptically to reporters’ inquires; TJX, the Massachusetts-based discount giant, told CNN Money that its schedules “serve the needs” of workers and the chain. I contacted the company to clarify, but it didn’t respond.
On-call shifts are a new frontier: They’ve proliferated at big chains because of just-in-time scheduling software, which uses up-to-the-minute data to maximize sales while minimizing the number of employees on the clock at slower times. Statistics are hard to come by, although a 2011 survey by Retail Action Project, another advocacy group, found that 43 percent of New York City retail workers were assigned to on-call shifts sometimes or often. Until Schneiderman’s office started sending out letters, the practice had attracted little regulatory attention. (In Massachusetts, the attorney general’s office is watching what happens in New York, but hasn’t taken similar action.)
Despite their relative novelty in retail, on-call shifts speak to an age-old tension. Economic life is full of uncertainty. How much should employers bear, and how much should fall on workers? Jon Hurst, president of the Retailers Association of Massachusetts, argues that stores face stiff competition from e-commerce and survive at the mercy of the customer who, he says, “moves on a dime.” He adds, “If you choose to work in retailing, you have to live with the consumer.”
In other sectors, though, people who work on call are often paid salaries that presume some unpredictability, or they’re paid for the time they spend waiting around. Deutsch used to work as a union rep for hospitals in the Bay Area. One hospital, she says, had a handful of technicians on staff who performed echocardiograms during the workday. After hours, there was a technician on call, who was paid half-time for those shifts even when there was no work.
A key difference: Echocardiogram techs have a specialized skill. Entry-level retail workers don’t, and those averse to on-call shifts are easily replaced.
Businesses aren’t social-service agencies. To rely on employers as guarantors of health care and retirement security, as the US government did after World War II, is to assume they and their workers want to be bound together intimately, for decades on end. But at the other extreme, companies that treat employee relationships as fleeting and transactional — the workplace equivalent of a one-night stand — will end up with lots of churn in their ranks.
Or they’ll be subject to lots of government mandates. Responding to a variety of complaints about unpredictable schedules, San Francisco last year approved a far-reaching “retail worker bill of rights” that, among other things, requires employers to post schedules weeks in advance. A proposed Massachusetts law has similar provisions. Hurst points out that parts of the bill would have hamstrung local retailers in February, when sales plunged during a four-week Ice Age.
Retail chains can forestall such rules by changing their ways. When stores train workers to do more than scan tags and say “I can help who’s next,” those workers can improvise. They might tend to customers during a sudden rush while prioritizing other jobs, like restocking shelves, at slower moments. If employers still believe they need on-call shifts, they can simply guarantee employees some pay for those periods. Ideally, chains would do so voluntarily. In practice, some will need a regulatory nudge.
When retailers can claim free options on hourly workers’ time, they have no incentive to make firm decisions in advance. But no one likes being strung along, and no one’s life is infinitely flexible.
Soure
Fed comes up short on diversity goal, Democrats say
WASHINGTON (MarketWatch) — The U.S. central bank remains a bastion of white privilege and Fed Chairwoman Janet Yellen...
WASHINGTON (MarketWatch) — The U.S. central bank remains a bastion of white privilege and Fed Chairwoman Janet Yellen should promptly take steps to “remedy” the issue, 115 Congressional Democrats said Thursday.
In a letter to Yellen, the House and Senate Democrats urged her to “fulfill its statutory and moral obligation to ensure that is leadership reflects the composition of our diverse nation” and include representatives outside of the banking industry. Bernie Sanders, the independent senator from Vermont and a presidential candidate, also signed the letter.
The letter noted that Congress in 1977 passed a law mandating more diversity at the Fed.
“Nearly 40 years later, the leadership across the Federal Reserve system remains overwhelmingly and disproportionately white and male, while major financial institutions and corporations are overrepresented in senior roles,” the letter said.
Leading Democrats including Sen. Elizabeth Warren of Massachusetts and Rep. John Conyers of Michigan signed the letter. Rep. Maxine Waters, the ranking member on the House Financial Services panel, was also a signatory.
At the moment, 11 of the 12 Fed regional presidents are white and ten are men.The five members of the Fed board of governors are all white, while two are women.
