As the world watches the working class town of Ferguson, Missouri, the Fed is meeting in the secluded Jackson Hole, Wyoming to debate the future of work.
As part of the Kansas Fed’s annual conference, Janet Yellen delivered her first, closely watched, speech to the conference as Fed chair. In it, she carefully hedged her words, but agreed there’s been little to no inflationary pressure and that, as a result, she’ll resist the more hawkish members of the Fed’s call for an end fiscal stimulus.
Financial analysts and journalists have been looking for signs, reinforced by recent Fed minutes, that the Federal Reserve may be close to ending their program of fiscal stimulus.
The events in Ferguson were not in a vacuum, with its latent tension in part arising from racial hierarchies of political power and economic influence replicated around the country.
They also reflect the market’s role in perpetuating racial inequality. As my colleague Catherine Ruetschlin pointed out:
Racial disparities in labor markets, wealth accumulation, and economic mobility persist even in the best economies as the legacy of past discrimination disadvantages people of color in transactions with ostensibly race-neutral rules.
A recent Economic Policy Institute fact sheet on the Fed makes a similar point: while there’s still slack in the economy, “minority workers & non-college educated workers are the hardest hit. For instance, roughly one in five blacks and roughly one in six Hispanics are currently unemployed or underemployed."
That’s why all Americans should be a part of the Fed's decision-making.
Usually, the Jackson Hole conference is rife with investors and policymakers, with normal people nowhere to be seen. As a result of that imbalance, Isaiah Poole at the Campaign for America’s Future argues that a conference on work would be better situated in Ferguson, Missouri (or any number of similar working class towns) than Jackson Hole. He argues that "while a police officer’s bullet was the spark, the agonies and frustrations rooted in a lack of jobs and economic opportunity provided much of the fuel for the flames. Dousing those flames, repairing the damage and eliminating the conditions that would breed more fires in the future means working toward a full employment economy."
To make sure that policymakers keep real people in mind, the Center for Popular Democracy, along with Demos and several other organizations, released a letter calling on the Fed to keep its easy money policies in place until wages begin to rise, and the racial disparities of the labor market are addressed.
To bolster the point, CPD crashed Jackson Hole today with what the bankers would least expect: a real person. Shemethia Butler, an underpaid McDonald’s worker, said of going to the conference:
“I’m going to Wyoming to let these bankers in Jackson Hole know that we are not in recovery,” said Butler, 34. “I need them to understand. I need them to see where I’m coming from.”
And those complaints look like they’re beginning to be heard. From Vox:
Brooks and Raino are both members of local community organizing groups — Minnesota Neighborhoods Organizing for Change and Action United in Philadelphia, respectively — which have, with the Center for Popular Democracy, come together to try to do something that hasn't really been done before: grassroots lobbying of the Fed. And they're being heard.
According to the Center's senior attorney, Ady Barkan, the group met with Kansas Fed chief Esther George for two hours, and spoke to Fed chair Janet Yellen, Chicago Fed chief Charles Evans, and Minneapolis Fed chief Narayana Kocherlakota. The last three are sympathetic to Brooks and Raino's perspective — Raino called Kocherlakota "one of the voices in the Federal Reserve system who understands the economy is far from recovery for most of us" in an article for MinnPost — George has expressed support for raising interest rates. For people trying to lobby a generally unlobbied institution, that's an impressive start.
There's an ongoing conversation the Fed needs to have about what’s happening to workers. Letting actual workers meet with prominent Federal Reserve officials is an obvious first step. Chairwoman Yellen should keep it up.
The Fed is talking about the right questions, but let’s keep demanding that actual workers play a part in answering them.