CPD IN THE NEWS

Weekly Press - December 17, 2014, by Nicole Contosta - Charter Schools have become a divisive issue in Philadelphia. Supporters swear to their effectiveness. Critics argue that they lack accountability.

Both sides of the charter school debate were heard last Tuesday, December 9th. That’s when the Americans for Democratic Action (ADA), hosted the Philly Charter School Forum: Who’s Minding the Store?

Panelists included Feather Houstoun from the Philadelphia School Reform Commission (SRC); Jurate Krokys, founding principal of the Independence Charter School, Kyle Serette of the Center for Popular Democracy and author of Fraud and Financial Mismanagement in PA’s Charter Schools; and Barbara Dowdall, retired public school teacher and former ADA board member.

Solomon Leach, Philadelphia Daily News Education Reporter, moderated. Leach began the evening’s discourse by asking Houstoun to comment on the evolution of charter schools in Philadelphia.

Houstoun, who spent most of her career in managing care, transit and welfare problems, cited her experience with "good oversight." But when Houstoun joined the SRC three and half years ago, "I was really surprised […] about the incredibly precarious situation the school district was in. Now," Houstoun continued, "we’re living within our means, but we’re horrifically under-resourced."

And with regard to charter schools, Houstoun said, "I was really dumbfounded by how badly over the course of time the [Philadelphia School] District had organized itself to assure that we were getting good value for children in charter schools."

To Houstoun, getting good value for the city’s children proves relevant given the fact that "40 percent of our children are being educated at charter schools that are separate from the district apparatus."

But, Houstoun continued, "We must accept responsibility for these things." And in Houstoun’s opinion, part of the problem resulted from the fact that "the District did not set up standards for academic performances. There were no systematic annual check-ups about what they were doing in terms of finance, corporate or academic measures."

Houstoun cited the fact that the SRC only renews charter schools on a five-year basis as contributing to the lack of oversight. However, at the same time, Houstoun expressed optimism when it comes to moving forward with the city’s charter schools. Over the past year, the SRC performed an overhaul of the charter school office, placing Julian Thompson at the helm. "We’re operating within charter school law that gives us the obligation to monitor and review charter schools," Houstoun emphasized.

From the charter school perspective, Krokys said that she hasn’t always had the best experience working with the SRC.

"I’ve been in the charter world for about 14 years," Krokys said, "In the past and sometimes the not so recent past—what it was—the relationship and the process of authorization and renewal were secret, haphazard, and hostile. And I’m not exaggerating. It was always up for grabs."

In answering Leach’s question about what she’s learned from really effective charter schools, Krokys said, "Community partners and stakeholders are one of the things that can be done with all schools—but it’s especially important for charter schools. Site admission selection for parents and staff—there’s nothing like feeling that you have chosen something and were not defaulted to it," Krokys stressed. "That makes a big difference in partnership.

The same thing," Krokys continued, "goes for staff. The staff is not assigned; they’re not grazing until they get their retirement. Staff is selected to work in a specific school."

Serette discussed the history and evolution of charter schools. That began on March 31, 1988. "That’s when our chamber got in front of the press club in DC and announced a new type of school, something that would help figure out the most complicated problems in our education system. And it was the charter school."

As Serette explained it, the charter school concept was designed as a "calculated risk to figure out if we could figure out something that could then be exported into the public system. And," Serette continued, "This makes sense because you don’t want to take a calculated risk and export it into the whole system. I think we forgot that lesson as we were expanding throughout the nation.

We have a situation where we have the largest charter school system in the country-K12 Inc.," Serette continued, "It’s fully funded by public dollars but it’s traded on the stock exchange. The goal of being on the exchange is to make money. So we have slightly diverged from the original mission of charters."

With regard to the effectiveness of charter schools, "they have had a meaningful impact," Serette said, adding, "They have taught us some really smart things to figure out and export to our system. The first charter school started in 1992. And now we have 43 states with charter school laws."

