Fed Chair Yellen: Fed Will Continue to Support Labor Market
Federal Reserve Chair Janet Yellen told a conference of community development professionals that their work is crucial but can't succeed without two other factors.
One is the courage and determination of the people the groups serve, many of whom have faced severe hardships during and since the Great Recession. "It might seem obvious, but the second thing that is needed to help people find jobs … is jobs," Yellen said. "No amount of training will be enough if there are not enough jobs to fill."
Fed works through financial markets to help Main Street
At the 2014 National Interagency Community Reinvestment Conference in Chicago, Yellen discussed the Fed's efforts to strengthen the economy to help Main Street. She noted that because the labor market remains weak by historical standards, she believes the central bank needs to continue some of its "extraordinary steps" to spur the economy.
Those steps and the Fed's more traditional monetary policy influence interest rates. By holding down interest rates, Yellen explained, the Fed's intentions include making homes more affordable and reviving the housing market, making it cheaper for businesses to hire and expand, and reducing the price of a car to transport a worker to a new job and kids to school.
"When the Federal Reserve's policies are effective, they improve the welfare of everyone who benefits from a stronger economy, most of all those who have been hit hardest by the recession and the slow recovery," Yellen said.
Recovery feels like a recession
She detailed the gradual progress of the economy and labor market since the recession. The Fed chair acknowledged that the recovery feels like a recession to many Americans and appears that way in some data. For example, the national unemployment rate of 6.7 percent is higher than its peak during the 2001 recession, she pointed out.
"It certainly feels like a recession to many younger workers, to older workers who lost long-term jobs, and to African Americans, who are facing a job market today that is nearly as tough as it was during the two downturns that preceded the Great Recession," Yellen said.
To reinforce this point, she related the stories of three people who lost jobs during the recession and have struggled to find work that pays as much as their old jobs did. Those stories convey important truths that the unemployment rate alone cannot, she said. Those realities, Yellen added, include the plight of the long-term unemployed, who suffer because many would-be employers steer clear of them even if they have the necessary experience and expertise.
Perhaps most important, the personal stories "are a reminder that there are real people behind the statistics, struggling to get by and eager for the opportunity to build better lives," Yellen said.