(Bloomberg) -- Federal Reserve Chairman Jerome Powell said the coronavirus-induced slump has worsened economic inequality that has long existed in America, creating more suffering for low-income workers and minorities.
“While we are all affected, the burden has fallen disproportionately on those least able to bear it,” Powell said Friday via video conference, where he also paid tribute to the day marking the end of American slavery. “A particular cruelty of the pandemic has been its disproportionate effects on many areas that were already suffering.”
Powell and Cleveland Fed President Loretta Mester were taking part in a virtual conference about building a resilient workforce in the era of Covid-19 focused on Youngstown, Ohio, a year after the closure of the Lordstown General Motors (NYSE:GM) plant.
Juneteenth
“It is not lost on me that we are meeting on Juneteenth amid a renewed reckoning of racial injustice,” Powell said. “The pandemic has again exposed a range of troubling inequalities, most of them of long standing. As the national discussion continues, it is critical to remember that equity includes access to education, work, and economic opportunity.”
The spread of the virus has caused “immense hardship and suffering,” Powell said. “We will make our way back from this, but it will take time and work.”
The Fed leader said the goals of economic and racial progress are intertwined, citing Martin Luther King Jr.’s “I Have A Dream” speech given not far from the central bank headquarters.
Stark Realities
Noting that prior to the pandemic, the U.S. was experiencing the longest expansion on record with unemployment at the lowest level in 50 years, Powell said this bright picture painted over some glaring cracks.
“That economic good fortune had eluded pockets across the country, including Youngstown.”
Powell said his goal is to return the U.S. economy to a state similar to prior to the pandemic. In congressional testimony this week, he emphasized the Fed wants to restore a tighter labor market that creates more opportunities and lifts wages for lower-income workers.
“The path ahead is likely to be challenging,” Powell said. “But given the opportunity, I’ll always bet on the American people and on the kind of community resolve and dedication we’re hearing about today.”
(Updates with additional Powell comment in eighth paragraph.)
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