Why Diversity Matters at the Federal Reserve
Why Diversity Matters at the Federal Reserve
There’s no question that race and gender matter in determining people’s economic fortunes. African Americans’...
There’s no question that race and gender matter in determining people’s economic fortunes. African Americans’ unemployment rate is typically twice as high as that of whites. The racial wealth gap has widened since the financial crisis, when African Americans and Hispanics—who had a disproportionate share of their wealth tied up in their homes—disproportionately suffered from subprime loans and foreclosures. The Federal Reserve’s Survey of Consumer Finances finds that the median wealth of a white family in 2013, the last year studied, was $134,008. For Hispanics, it was just $13,900. For African-Americans, $11,184. And as everyone knows, or should, women still make 79 cents for every dollar men make.
These deficiencies are more likely to be ignored when our most important economic policymakers don’t reflect the faces of all Americans. Yesterday, 127 Democratic members of Congress wrote to Federal Reserve chair Janet Yellen about the lack of diversity at the central bank. “The leadership across the Federal Reserve System remains overwhelmingly and disproportionately white and male,” the letter notes. Led by Senators Bernie Sanders and Elizabeth Warren, this high-level challenge also castigates the Fed for being dominated by former and current executives of financial institutions and large corporations, rather than people with backgrounds in academia, labor, or consumer organizations.
The voices of those left behind most egregiously in the economic recovery are simply not present in Fed deliberations.
Momentum to fix the Fed’s diversity problem grew on Thursday when Hillary Clinton endorsed the viewpoints expressed in the letter. Her spokesperson Jesse Ferguson told The Washington Post, “Secretary Clinton believes that the Fed needs to be more representative of America as a whole and that commonsense reforms—like getting bankers off the boards of regional Federal Reserve banks—are long overdue.”
The Fed’s lack of diversity might actually violate the law. Under the Federal Reserve Reform Act of 1977, regional Federal Reserve bank directors are required to “represent the public, without discrimination on the basis of race, creed, color, sex, or national origin, and with due but not exclusive consideration to the interests of agriculture, commerce, industry, services, labor, and consumers.” The original Federal Reserve Act only mandated representation from agriculture, commerce, and industry.
It’s unclear what enforcement of that 1977 requirement would look like. But clearly the Fed isn’t living up to it. The members of Congress rely on a February report from the Center for Popular Democracy, organizers of the “Fed Up” coalition, which has pressured the central bank to adopt pro-worker policies. According to their figures, 83 percent of Federal Reserve board members are white, and 72 percent are male. Among the twelve regional Fed bank presidents, only Neel Kashkari of the Minneapolis Fed is non-white, and only Esther George (Kansas City) and Loretta Mester (Cleveland) are female. And among voting members of the Federal Open Market Committee (FOMC), which makes monetary policy decisions, it’s even worse: All ten currently serving members are white.
The lack of occupational diversity is also pretty stark. The Center for Popular Democracy studied the regional feds’ boards of directors, finding that 39 percent represent financial institutions. The Fed’s role as a key supervisor of major banks makes this highly suspect—especially considering there is no mandate for financial interests to be represented on the Fed board.
Another 29 percent of the Fed regional directors represent commerce and industry. Only 11 percent come from community, labor, consumer, or academic organizations. Even representation from the service sector, which has an overly non-white workforce and has expanded in recent years, has shrunk as a percentage of Fed bank-board members relative to 2010, the last time the boards’ makeup was studied.
It’s unusual for members of Congress to take such a public stand on the Federal Reserve, given their mindfulness of central bank independence. But they are recognizing that the lack of diversity has an important effect on economic policy. A more diverse Fed might pay more attention to how far communities of color are from full employment when deciding whether or not to raise interest rates, which they are now deliberating. A more diverse Fed might not be as consumed with the concerns of finance and industry, and their desire to keep inflation and wages low. It might consider how banks have traditionally preyed on communities of color, and target its supervision activities to reflect that.
The voices of those left behind most egregiously in the recovery are simply not present in Fed deliberations. The members of Congress cited a recent blog post by former Minneapolis Fed president Narayana Kocherlakota, who said that “there is one key source of economic difference in American life that is likely underemphasized in FOMC deliberations: race.” Kocherlakota searched transcripts of FOMC meetings from 2010 (the most recent ones released). That entire year, African American unemployment stood at 15.5 percent or above. But, writes Kocherlakota, “Based on that search, my conclusion is that there was no reference in the meetings to labor market conditions among African Americans.”
Traditionally, public pressure on the central bank has come from the right, from the likes of Ron Paul’s “End the Fed” movement. Progressives were largely absent from the conversation, despite the Fed’s central economic role. No more: Thursday’s letter to Yellen is the biggest success yet for the Fed Up campaign, launched two years ago to amplify the voices of communities that didn’t benefit from the recovery. The campaign has brought together labor and community groups to demand that the Fed take its mandate to maximize employment seriously—taking into account all communities, not just affluent ones. And now Fed Up’s views have become dominant in the Democratic Party.
