The Fed Has a ‘Responsibility’ to Help Reduce High Unemployment in the Black CommunityRoundup
tags: inequality, Federal Reserve, full employment
Ayanna Pressley has served as the U.S. Representative for Massachusetts’ 7th congressional district since 2019. David Stein is a UC President’s Postdoctoral Fellow in the Department of African American Studies at UCLA. He is the author of the forthcoming book, Fearing Inflation, Inflating Fears: The Civil Rights Struggle for Full Employment and the Rise of the Carceral State, 1929-1986.
As uprisings against police brutality and systemic racism grip our nation, every institution must reckon with its contributions to the problem of black and brown unemployment and take responsibility towards crafting the solution.
The Federal Reserve is no exception.
During a recent appearance before the House Financial Services Committee, Fed Chairman Jerome Powell testified that he was “tempted to say all of [the Fed’s] policies are focused on that problem.”
Yet historically, Fed policies, including under Powell’s leadership, suggest otherwise.
Raphael Bostic, President of the Atlanta Federal Reserve Bank, recently argued that the Fed “can play an important role in helping to reduce racial inequities and bring about a more inclusive economy.”
The Fed’s responsibility lies with what historian Carol Anderson calls “the kindling”—the preparation for the fire—rather than its catalyst. The kindling, she said recently, “is that bureaucratic violence that systematically destroys Black communities, that systematically erodes their citizenship.”
In the 1970s, as economic prospects for Black communities deteriorated, civil rights leaders including Coretta Scott King and Congressman Augustus Hawkins renewed calls for a federal jobs guarantee. By 1978, a coalition led by Mrs. King helped push through a bill authored by Hawkins and Senator Hubert Humphrey affirming the Fed’s dual mandate for maximum employment and price stability—a point that Fed Chair Jerome Powell was reminded of in February.
But by 1979, Hawkins was already warning that the bill’s mandate was being violated, as it quickly became clear that the Fed was more interested in guarding against inflation than pursuing maximum employment—sacrificing the economic prospects of Black workers along the way. In Professor Anderson’s terms, the Fed had, in effect, systemically eroded their citizenship.