But, Serette noted, citing an investigation of 15 states, his office found, "about 136 million in charter school funding that was abused, that was used for fraud. To us, that was an alarming number."

In PA, Serette explained that he didn’t think the state government "did a great job of regulating the system. So we have here, two auditors looking after a system that has revenue of 700 million, auditing 86 charter schools.

Dowdall, in answering Leach’s question about academic accountability for charter schools said, "Rather than start with the charter school in the quest of academic accountability, we might journey back to the government entities that established, regulates and monitors them namely the PA State Legislature the Governor of PA, the State Department of Education and the SRC.

While the public schools whose assumed inadequacies sparked the takeover," Dowdall continued, "they were more or less placed in a giant petri dish; we more or less organized a dizzying away of name changes, administrative changes, etc. Test prep came to rule and push out libraries, librarians, music, art and other extra curricular activities. Funding cuts led to the disappearance of nurses, counselors, teaching assistants, custodial help and the financial oversight provided by operations personnel.

Twenty three neighborhood schools," Dowdall continued, "were shuttered. And 40 new charters are supposed to open. Since the SRC has the authority to approve schools," Dowdall said, "maybe they should do so based on the actual needs of the district rather than the whims and desires in some highly funded charters."

As the discussion continued, Leach asked Houstoun "how has the introduction [of reversing] no-charter re-imbursement in PA influence the SRC assessment when it comes to renewing charters?"

Leach’s question references the fact that Government Corbett eliminated the $100 million for charter school re-imbursement to the Philadelphia School District in 2011.

Houston cited the cancellation of the re-imbursement as painful. "For every child that’s added to charter school system, we can’t take off $10,000 for expenses. If," Houstoun explained, "we can restore the charter re-imbursement that was in place, it would alleviate the first level of pain that we’re suffering in the district right now."

Leach asked Krokys to comment on how to rectify the public perception of charter schools when taking into account those that are underperforming or fraudulent.

Krokys began her answering by stressing, "There are thousands and thousands of children who would not have had one chance in their neighborhood school. And a lot of them came through my doors and are now graduating from college."

When it comes to addressing inadequacies in Philadelphia charter schools, Krokys said, "It took a while for the charter school community to finally say, ‘yes. There are some charters that need be closed.’ Yes," Krokys said, "we are weary of the few bad apples because that’s what ends up in the papers. And that’s what ends up tainting everything else."

With regard to K12 Inc., "Who the hell gave permission for a for-profit to run a charter school?" Krokys asked. "Whose fault was that?"

To Serette, Leach asked, "One of the original aims of charter schools was to be a model for public schools. But that got lost in the shuffle over time. How do you think we can go back so that public schools can benefit from the successful roles of charters?"

According to Serette, "The narrative in the US is that the public school system is broken, right? And you can’t just get a good education so you have to be saved by a lot of other systems. But the truth is," Serette continued. "We have a good public school system in upper class and upper middle class neighborhoods. Those tend to be wonderful. And then you have the struggling sectors where people can’t make ends meet and we’re trying to figure that out."

Leach then asked Dowdall how charter and public schools could reach a middle ground.

To Dowdall, "It’s about equity. It’s about resources. Whether it’s traditional or charter, it can be defined. It’s about small classes with libraries where the students can be guided."

And in Dowdall’s opinion, "There needs to be an agreement between those on the board that authorization renewal for charter schools should be set at three years as opposed to five."

For more information on the ADA, visit Youth http://www.phillyada.org.

Source

 

Reproduced with permission from Daily Labor Report, 97 DLR C-1 (May 20, 2014). Copyright 2014 by The Bureau of National Affairs, Inc. (800-372-1033) <https://www.bna.com/>

Bloomberg BNA - May 19, 2014, by Rhonda Smith — Although employee scheduling software is helping employers control labor costs and boost productivity, its impact on retail and restaurant workers is far more bleak, advocates for employees told Bloomberg BNA May 8-19.