In addition to the hefty names of Sanders and Warren, co-signers include 116 House Democrats, more than half of the caucus, as well as the ranking members of the Financial Services Committee (Maxine Waters) and the Monetary Policy Subcommittee (Gwen Moore), the committees with oversight of the Fed. And Clinton’s endorsement of Fed Up’s sentiment puts most of the ideological spectrum of the party on the side of reform.
But what does reform look like? The Center for Popular Democracy’s February report recommends that each regional board contain at least one member from a labor group, a community organization, academia, and a community bank or credit union. A separate reform proposal from former Yellen advisor Andrew Levin includes a number of ideas, including banning anyone affiliated with a financial institution from serving as a Fed director.
These ideas can be congressionally mandated. That will take time, of course, but the movement has begun to get Democrats off the sidelines to pressure the Fed. When Yellen testified before the House and Senate in February, giving her semi-annual Monetary Policy Report, she received questions about the lack of diversity from 15 different members of Congress. Yellen expressed concern that, among other things, no African American has ever led a regional Federal Reserve bank in U.S. history.
The fact that political pressure can make a difference was again signified by the quick response of a Fed spokesman to Thursday’s letter. The Fed statement said the central bank has “focused considerable attention in recent years on recruiting directors with diverse backgrounds and experience.” Those aspirations have not yet translated into results, however, even after the Fed established an internal diversity office in 2011.
It’s hard for the traditionally cloistered Fed to ignore concerns when they come from high-level Democrats. And just having ordinary workers in the public debate already diversifies the Fed, in a sense. No longer can they simply be responsive to Wall Street without further discussion.
BY DAVID DAYEN
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Janet Yellen, the first woman Fed chair, proved the skeptics wrong and got fired anyway
Janet Yellen, the first woman Fed chair, proved the skeptics wrong and got fired anyway
On February 3, Federal Reserve Chair Janet Yellen, the first woman to lead the central bank and likely the most...
On February 3, Federal Reserve Chair Janet Yellen, the first woman to lead the central bank and likely the most qualified nominee ever for the post, will exit the Fed, leaving a legacy described as “near perfection” and with an “A” grade from a majority of economists.
And yet in 2014, the US Senate confirmed Yellen by a vote of 56-26, the lowest number of “yes” votes a confirmed Fed chair has ever received.
Read the full article here.
Bill Would Make Maryland Employers Set Work Schedules Earlier
As Labor Day approaches, advocates in Maryland are pushing for a change in how workers receive their schedules....
As Labor Day approaches, advocates in Maryland are pushing for a change in how workers receive their schedules.
Take Hilaria, who lives in Gaithersburg and works at a fast food restaurant. (That's all she'll say on the record, fearing potential reprisal from her employer.) Hilaria says she often doesn't receive her weekly work schedule until right before she has to start it.
"Sometimes it three to four days before the schedule [starts]," Hilaria says. "So we don't have enough time for activities — like for my daughter in school, or for my appointment with a doctor."
Advocates for workers argue Hilaria's story is not uncommon for those in the restaurant and hospitality industries. They're pushing the Maryland General Assembly to approve a measure next year that would make employers issue schedules three weeks in advance. It's called the Fair Work Week Act.
Del. David Moon of Montgomery County says it would provide protections for workers who don't have many.
"Schedules change. You're asked to fill in for people at the last second. It's a busy night and all of the sudden you have to jump in and completely alter your schedule. And if you can't, you're often made to find a replacement yourself," Del. Moon says.
A similar bill never received a vote during this year's session in Annapolis. Nationwide, Fair Work Week bills have been more successful at the city and county level. San Francisco approved a similar measure last year, and Albuqueque, New Mexico, is currently debating one.
Source: WAMU 88.5
Lawmakers Call for “Fair Work Week” for Workers with Changing Schedules
WTNH News 8 - April 27, 2015, by Kent Pierce - Once you hit adulthood, life becomes a balance between your personal...
WTNH News 8 - April 27, 2015, by Kent Pierce - Once you hit adulthood, life becomes a balance between your personal life and work. But, for people who deal with a constantly changing schedule, having a life outside of work can be tough.
Which is why lawmakers and advocates are stepping up and calling for a “fair work week.” They’re joining forces with the people who deal with unpredictable schedules to make that happen.
Connecticut may be the wealthiest state in the nation, but for every Greenwich millionaire, there are a lot of other folks getting by on hourly wages. That’s not necessarily bad. What this report says is bad for workers is the way some employers schedule their hourly workers.
The Center for Popular Democracy says, nationwide, 3 out of 5 Americans are hourly workers. In Connecticut, 885,000 people are hourly workers. That’s about 57 percent of the workforce, and about a third, 300,000, get very little notice about what hours they have to work.
That’s very tough for anyone with family or childcare responsibilities, or for workers trying to better themselves by taking some college classes, or anyone who works two jobs to support a family. There are some organizations working to get some policies in place to force employers to structure their schedules differently and give workers some notice.