“Is the Fed Board of Governors embarks on its search for regional president vacancies, we urge you to engage in an inclusive process to consider candidates from a diverse set of background, including a greater number of African-Americans, Latinos, Asian Pacific Americans, women and individuals from labor, consumer, and community organizations,” the letter said.
In response, a Fed spokesperson said the central bank has “focused considerable attention in recent years” on recruiting directors of regional Fed banks with diverse backgrounds and experiences.
As a result, minority representation at the 12 district banks and their branches has increased to 24% this year from 16% in 2010, the spokesperson said.
By Greg Robb
Source
Is the Federal Reserve’s Leadership Diverse Enough?
U.S. Senator Elizabeth Warren (D-Massachusetts) has shown in the past that she is not afraid to aggressively confront...
U.S. Senator Elizabeth Warren (D-Massachusetts) has shown in the past that she is not afraid to aggressively confront members of her own party on issues that she is passionate about.
This has been especially evident on issues facing the mortgage industry. Warren famously grilled FHFA Director Mel Watt in November 2014 in a Senate Banking Committee hearing on why the Director had not yet instituted a principal reduction program for underwater homeowners. In September 2015, she and Rep. Michael Capuano (D-Massachusetts) led a protest in Washington over HUD’s and FHFA’s sales of delinquent mortgage loans to private investors. Both organizations are led by Democrats.
Now Warren has turned her attention toward the Federal Reserve Board and Chair Janet Yellen. On Thursday, Warren and 10 other U.S. Senators, along with 116 of the 193 Democratic members of the U.S. House of Representatives (led by John Conyers, D-Michigan) wrote a letter to Yellen calling for more diversity in the leadership of the central bank.
After starting off by calling Yellen’s tenure at the Fed “historic” and pointing out some economic gains the country has made since Yellen was appointed as the head of the central bank in February 2014, the lawmakers then addressed what they believe to be a problem in the demographic makeup among the Fed’s leadership.
“A lack of diverse leadership is hurting the Federal Reserve's policy decision-making process.”
U.S. Senator Elizabeth Warren
“However, despite these gains, we remain deeply concerned that the Federal Reserve has not yet fulfilled its statutory and moral obligation to ensure that its leadership reflects the composition of our diverse nation in terms of gender, race and ethnicity, economic background, and occupation, and we call on you to take steps to promptly begin to remedy this issue,” the lawmakers wrote.
The lawmakers cited a law passed by Congress in 1977 requiring the Fed’s leadership to more reflect the country’s diverse makeup without discrimination based on race, creed, color, sex, or national origin. The letter pointed out that nearly four decades later, “the leadership across the Federal Reserve system remains overwhelmingly and disproportionately white and male, while major financial institutions and corporations are overrepresented in senior roles.”
The letter cited a February 2016 study by the Center for Popular Democracy which found that 83 percent of Federal Reserve head office board members are white and nearly three-quarters of all regional bank directorships are held by men.
“When the voices of women, African-Americans, Latinos, Asian Pacific Americans, and representatives of consumers and labor are excluded from key discussions, their interests are too often neglected,” the letter stated. Warren further tweeted on Thursday that “[a] lack of diverse leadership is hurting the Federal Reserve's policy decision-making process.”
In addition to what the lawmakers perceive as racial and gender disparities, they also expressed concern over a “persistent lack of occupational diversity, noting that only 11 percent of the Fed’s regional bank directors come from community, labor, or academic organizations compared to 39 percent that represent financial institutions and 47 percent that represent commerce, industry, and services firms.
A Fed spokesperson responded to the letter with the following statement: “The Federal Reserve is committed to fostering diversity—by race, ethnicity, gender, and professional background—within its leadership ranks.
“To bring a variety of perspectives to Federal Reserve Bank and Branch boards, we have focused considerable attention in recent years on recruiting directors with diverse backgrounds and experiences. By law, we consider the interests of agriculture, commerce, industry, services, labor, and consumers. We also are aiming to increase ethnic and gender diversity.
“Minority representation on Reserve Bank and Branch boards has increased from 16 percent in 2010 to 24 percent in 2016. The proportion of women directors has risen from 23 percent to 30 percent over the same period. Currently, 46 percent of all directors are diverse in terms of race and/or gender (with a director who is both female and a minority counted only one time). We are striving to continue that progress.”