“In New York, we're interviewing workers at all big retail chains—Gap, Banana Republic and others,” said Stephanie Luce, an associate professor of labor studies at City University of New York. The interviews are part of an ongoing research project focused on scheduling challenges facing retail workers in New York City.

“What is prevalent in our interviews is just huge frustration with scheduling,” she said. “It's arbitrary. It feels like it's unpredictable. And it can change from week to week or season to season. So this concern about who gets to set the schedule, and do employees have any voice or protections in that, is very prevalent.”

‘On Call' Scheduling Has Drawbacks

The Retail Action Project, a New York-based campaign sponsored by the Retail, Wholesale and Department Store Union, released a video May 1 highlighting the conundrum retail employees face daily over their work schedules. RWDSU is an affiliate of the United Food and Commercial Workers.

“Even though the technology enables [employers] to predict 80 percent of their labor costs well in advance, they are scheduling workers according to the smaller percentage of hours that they can't predict,” Carrie Gleason at the Center for Popular Democracy said.

“Workers are unable to get sufficient hours, and are forced to endure ‘on call' scheduling, where they must wait by the phone to see if they'll be called upon to work,” RAP organizers said on the union's website. “They can't take other jobs, or do anything else that would interfere with their unstable, unpredictable work hours.”

The video is part of an effort to educate workers and policy makers about the need for “fair, stable and predictable schedules for millions of underemployed low wage workers in one of America's biggest job creating industries,” RAP said.

Employment of retail sales workers is projected to grow 10 percent from 2012 to 2022, according to the Labor Department. That growth is about as fast as the average for all occupations, the agency said, but because many workers leave retail there will be a large number of job openings in that sector.

There were 4.6 million retail jobs in 2012, the agency said. It projected that 450,200 will be added in that sector by 2022.

Wanted: ‘Family-Sustaining' Practices

Carrie Gleason, director of a new initiative at the Center for Popular Democracy that focuses on work scheduling issues, told Bloomberg BNA May 16 that new policy protections are needed to ensure “family-sustaining practices” in low-wage sectors.

The technology currently available could be used to actually improve scheduling practices for workers, she said.

“Burgeoning low-wage industries are now relying heavily on a part-time workforce and increasingly using scheduling technology according to fluctuating market demand,” she said. The ultimate result for workers is “very little say in how they work and when they work.”

Gleason also said, “Even though the technology enables [employers] to predict 80 percent of their labor costs well in advance, they are scheduling workers according to the smaller percentage of hours that they can't predict.”

Giving workers more access to the technology would allow them to self-schedule, she said, adding that this would really elevate the quality of workers' jobs. “But, unfortunately, companies like Macy's are not using the technology to the workers' potential,” she said.

Unions have criticized Macy's for not considering employee seniority when using scheduling software to decide who works and when.

Some Retailers Address Scheduling Concerns

Retailers and restaurants in some cities have taken steps to address workers' scheduling concerns, either because they made a business decision to do so or union members pushed for changes during negotiations over collective bargaining agreements.

Employers cited as trailblazers include United Parcel Service of North America Inc., Costco Wholesale Corp., Lord & Taylor, In-N-Out Burgers Inc., and, after new contracts were negotiated, Macy's and Bloomingdale's Inc. in New York City.

All part-time workers at Costco receive their schedules at least two weeks in advance and are guaranteed a minimum of 24 core hours each week, according to a policy brief the Center for Law and Social Policy and two other groups released in March (49 DLR A-6, 3/13/14).

“We want people to work for us who consider us a career,” Mike Brosius, the company's assistant vice president of human resources, said in the brief. “Long-term employees are more productive and serve the needs of our customers better. So we give our employees what's fair and what they need to make a living.”

In a Harvard Business Review article titled “Why ‘Good Jobs' Are Good for Retailers,” Zeynep Ton, an adjunct associate professor of operations management at the Massachusetts Institute of Technology's Sloan School of Management, highlighted Costco, Trader Joe's, QuikTrip and Mercadona, a supermarket chain in Spain. She said these retailers invest in their employees and, in return, reap healthy profits.

