Pressley Grills Powell on Need for Federal Job Guarantee to Achieve Full Employment

February 24, 2021
Press Release
Powell Confirms Monetary Policy Alone Cannot Get Us to Full Employment

Pressley: “The federal government can create jobs at the scale and speed necessary to meet this moment.”

Video (YouTube)

WASHINGTON – In a House Financial Services Committee hearing, Congresswoman Ayanna Pressley (MA-07) questioned Federal Reserve Chairman Jerome Powell about the need for a federal job guarantee to help the United States achieve full employment. In response to her question line, Chairman Powell confirmed that monetary policy alone cannot fulfill the goal of full employment.

Last week, Congresswoman Pressley, along with economists and advocates, unveiled a historic resolution calling for a federal job guarantee. The resolution, which builds on the legacy and work of generations of Black women in the Civil Rights Movement, will help the United States achieve the promise of full employment, ensure a just, equitable recovery, establish a more resilient and inclusive economy, and begin to close racial and gender income gaps.

A full transcript of her exchange with Chairman Powell is available below and a full video is available here.

Transcript: Pressley Grills Powell on Need for Federal Job Guarantee to Achieve Full Employment

House Financial Services Committee

February 24, 2021

REP. PRESSLEY: Thank you, Madam Chairwoman and thank you, Chairman Powell.

When we last spoke in front of this committee one year ago, you thanked me for sharing the history of these Humphrey Hawkins hearings and the legacy of Coretta Scott King, and her advocacy for a federal jobs guarantee. Today, we're in the midst of the greatest economic disaster since the Great Depression. And during the height of that crisis, the federal government created 4 million jobs in the winter of 1933.

Chairman, you've noted that the goal of maximum employment will require more than supportive monetary policy. Would a federal jobs program succeed where monetary policy and the private sector have been unable to meet the need?

CHAIRMAN POWELL: So I was speaking really about the longer term and the need to have policies that support peoples, that give them the skills and training that they need to take part, but also policies that support participation in the labor market. I think it's up to you to pick the particular policies, but I do think it can't just be a matter of monetary policy, because we can help over the course of an expansion. But there are longer term issues that will support maximum employment over time that are really in your hands.

REP. PRESSLEY: Agreed and the federal government can create jobs that meet the scale and speed necessary, I think, to meet this moment.

Last week, I introduced House Res[olution] 145, A Federal Jobs Guarantee, calling for just that. A central demand of the civil rights movement, a job guarantee is about more than just jobs and the dignity of work. It's about the necessary public services, and critical but long-neglected physical and care infrastructure we can provide. A federal job guarantee is our opportunity to achieve a just recovery, as well as long term economic equity.

In this pandemic, as you're aware, Mr. Chair, women have lost 5.3 million jobs--a million more than men. Women of color have sustained the highest unemployment rates. In fact, in December alone, 154,000 women--Black women--left the workforce, the result of lost jobs and the caregiving crisis. This reality is devastating, but you recently noted that even the sobering unemployment data that we have has incredible gaps in measurements. Specifically, that if we consider the near 4 million people who have stopped looking for jobs, the actual unemployment rate would not be 6.3%, as reported by the Bureau of Labor Statistics, but close to 10%.

So how does, Chairman Powell, the undercounting of unemployment prevent us from achieving an equitable economic recovery? And what does this mean for women of color specifically?

CHAIRMAN POWELL: I think that the numbers--this is by the way, it's not a criticism of the Bureau of Labor Statistics, they're very transparent about what they do. And conceptually, we, I think that you include those people who were in the labor force working, and now they're out of the labor force, but they're actually unemployed, from my way of thinking. You know, women and women of color in particular are overrepresented in those public facing service sector jobs, which have been so hard hit. In hotels and restaurants. And so this downturn has just been terrible from the standpoint of affecting a group that already was financially less able to withstand those kinds of things. It's from that standpoint, particularly since we had begun to make significant progress, some progress on those issues, those longstanding disparities. So, you know, we're in a situation where the best thing we can do is get those sectors open as soon as possible, and in the meantime, give people the support they need so they can continue the lives that they've had.

REP. PRESSLEY: Sure. That undercounting, though, I do believe it's just another way that our economy renders invisible and further marginalizes those workers, consistently, who are the last ones hired and the first ones fired, particularly true for our disabled workers, LGBT, Black women, those who have been disproportionately, to your point, employed in the service sector, low wage jobs, that have been deemed essential, but are often treated as if they are dispensable. And that's not true only in a pandemic, but especially so.

So Chairman Powell, looking to past recoveries, for the workers shouldering the heaviest burdens of this pandemic, will they recover their jobs as quickly as they lost them? What are your projections there?

CHAIRMAN POWELL: We don't have great confidence in our in our ability to project that, but I would say as the economy reopens, there should be a wave, really, of people going back to work in those sectors. The question is going to be, some of them will not be able to go back to work because, you know, we're hearing their surveys suggesting that those companies have been figuring out ways to do their business with fewer workers. And they are doing that all the time, but that process may have been accelerated because of this episode. So it's pretty likely that some of those people will not be able to go back to their old jobs and they're going to need continued support and help to find their way in this post pandemic economy which will be a different economy.

 

# # #