By Brian Honea
Source
The New York Times Comes Out Against Fed Interest Rate Hike
Progressive activists opposed to a Federal Reserve interest...
Progressive activists opposed to a Federal Reserve interest rate hike gained an influential new ally on Labor Day: The New York Times editorial board.
In a Monday editorial, entitled “You Deserve a Raise Today. Interest Rates Don’t,” the Times argued that if the Federal Reserve raises interest rates in the near term, it could slow job creation at a time when there are still too few jobs to generate substantial wage growth.
“Wage stagnation is a clear sign that the economy is not at full employment, which means it needs loose monetary policy, not tightening,” the Times wrote.
The Times called the Fed a “crucial player” in efforts to undo the decades-long trend of worker wages not growing in sync with the broader economy. The paper noted that from 1973 to 2014, median worker pay rose 7.8 percent while overall productivity increased by 72 percent, a finding published Wednesday in a report from the liberal-leaning Economic Policy Institute.
An interest rate hike would exacerbate, rather than reverse, this trend by slowing wage growth, the Times editorial suggested. The paper also said that an interest rate hike would send “the wrong signal of economic health,” undermining efforts by advocacy groups to raise workers’ wages through measures like increasing the minimum wage.
It is unclear what impact the Times’ editorial will have on the Fed’s decision-making, but it is a high-profile boost for progressive activists and economists, who have long argued that a Fed interest rate hike should be tied to wage growth that is about twice as high as it is currently.
These activists, led by the Center for Popular Democracy's Fed Up campaign, note that even as the official unemployment rate declined to 5.1 percent in August -- its lowest level since April 2008 -- wages have grown 2.2 percent in the past 12 months, only marginally outpacing increases in living costs. Since wages rise when demand for workers is high enough that businesses must compete for labor, many economists attribute ongoing sluggish wage growth to the number of people who are underemployed or have given up looking for work -- figures masked by the low official jobless rate.
The Fed Up campaign sent a memo to newspaper editorial boards across the country on Sept. 1, asking them to oppose an interest rate hike in 2015. The memo, a copy of which was obtained by The Huffington Post, employs arguments that resemble those used by The New York Times. The memo warned that an interest rate hike in 2015 would "leave millions in considerable andunnecessary economic distress and would exacerbate troubling longer-term trends in wages and incomes for the vast majority of American workers and their families."
Fed Up campaign director Ady Barkan celebrated the editorial, but stopped short of claiming credit for it.
"The New York Times Editorial Board is right," Barkan said in a statement. "Workers do deserve a raise! The data is crystal clear – stagnant wages and the lack of inflation mean that the Fed shouldn’t raise rates anytime soon. The Fed Up campaign is of course glad that the Times and other leading voices are speaking up about this issue."
Fed officials have signaled for months that they plan to raise the current near-zero interest rates before the year’s end, but William Dudley, president of the Federal Reserve Bank of New York, recently indicated that a September increase may be too soon in light of market fluctuations. The Federal Open Market Committee, the central bank body charged with adjusting key interest rates, will report on whether it plans to raise rates on September 17.
Supporters of an interest rate hike argue that it is necessary to head off excessive price inflation, which, along with maintaining full employment, is part of the Fed’s dual mandate.
Source: Huffington Post
Climate Jobs for All
Other groups like the Sierra Club, Demos, 350.org, the Center for Popular Democracy, the Labor Network for...
Other groups like the Sierra Club, Demos, 350.org, the Center for Popular Democracy, the Labor Network for Sustainability, and the US Climate Action Network have also been discussing the climate jobs guarantee (CJG).
Read the full article here.
Progressives Choose Wrong Target in Opposing Prospective New York Fed Head
Progressives Choose Wrong Target in Opposing Prospective New York Fed Head
“Of course not," Shawn Sebastian, co-leader of the Fed Up coalition of advocacy groups and labor unions, told Politico...
“Of course not," Shawn Sebastian, co-leader of the Fed Up coalition of advocacy groups and labor unions, told Politico he opposes Williams in part because Williams has occasionally favored interest-rate hikes. Instead, Fed Up recommended a whole slate of “diverse” candidates for the New York Fed job, though their diversity is mainly limited to gender and skin color, not ideas. Many of them work or have worked for the Fed, while others served in various positions in the Obama administration; one is an economist for the AFL-CIO.