“Not surprisingly, I found that unpredictable schedules, short shifts, and dead-end jobs take a toll on employees' morale,” Ton wrote. “When morale is low, absenteeism, tardiness, and turnover rise, increasing the variability of the labor supply, which, of course, makes matching labor with customer traffic more difficult.”

Unions have pushed to shape employers' scheduling policies in collective bargaining agreements.

Union Turns to NLRB for Help

UFCW Local 888, in East Rutherford, N.J., filed an unfair labor practices charge April 28 with the National Labor Relations Board against Century 21 Department Stores LLC. The family-owned, discount retail clothing company operates eight stores in New York and New Jersey and plans to open another one in Philadelphia, a company spokeswoman said May 20.

In its charge, the union alleged that Century 21 refused to bargain “over the implementation and effects of a change in the work schedule system at its Manhattan facility, in violation of the National Labor Relations Act.”

“Until two years ago, we had no issue with scheduling,” Max Bruny, president of UFCW Local 888, told Bloomberg BNA May 16. “Everyone had a fixed schedule. The model was full-time employment. We had members there for 40 years. They had a good schedule [and] good predictability.”

Now, workers are being assigned fewer hours or shifts that require them to work later than they traditionally have—regardless of seniority.

The new scheduling system is “hard on the workers' life—a nightmare,” Bruny said.

Employees who have worked for Century 21 for decades are now being scheduled to work erratic hours, sometimes at night, he said.

“Grievances we're filing relate to workers not being able to schedule for school or take care of sick family members,” Bruny said.

ACA Could Lead to Drop in Workers' Hours

Neil Trautwein, vice president and employee benefits counsel at the National Retail Federation, told Bloomberg BNA May 19 that the Affordable Care Act could be a factor in employer decisions about how many hours employees are scheduled to work. The NRF represents retailers, chain restaurants and grocery stores.

ACA rules mandate that employers with 50 or more full-time workers provide health care coverage. Anyone who works at least 30 hours a week is considered a full-time employee. A tax penalty of as much as $3,000 per employee is levied for noncompliance.

“The 30-hour definition under the ACA is unnecessary and distorts how we manage employees,” Trautwein said.

The NRF supports the Save American Workers Act (H.R. 2575), proposed legislation that calls for raising the threshold from 30 hours per week to 40 hours per week. The bill's backers say this would preserve employee wages and working hours.

“There will be an [employer] incentive, particularly for less well-performing employees, to be held below 30 hours,” Trautwein said. “That's a natural consequence of the ACA structure.”

He added that employee scheduling software also helps employers move high-performing workers into certain positions at certain times.

“Broadly speaking, part-time jobs have been valued in retail and chain restaurants, particularly over the years because of flexibility they allow to wrap work around school or other family responsibilities,” Trautwein said. “A lot of part-time workers aren't interested in working a large number of hours.”

Union Wants More Input About Schedules

UFCW Local 888, which represents more than 2,500 workers at Century 21, would like more input about the new scheduling system and its impact on workers, Bruny said.

“[Century 21] says we should negotiate for all the stores at one time in two years,” when the union's five-year contract with the stores expires, he said.

“Our argument is, ‘This is a drastic change in the workers' lives,' ” Bruny said. “Workers are becoming part-timers overnight. I think that should trigger negotiations. That has to be bargained collectively before a change can be made.”

Bruny also would like to negotiate with Century 21 over whether hourly employees can be cross-trained so they are prepared to work in different store departments should they agree to do so based on the scheduling system. “That would make it easier on the workers,” he said.

Without negotiating over such matters, Bruny added, “we are losing quite a few longtime, full-time workers.”

A Century 21 spokeswoman declined to discuss the NLRB charge, but said to ask “Kronos directly for a statement.”

Kronos Inc. is a workforce management company in Chelmsford, Mass., that sells electronic scheduling systems to organizations. The company did not respond to a Bloomberg BNA request for comment on the NLRB charge UFCW filed against Century 21.

