Recently, the Federal Reserve made its most important economic policymaking decision since the financial crash. And it was a big mistake. The Fed just announced plans to slow the economy, justifying its decision to raise interest rates by pointing to signs of recovery since the financial crash. But for people like me, there hasn’t been a recovery.
Like many people my age, I was unsure of what I wanted to do when I graduated high school in 2012, but I didn’t have the privilege of having college paid for and didn’t want to be saddled with student loan debt. I made the decision to stay at home and work in order to save up and move out on my own. I was fortunate to find a job working with children, first as a substitute teacher, and eventually as a teacher’s assistant, but the pay was not enough for me to make ends meet.
I got a job working at a retail store, but I am never scheduled for more than 25 hours per week. Some weeks, I am scheduled for as little as 8 hours per week, with no advance notice. This makes it almost impossible for me to predict my income. I recently took a second job as a waitress making $2.13 per hour plus tips.
Working multiple low-wage jobs is exhausting and stressful and I’m still no closer to being able to move out on my own or start school. All I want is the opportunity to achieve my American Dream of working a job that I love or attending college. Fed officials have declared we are near full employment and have used that to explain their decision to raise interest rates. Unfortunately, this analysis overlooks many stories like mine. In fact, the number of workers who want to work full-time but cannot get the hours they need jumped up to 6.1 million in November.
The signal the Fed sent with its decision is essentially this: get used to the economy as it is, with stagnant wages, twice as many people as before the recession working part-time because they can’t find full-time work and double-digit unemployment in many black and brown communities. By intentionally slowing down the economy, Fed officials have deprived too many people of a chance to get back on their feet.
The Fed is sacrificing jobs that we could be getting and all the wage gains we could win if we kept interest rates low, presumably because they are concerned about the threat of inflation, which remains very low. Most of those unnecessary sacrifices will be borne by communities of color, especially right here in Atlanta, where the Black unemployment rate remains twice as high as the white unemployment rate, at nearly 10 percent.
Years of near-zero interest rates may have helped nurse an ailing economy back from the brink. But with so much work to do, it is unclear why the Fed believes its work is finished. The vast majority — an astounding 95 percent — of the economic growth since the recession has gone to the top 1 percent of earners. For this recovery to truly be complete, conditions will need to improve for everyone, not just the wealthiest. Until unemployment is reduced significantly for Black and Latino workers, working people will not have the bargaining power they need to demand higher wages.
The real value of wages for most American workers was declining even in the years before the recession and that figure has grown far too slowly in the years since. The Fed must view wage growth as a good thing, and commit itself to building a full-employment economy where all workers share in the recovery. In order to do that, Fed policymakers must resist calls to further raise interest rates in 2016. Working families like mine are depending on them.
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