Washington, DC - Today, U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – helped introduced legislation to require the Federal Reserve to use its existing authorities to close racial employment and wage gaps and report on how the gaps change over time.
“The Fed must take action now to support the workers who make this economy run,” said Brown. “That means providing help for immediate needs and also addressing systemic racism and economic injustice. If we fail to act, it will hurt many people and make inequality worse. The Fed can make sure companies that get bailed out keep paying their workers; that companies stop stock buybacks and dividends on Wall Street, and adopt policies that combat inequality rather than supercharge it. The Fed cannot lend to big businesses and leave workers behind like we saw during the last crisis. It’s time for all of us to be better stewards of the economy.”
Gaps in economic outcomes for individuals of different races and ethnicities have persisted throughout different economic cycles*. In January 2020, for example, the white unemployment rate was 3.1 percent, while Black unemployment was nearly double at 6.0 percent and the Hispanic unemployment rate was 4.3 percent. These disturbing gaps have been heightened by the COVID-19 pandemic. The bill's introduction comes amid growing calls for the Federal Reserve to take a more active role in addressing racial inequality, including in recent op-eds from Janelle Jones and Jared Bernstein, and Raphael Bostic, President of the Federal Reserve Bank of Atlanta.
The Federal Reserve Racial and Economic Equity Act:
The legislation was led by U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee Subcommittee on Financial Institutions and Consumer Protection, Representative Maxine Waters (D-Calif.), Chairwoman of the House Financial Services Committee, and Senator Kirsten Gillibrand (D-NY) and is co-sponsored by Senators Edward J. Markey (D-Mass.), Bernie Sanders (I-Vt.), Dianne Feinstein (D-Calif), Cory Booker (D-NJ), Chris Van Hollen (D-Md.), Richard Blumenthal (D-Conn.), and Representatives Carolyn B. Maloney (D-NY), Nydia Velasquez (D-NY), Brad Sherman (D-CA), Al Green (D-TX), Emanuel Cleaver (D-MO), Al Lawson (D-Fla.), Michael San Nicolas (D-Guam), Ayanna Pressley (D-MA), Stephen Lynch (D-MA), Jesús G. "Chuy" García (D-IL), and Sylvia Garcia (D-TX).