Read the full article here.
The Fed, Full Employment, African-Americans, and an Event that Brings It All Together
Jared Bernstein Blog - March 3, 2015 - As a tireless (some would say tiresome) advocate for full employment and the...
Jared Bernstein Blog - March 3, 2015 - As a tireless (some would say tiresome) advocate for full employment and the benefits it yields for working people, you can imagine how I was thrown by this NYT headline over a piece by economics reporter Bin Appelbaum:
Black jobless rates remain high, but Fed can’t do much to help.
“Shots fired!” as the kids say.
I find this hard to believe in the following sense. Black unemployment has averaged almost twice that of overall unemployment since the monthly data begin in 1972 (avg: 1.9, with standard deviation of 0.15, so not a ton of variation around that mean). Crudely, that implies that if overall unemployment fell from 6% to 5%, the black rate might fall more in percentage point terms, from 12% to 10%.
Next, if the Fed can push down the overall unemployment rate, which is certainly within its purview and, at a time like this, its job description, then the headline seems off.
Now, there are important nuances in play here.
First, these relationships are not always so clean. Over the long, strong recovery of the 1990s, black unemployment fell 4.5 points compared to 2.1 points for whites (and 2.5 points overall). Over the 1980s recovery, black unemployment—which was about 20% at the end of the deep early 1980s recession—fell 8.5 points compared to 4.7 for whites.
Those comparatively big declines show the disproportionate benefits that blacks reap from lower unemployment and, conditional on the Fed’s ability to lower unemployment, they belie the NYT headline. I could make similar claims based on wages and incomes, but I’m bound by secrecy for now (more on that in a moment).
However, more recently, that relationship isn’t generating such impressive results. Over this recovery, black and white unemployment have declined by similar amounts (4.5 points for blacks; 3.8 for whites). And, as Appelbaum points out, real median wages have fallen twice as much for blacks as for whites.
But that’s kinda the point: until recently this has been a uniquely weak recovery, and as such, tells us little yet about the extent to which full employment will lift the relative economic fortunes of black workers.
If we get to and stay at full employment, I’m confident it will work as it has in the past, based both on the history briefly cited above and on some truly exciting results from a new paper we’ve commissioned for our full employment project on the benefits of full employment to black workers, written by the economist Valarie Wilson from the Economic Policy Institute.
Valerie will be highlighting the results at an event we’re holding in DC on March 30th so far be it from me to steal her thunder. But she’s got some panel data regressions (which provide lots more observations and variance than the simple time series comparisons noted above) showing the impact of lower unemployment on black compared to white median wages, and man…all’s I can say is I’m employing great restraint not to just print them right here and now!
Here’s another point worth considering. Various economists on team full employment have been trying to get the Fed to hold off on its interest rate liftoff, but Appelbaum writes: “It’s not obvious, however, that holding down borrowing costs for a little longer would be an effective way to address the underlying problem. Indeed, the problem is a good illustration of the limits of monetary policy.”
That may be true in the following sense: if the Fed raises rates a little bit in 2015q4 instead of 2015q3, I doubt it will matter that much to anyone in the real economy (though financial markets would make a huge deal out of it). Similarly, if they hold to a 5.4% full employment rate and a firm 2% inflation ceiling that mustn’t be breached, or if they shift from being data driven to shooting at the phantom menace of inflation that’s allegedly hiding out of sight from the data just around the corner—well then, yeah, they won’t much help those who depend on lasting full employment to catch a break.
He’s also got a point re underlying problems. Even full employment may not be enough to reach the millions of workers with criminal records who face uniquely high barriers to the job market. I’ve written about fair-hiring policies to reach these workers, and so has Appelbaum.
But check this out: I mentioned our March 30 event. Well, another speaker on the panel that morning will be the guy from whom I learned all I know about fair-hiring, Maurice Emsellem from the National Employment Law Project.
I know what you’re thinking: what about macro, what about Fed policy? How can you call yourself a full employment maven and leave that out? Did I forget to mention our keynote speaker? A fella named Bernanke…Ben Bernanke. Here’s the flyer. Be there and be square.
Source
13 hours ago
13 hours ago