(Reuters) – The Federal Reserve’s new framework will allow for slightly higher inflation to help close employment gaps but governments and employers need to do more to make sure those gains reach lower-income workers, Philadelphia Fed President Patrick Harker said Friday.
Challenges accessing child care or broadband internet, as well as the lack of a college degree, can make it difficult for many workers to land well-paying jobs and more should be done to help remove those barriers, Harker said.
“Building an equitable workforce recovery is not just in my view a moral necessity, but an economic one as well,” he said in remarks prepared for a virtual conference.
Many of the jobs that were lost during the pandemic may not return, increasing the need for programs that help prepare workers for jobs with better pay and career opportunities, Harker said.
Harker cited research from the International Monetary Fund finding that higher earners are more likely to save minor increases in income while lower income workers are more prone to spending those gains, which contributes to GDP growth.
“Get money into the hands of people most likely to spend it, and you’ll see a multiplier effect throughout the broader economy,” Harker said.
(Reporting by Jonnelle Marte; Editing by Chizu Nomiyama)