Macy's West Scheduling Proposal

During recent contract negotiations in California, leaders of UFCW Local 5 in San Jose described as “problematic” a Macy's West proposal to implement an electronic scheduling system the company calls “My Schedule Plus.”

“While the computer-based program would create greater scheduling flexibility and an opportunity for more hours for those that want them,” the union said May 5 in an online post, “without modification it would eliminate base schedules and ignore seniority around shift selection.”

Mike Henneberry, a spokesman for UFCW Local 5, told Bloomberg BNA May 8: “At first the company said, ‘We can't change it.' But it turned out they could.”

Macy's did not respond to a Bloomberg BNA request for comment.

Henneberry said Kronos created the Macy's scheduling system.

Charles DeWitt, vice president of business development for Kronos, said such software can be adapted to suit employers' unique needs.

“If the employer wants to maintain a base schedule or respect seniority, it can,” he told Bloomberg BNA May 12. “Various employers have different policies. With the Kronos system, we've tried to capture all that in a system and let retailers, hospitals, and manufacturers put their policies in place.”

Respecting Employee Seniority

Members of RWDSU Local 3 in New York in 2012 ratified a five-year collective bargaining agreement with Bloomingdale's that gave some 2,000 employees at the company's flagship store in New York City more control over hours and scheduling, the union said (86 DLR A-8, 5/3/12).

RWDSU said at the time that scheduling flexibility in the Bloomingdale's contract went further than any other union contract with a large retail company. Under the contract, senior employees have first choice of their preferred hours, and all workers are able to choose one weekend off a month and the late nights they want to work.

A 2011 contract settlement covering some 4,000 workers at Macy's in New York City also improved employees' control over their scheduling, the union said (121 DLR A-13, 6/23/11).

Allen Mayne, RWDSU's director of collective bargaining, told Bloomberg BNA May 9: “The main problem with the Macy's system is it did not recognize an employee's seniority. It lumps all employees together in the same pool and hours are divided up depending on your availability.”

This has a detrimental impact on long-term employees, especially in retail, Mayne said. “In a union environment, where benefits are even better, many employees have many years of seniority,” he said.

RWDSU was able to negotiate in the contract a work rule that allows employees with seniority to have priority access to the scheduling system, Mayne said.

“But there's not enough oversight,” he said. “This is done kind of on the honor system, but people can get in there and input out of seniority order.”

Luce at CUNY said there's a “disconnect” between how sophisticated and helpful to employers the scheduling software has become in the past 15 years and how rudimentary it remains for most retail employees.

“Employees are still submitting their scheduling requests on paper or going into the store to look at their schedules,” she said. “Clearly, the software could allow for employees to be at home and swap shifts. But they are not given access to those systems.”

Source

NEW YORK — Over a dozen activists descended on a building where Federal Reserve chair Janet Yellen and her three living predecessors were speaking on Thursday to demand that the Fed bail out Puerto Rico’s cash-strapped government.

The demonstrators, who are affiliated with the progressive Fed Up coalition, distributed Puerto Rican flags and empanadas as Puerto Rican music played outside Manhattan’s International House, a student residence. Yellen was there for an unprecedented panel discussion alongside past Fed chairs Ben Bernanke, Paul Volcker and Alan Greenspan, who participated via videostream.

The activists were joined by Puerto Rican lawmaker Manuel Natal, who was in town to participate in a panel discussion hosted by City Council Speaker Melissa Mark-Viverito on Friday.

“They have two mechanisms under their authority to help Puerto Rico: one is to provide a bailout to Puerto Rico similar to the one they did to banks, the same banks that are now in Puerto Rico making a fortune out of our fiscal situation,” Natal said. “And the second would be to buy our debt” and charge Puerto Rico interest rates that are lower than the market would offer.

The activists claim that since the Fed had the authority to buy trillions of dollars of bad debt from Wall Street banks after the 2008 financial crisis, it can do the same for the debt of Puerto Rico.

