This is crucial because it reveals the central, and largely unrecognized, role of the American civil rights movement of the 1960s on the US approach to economic policy. That included a more prominent role for government in economic stimulus policies and, importantly, a broader, jobs-focused mandate for the Federal Reserve.

That role is the focus of a new report by a group of Fed policy activists known as Fed Up, a coalition of community and pro-poor groups that have been pushing the Fed to adopt a more consciously pro-full employment stance. 


Fed Up and CEPR argue that the employment mandate, while not fully realized, has already generated millions of additional jobs over time, particularly in poor communities, which are most affected by steep levels of persistent unemployment.


The debate remains highly relevant today given that some Fed officials, despite their duty to maintain maximum employment, have recently expressed curious worries about the unemployment rate falling too quickly.


"Given African American unemployment rates are consistently twice the rate of white workers in 2017, realizing true full employment continues to be vitally important today," the report says. "As past economic conditions have illustrated, when labor markets tighten, workers begin to see broad-based wage gains and persistent economic inequalities are reduced."

black white unemployment rate Andy Kiersz/Business Insider

The organizations urge Fed officials "to use all tools at their disposal to fully realize the Fed's full employment mandate."

We think this is practically beyond ridiculous -- if the Fed is "creating employment" by manipulating interest rates towards the low end, then what do these people think the effect on employment is due to the Fed's suppressing the saving-and-business-investment complex (and shunting capital towards the extremely-privileged)? Further, with no earnings from savings, people are less able to put money into small businesses. This isn't even beginning to question how genuine the Fed's promotion of employment is, given the sluggishness of wages and proliferation of non-full-time jobs.

Finally, what of the the fact (pointed out in the linked article) that African American unemployment is consistently about 2x white unemployment? If the Fed's levers, to the extent they influence employment, are clearly doing nothing to change this multiplier, isn't it beating a dead horse to continue to "lobby" the Fed to promote employment amongst those who need it the most? I.e., the Fed seems to evidently be a poor vehicle to further "MLK's Dream", even by their own numbers.

A much more complete solution (both for unemployment generally, as well as that amongst minority communities) would likely be a guaranteed jobs program. With something like that in place, joblessness is virtually defined-away (yet not without people being given something useful to do, and adequate money in their pockets), and the Fed could be freed-up to focus on financial stability and controlling inflation -- which seem a bit more up its alley (of course, once the Fed's failure on those two remaining fronts were laid bare, without full employment as a justification to keep the Fed around, people might start asking why we don't just abolish the Fed and go back to a hard-money standard and national money, perhaps with public banking thrown in...)

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