Yesterday, U.S. Senators Kirsten Gillibrand (D-NY) and Elizabeth Warren (D-MA), and Representative Maxine Waters (D-CA) introduced legislation to 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.
“The pandemic has further revealed and deepened significant racial disparities in wages, economic opportunity and wealth,” said Senator Gillibrand. “A hands off approach to addressing institutional racism is unacceptable. This legislation will take the long overdue step of requiring the Federal Reserve to use its power to directly combat systemic racism in our economy.”
According to a report from the Federal Reserve Bank of New York released on Tuesday, Black business ownership in New York fell by 70% from February to June. There were about 98,600 active Black-owned businesses in New York before the pandemic and there were only 29,479 as of June.
During the height of the pandemic, one in four of New York City’s Asian, Black and Hispanic workers was unemployed, compared with about one of every nine white workers, according to the NYC Comptroller’s office.
The Federal Reserve Racial and Economic Equity Act would:
- Makes Reducing Inequality Part of the Fed’s Mission: This bill adds a new section to the Federal Reserve Act that would require the Fed to carry out its functions in a way that “minimizes and eliminates racial disparities in employment, wages, wealth, and access to affordable credit.”
- Ensures that Racial Economic Disparities are Not Ignored: This legislation requires the Federal Reserve Chair to identify in his or her semiannual testimony before Congress: (1) the existing disparities in employment, income and wealth across racial and ethnic groups and (2) how the Fed is using its authorities to reduce these disparities.
- Requires Robust Reporting on Disparities in Labor Force Trends: This bill requires the Fed’s Semiannual Monetary Policy Report that the Fed releases in conjunction with the Chair’s testimony to include recent labor force trends with “a comparison among different demographic groups, including race, gender, and educational attainment.”