Fed Chair Jerome Powell says the coronavirus recession has been a 'great increaser of income inequality' — with low-paid workers and women bearing the brunt of the fallout
by Joseph Zeballos-Roig- Fed Chair Jerome Powell said the pandemic was "a great increaser of inequality" at an online event hosted by Princeton University.
- "The pandemic is falling on those least able to bear its burdens," Powell said.
- He singled out women and hourly workers in the service industries as the segment of the population weathering the brunt of the fallout.
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Federal Reserve Chair Jerome Powell said on Friday that the economic downturn inflicted by the pandemic is slamming low-wage workers and women the hardest and accelerating inequality in America.
"The pandemic is falling on those least able to bear its burdens," he said during an online event hosted by Princeton University. "It is a great increaser of inequality."
He added: "It is low-paid workers in the service industries who are bearing the brunt of this, it is also women to an extraordinary degree."
Powell staunchly defended against the idea the Fed's response to the pandemic would wind up increasing inequality as it extend loans to large firms, saying "absolutely not" and arguing it was instead geared toward saving jobs.
"Everything we do is focused on creating an environment in which those people will have the best chance to keep their job or get a new job, or go back to their old job if they've been furloughed," he said.
The comments come as the pandemic's impact has disproportionately impacted minimum-wage workers, many of whom lost jobs as restaurants and other businesses with regular close-contact closed their doors to curb the coronavirus's spread.
A recent study from the Federal Reserve found that 40% of workers in households earning $40,000 a year or less either lost a job or were furloughed in March. That's compared to 19% of people in households earning between $40,000 and $100,000, Politico reported.
Over 40 million people have filed for unemployment over the last three months.
The central bank is slated to open or design nine emergency lending programs to alleviate the virus's impact on the American economy. It's prompted criticism from progressives who argue there are few restrictions on the Fed aid, since it doesn't mandate large companies attempt to preserve jobs or limit executive compensation.
Congress enacted those safeguards in other federal programs.
Powell has previously called for additional action from lawmakers to stem the economic freefall caused by the pandemic. In a speech earlier this month, the Fed chair exhorted Congress to consider another round of federal spending to reduce the prospect of a slow, painful economic recovery.
"Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery," he said at an online event at the Peterson Institute of International Economics.