Some employers, like retail chains, say they depend on last-minute scheduling to deal with sick calls or busy shopping days, and they can’t afford to pay workers to come in when they’re not really needed.
This report will be released in Hartford Monday morning at a press conference with some of those workers, some of the organizations, and Congresswoman Rosa DeLauro.
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80 Arrested in DC Protesting GOP Health Care Bill
80 Arrested in DC Protesting GOP Health Care Bill
Capitol Police arrested 80 people protesting the Republican health care bill in Washington, DC, reports CNN. Over 100...
Capitol Police arrested 80 people protesting the Republican health care bill in Washington, DC, reports CNN. Over 100 protesters from across the United States gathered outside GOP lawmakers’ offices on July 10 to try to stop the Republican bill—dubbed the Better Care Reconciliation Act (BCRA)—that would repeal and replace the Affordable Care Act (ACA, or Obamacare).
Read the full article here.
Climate Jobs for All
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.
Concerns About New Part-Time Work Trends and Proposed Remedies
The Diane Rehm Show - August 7, 2014 - The number of people working part-time who would rather work full-time is almost...
The Diane Rehm Show - August 7, 2014 - The number of people working part-time who would rather work full-time is almost double what it was seven years ago at 7 million people. Despite signs of economic recovery, many businesses say they are still struggling and depend on part-time workers, especially those who work on-call. New federal data show that almost half of all part-time workers under age thirty-two work unpredictable hours, leaving them with reduced paychecks and scrambling for child-care. A discussion about the latest trends in part-time work and the push for new laws that protect employees. Listen to the full program here.
Disney, PacSun, and Other Major Retailers Give Surprise Christmas Present to Employees
Disney, PacSun, and Other Major Retailers Give Surprise Christmas Present to Employees
This season, nearly 50,000 employees at six major retailers nationwide are getting a gift that will reduce their work...
This season, nearly 50,000 employees at six major retailers nationwide are getting a gift that will reduce their work stress and get them some holiday cheer: An end to on-call scheduling.
New York Attorney General Eric Schneiderman and eight other attorneys general announced this week that Disney, PacSun, Aeropostale, Carter's, David's Tea, and Zumiez have agreed to stop using on-call scheduling after an investigation was opened into the welfare concerns of this business model.
The six retailers said they have migrated to a "pool arrangement system."
On-call scheduling forces employees to call the store they work at one to two hours ahead of their schedules to find out if they will or won't be needed at work that day. Companies have used this system to keep labor costs low over the years.
"On-call shifts are not a business necessity and should be a thing of the past," said Schneiderman in a statement. "People should not have to keep the day open, arrange for child care, and give up other opportunities without being compensated for their time."
"I am pleased that these companies have stepped up to the plate and agreed to stop using this unfair method of scheduling," he said.
"When working parents are forced to hold large parts of their days up until the last minute — with no guarantee of work or pay — it is impossible for them to plan ahead for things like spending time at the dinner table or helping [kids] out with homework," said Elianne Farhat, Deputy Campaign Director in the Fair Workweek Initiative at Popular Democracy. "The research is clear that when employees have reliable schedules with adequate hours, retention and productivity go up."
Related: Shift Change: Just-in-Time Scheduling Creates Chaos for Workers
In April 2015, Schneiderman's office sent letters to 15 major retailers, including Abercrombie & Fitch, Forever 21, American Eagle, Uniqlo, Vans, Coach, and BCBG Max Azria, addressing his concern over the welfare of on-call workers and the legal wage in certain states like New York, where employers must pay employees at least four hours of pay for being on call.
The letters and investigation prompted Abercrombie & Fitch, Gap, J.Crew, Urban Outfitters, Pier 1 Imports, and L Brands (parent company of Bath & Body Works and Victoria's Secret) to swiftly end their on-call practices.
Social media users celebrated Schneiderman's announcement with appropriate holiday spirit, thanking him for giving "a voice" to those who struggled to be heard, and ending a "horrible practice."
The letters were signed and supported by the attorneys general of California, Connecticut, the District of Columbia, Illinois, Maryland, Massachusetts, Minnesota, New York, and Rhode Island
by DAKSHAYANI SHANKAR
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How Trump's Criminal Justice Plan Is Really More For-Profit Incarceration
How Trump's Criminal Justice Plan Is Really More For-Profit Incarceration
The DOJ and the Trump administration seem to be working to expand private prison profits at the expense of communities...
The DOJ and the Trump administration seem to be working to expand private prison profits at the expense of communities of color...
Read the full article here.
New group advocates for $45B to fight opioid epidemic
New group advocates for $45B to fight opioid epidemic
Advocates from around the country are working to pressure lawmakers to provide billions of dollars in funding to...
Advocates from around the country are working to pressure lawmakers to provide billions of dollars in funding to address the opioid epidemic.
Read the full article here.
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