Economic observers with knowledge of the Fed’s functions consider that argument dubious. Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics who was an economist at the Fed Board of Governors for many years, said that the Fed is not allowed to buy municipal debt — of the kind Puerto Rico owes — that comes due over a period longer than six months. He also said such a purchase would be inconsistent with the Fed’s dual mandate of maintaining price stability and full employment.

The Fed has “never bailed out any insolvent entity as far as I know. They always demand collateral sufficient to cover any loan,” Gagnon said, as the Fed did when it provided aid to major U.S. banks.

Natal, the lawmaker, also believes some of Puerto Rico’s debt has been issued unconstitutionally and can therefore be nullified.

Greg Williams, a spokesman for Jubilee USA, a coalition of faith-based groups that advocates for global debt relief policies, declined to endorse a Fed bailout, but suggested the Fed could broker a deal instead.

“We support a proposal where the Fed facilitates a restructuring process,” Williams said.

More important than the details of the demonstrators’ demands, however, is the protest’s political symbolism in the midst of a heated battle over Puerto Rico’s future. The demonstration was perhaps the most colorful in a series of political moves and counter-moves by the Puerto Rican government and its sympathizers on one hand and the commonwealth’s bondholders and their allies on the other. Both seek to influence a congressional rescue plan that could enable Puerto Rico to restructure its debts.

Members of Congress from both parties are negotiating changes to the draft of a relief bill released last week by the House Committee on Natural Resources, which has jurisdiction over U.S. territories.

But many in Puerto Rico, and some progressives in the mainland United States, object to the Washington-based federal oversight board the bill would introduce to audit Puerto Rico’s finances and recommend reforms. Under the terms of the bill, Puerto Rico would pursue voluntary compromises with its creditors; failing that, the board could greenlight court-supervised debt restructuring that would force bondholders to accept the losses.

Those critics of the draft bill — including lawmaker Natal — view the board as having the trappings of American colonial rule over Puerto Rico.

Critics of the draft House bill say it has the trappings of American colonial rule over Puerto Rico.

They also argue that Puerto Rico should not have to meet any conditions to gain access to court-supervised debt restructuring. Puerto Rico, unlike the fifty mainland states, lacks the power to grant its municipalities and public corporations federal bankruptcy protections.

Puerto Rico is taking a multi-pronged approach to secure debt relief that appears designed to increase its leverage with creditors and win terms that are as favorable as possible.

The island’s governor, Alejandro Garcia Padilla, signed a bill on Wednesday that would empower him to declare a state of emergency and enact a moratorium on the island’s $70 billion debt. Puerto Rico’s next major debt payment — a $422 million tranche — comes due on May 1.

Daniel Hanson, a Puerto Rico specialist for the financial analysis firm The Height, wrote in an email newsletter that Puerto Rico’s creditors will likely challenge the moratorium in court, where Puerto Rico’s “playbook is not likely to be persuasive to American courts adjudicating the contracted rights of creditors.”

Garcia Padilla has said the island is incapable of paying its debts in full. Puerto Rico has enacted spending cuts and tax hikes in recent years that have stifled its economy and depleted its social services, creating a situation that many people already characterize as a humanitarian crisis.

Puerto Rico also argued for the right to enforce a local bankruptcy law that went before the Supreme Court last month after lower courts had blocked the island from putting it into effect. The high court is expected to rule in the case by late June.

In Congress, Democrats sensitive to Puerto Rico’s plight — and solicitous of the votes of former island residents living on the mainland — hope to dilute some of the proposed oversight board’s sweeping powers.

The Height’s Hanson, however, expects subsequent iterations of the House bill to be “more creditor-friendly,” he wrote.

Meanwhile, organizations representing Puerto Rico’s powerful creditors have stepped up their efforts to amend the legislation to limit the restructuring authority that the island would get. The commonwealth’s bondholders include a significant number of so-called vulture funds, which are hedge funds that have bought its debt from other creditors at discounted rates on the promise of recovering the obligations’ original full-dollar value.

