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Ranking Member Waters, Senator Warren Reintroduce Bill Requiring the Fed to Close Racial Employment and Wage Gaps
Washington, DC, June 22, 2023
Tags: Federal Reserve
Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, and Senator Elizabeth Warren (D-MA), announced they reintroduced the Federal Reserve Racial and Economic Equity Act, legislation that would require the Federal Reserve to use its existing authorities to close racial employment and wage gaps and report on how the gaps change over time. This comes during this week’s statutorily-mandated hearing where Federal Reserve Chair, Jerome Powell, appears before both the House and the Senate to discuss the latest developments in monetary policy and the performance of the U.S. economy.
“In the spirit of Juneteenth, we must all be reminded that racial equality is a dream that our country has still yet to realize. As it stands, the racial wealth gap is widening and Black families and other communities of color are suffering as a result,” said Ranking Member Waters. “The Federal Reserve Racial and Economic Equity Act will help ensure that the Fed plays a role in addressing inequality by creating a new racial justice mission at the Fed to eliminate racial and economic disparities in all of its work. This legislation builds on recent work by the Fed to ensure there is robust data published on racial economic disparities when they testify before Congress so that we can better monitor and close these gaps to ensure our economy provides prosperity for all. It also complements President Biden’s executive orders to strengthen equity-advancing requirements for all agencies, including encouraging independent agencies like the Fed to comply. We need all hands on deck, including at the Federal Reserve, to take action to address racial equity.”
The Federal Reserve Racial and Economic Equity Act:
The legislation was inspired in part by a study published in 2020 by Janelle Jones, former chief economist at the Department of Labor, and Jared Bernstein, who recently was confirmed by the Senate to serve as the Chair of President Biden's Council of Economic Advisers. Jones and Bernstein found that “Historical estimates of the natural rate [of unemployment] reveal that black unemployment has never fallen below those estimates…” even though the overall rate of unemployment has. Federal Reserve officials have acknowledged that they have a role to play in addressing racial inequality, including through an essay by Atlanta Federal Reserve President Raphael Bostic shortly after the murder of George Floyd.