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Fed’s Harker Says Pandemic Is Worsening U.S. Inequality

ForexMay 28, 2020 05:00PM ET
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© Bloomberg. Patrick Harker Photographer: Charles Mostoller/Bloomberg

(Bloomberg) -- The coronavirus pandemic is worsening U.S. inequality along income and racial lines, Federal Reserve Bank of Philadelphia President Patrick Harker said.

“This health crisis has not so much changed things as simply exposed, and in some cases accelerated, trends that were already present in our society,” Harker said Thursday in remarks prepared for a virtual event. “The United States went into this crisis a troublingly unequal place, beset by serious inequities in income, wealth, and opportunity.”

The Philadelphia Fed chief cited Census Bureau statistics showing U.S. income inequality in 2018 reached the highest levels in 50 years of data, as well as a St. Louis Fed study indicating that, as of 2016, the top 10% of American households controlled 77% of the nation’s wealth. He added that researchers at his own bank had found that lockdowns implemented to stop the spread of the virus had disproportionately hit employment in low-income neighborhoods and families.

“American inequality is a moral and ethical challenge to our country’s founding creed. But research shows it’s also a growing economic problem,” said Harker, who votes on the rate-setting Federal Open Market Committee this year.

“That makes sense, of course: Those who earn less money are likely to spend it, whereas high earners save,” he said. “That’s crucial because consumer spending accounts for about 70% of our country’s total GDP. Ensuring an equitable recovery from Covid-19 is critical in making sure the next expansion is not only fair but also strong and durable.”

©2020 Bloomberg L.P.

Fed’s Harker Says Pandemic Is Worsening U.S. Inequality
 

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Comments (2)
Di Did
Di Did May 28, 2020 7:49PM ET
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How about we discuss all of the corruption that has gone on between the central bank's with the Rothschilds and sending our money overseas for slush funds? We dont need the Fed in our personal lives like this. Do your jobs because we dont like your performance!
Ernie Keebler
Ernie Keebler May 28, 2020 5:43PM ET
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So do things to make it more equitable not just getting consumers enough to buy to make the rich even richer, which the current bailouts have done. Billions to corporations so they can keep executive compensation up as they layoff or cut pay of average workers doesn't help balance
 
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