A group called Main Street Bondholders, which claims to represent ordinary retirees, has created a web site attacking the draft House bill for granting Puerto Rico “super Chapter 9” bankruptcy protections.

Main Street Bondholders is associated with the conservative seniors group 60 Plus, which played an active role in the fight against the Affordable Care Act. The New York Times reported in December that 60 Plus is funded by a handful of large, anonymous donors and was recruited into the effort by a Republican public relations firm that also represents BlueMountain Capital, a creditor that has been outspoken against federal government help for the island.

The fight over whether to help Puerto Rico has reached the bottom rung of American discourse — cable news ads paid for by undisclosed donors. The ad, which ran on CNN and was paid for by the Center for Individual Freedom, urges Congress to “stop the Washington bailout of Puerto Rico.” The Virginia-based conservative group does not disclose its donors. It was founded in 1998 to combat government restrictions on smoking.

The CFIF did not respond to a Huffington Post question about whether any of its funders have a financial stake in the outcome of the Puerto Rico bailout.

By Daniel Marans & Ben Walsh

Source

Federal Reserve policymakers Wednesday voted to keep the central bank’s benchmark interest rate near zero percent and offered no new hints of when it would enact the first hike since 2006.

After a two-day policy meeting, officials released a monetary policy statement that was little changed from June in its guidance about what they would need to see before raising the interest rate.

11:40 a.m.: An earlier version of this article said the Fed's policy statement was identical in its guidance about what officials would need to see before raising the interest rate. The statement contained a small wording change.

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An increase would come when members of the policymaking Federal Open Market Committee have “seen some further improvement in the labor market” and is “reasonably confident” that the low inflation rate will move back toward the Fed’s 2% annual goal in the near future, the statement said.

The statement, approved by a 10-0 vote, left open the possibility of a rate hike after the Fed’s next meeting, in September. But it did not lock policymakers into taking that step in case upcoming economic data, including jobs reports for July and August, indicate the economy isn’t strong enough to handle higher interest rates.

The Fed said recent data suggest the economy “has been expanding moderately in recent months” and that the housing market “has shown additional improvement.” The Fed’s view of the labor market improved, with the statement saying there had been “solid job gains and declining unemployment.”

But Fed policymakers raised concerns about what they called soft business investment and exports.

And the statement noted inflation continued to run well below the Fed’s 2% annual target, attributing that partly to declines in energy prices as well as the lower cost of imports caused by the rising value of the dollar.

For the 12 months ended May 31, the price index for personal consumption expenditures, the Fed’s preferred gauge, was up just 0.2%.

The central bank has kept its benchmark federal funds rate near zero since December 2008 in an attempt to boost economic growth during and after the Great Recession.

As the economy has strengthened, pressure has built on Fed policymakers to start raising the rate.

Fed Chairwoman Janet L. Yellen has said that she expects an interest rate hike this year but that policymakers would continue to keep rates low for “quite some time” to continue providing support for the economy.

A survey last month by financial information website Bankrate.com found that a majority of Wall Street experts expected the Fed to raise its short-term interest rate in September.

Fed policymakers are closely watching economic data to determine when to hike the rate for the first time since 2006.

The economy shrank at a 0.2% annual rate from January through March, largely because of unusually bad winter weather and a labor dispute that slowed activity at West Coast ports.

The Commerce Department is expected to report Thursday that growth returned this spring. Analysts are forecasting that the economy expanded at a 2.9% annual rate in the second quarter.

The job market has shown solid gains in recent months, and the unemployment rate in June dropped to 5.3%, the lowest in more than seven years.

But wage growth has been sluggish. The Center for Popular Democracy has criticized the Fed for not focusing enough on wage improvements as a key factor in deciding when to raise rates.

And even with the overall economy performing better in the second quarter, growth this year is expected to be subpar. The Fed’s most recent projection, made in June, is for overall economic growth of just 1.8% to 2% for the year, which would be the worst since 2011.

Source: The Los Angeles Times