By Paige Lower, Organizer for PA Working Families
For thirty years, the Federal Reserve has ventured out to Jackson Hole, Wyoming, for a conference the last week of August. To get to Jackson Hole, you need to take at least two flights, your last flight will be on a very small plane that lands you in the middle of Nowhere, USA, and from there you have to take a 45 minute shuttle to get to the resort.
Jackson Hole is well known for its scenic, unobstructed views of mountains. It is a place the one-percenters can go to relax and enjoy their time in an upscale, cozy atmosphere. Clearly this is not the place for the everyday American to go to in order to get information on how the Federal Reserve is going to decide the fate of millions.
For 30 years, this entity has been able to meet without opposition until organizations across the U.S. came together to join the Fed Up Coalition. The coalition has called for transparency and proper representation of the people they are supposed to be serving, and has demanded that we be a part of the election process for our regional Fed presidents. This year, I, along with six other people from Pennsylvania, made the trek to Jackson Hole to not only try to interact with the Fed, but to get a better understanding of the impact this almost secret society has on my life and the lives of those in my community.
I walked away with my eyes opened much wider to so many things, but two of them have stuck out the most. The first one is how this system has kept people of color from being able to climb the income ladder out of poverty. The second one is how our country allows for a selection of twelve people who hold our livelihood in their hands and we have zero say in the matter.
The Federal Reserve began in 1913, and it is our central banking system. It was originally designed to have three main objectives: maximum employment, stable prices, and moderate long-term interest rates. Over the years it has taken on more roles, such as regulating banks and overseeing the stability of the financial system.
Right now the Fed estimates that unemployment is hovering around 6%. That sounds great, considering where we were seven years ago. Unfortunately, that is not the whole picture. The unemployment rate of people of color is at 12-15%. The Fed has become obsessed with making sure that unemployment doesn’t get too low to keep inflation down. They insist it is because they want to keep prices low and if unemployment gets too low, then inflation will skyrocket, which is a lie. We had numerous economists among us, and all of them said the same thing: We can afford to have our inflation rate rise to a least 2%, or even 4%.
So then why is the Fed is trying to scare everyone into thinking we will have a financial collapse if we allow inflation to rise even half a percent (right now it is around 1.5%)? It’s because if unemployment drops, wages will rise, and workers will finally have some bargaining power, something they have lacked for many years.
Picture this: it is estimated that about six people show up per job opening. If you are offered the job but request a higher wage, they have five people behind you willing to take the low wage they are offering.
If unemployment drops and we approach closer to full employment, then that line may only be one person behind you and that one person may not be as qualified as you are. Therefore, you are now in a position of power to make demands on how you are treated in your workplace. Our system is designed to keep people from having that kind of influence over their employers.
It is especially true for people of color. Not only are they getting underpaid for their work, they are getting paid significantly less than their white male counterparts. White women are paid only 75% of white men’s earnings, while black women make a stunning 64% of white men’s earnings. Black men are twice as likely to be unemployed as white men.
The people who make up the Fed are the very people to dictate how you will be able to live your life, but I really doubt William Dudley, the president of the Fed in New York and formerly of Goldman Sachs, cares whether or not I am able to make my student loan payments or make my mortgage payments. Many of the people on the board were the very same people who were getting bailed out in 2007. Where is our bailout? Where is the justice for the 99% who carry the weight of the choices that these people make?
I walked into Jackson Hole thinking I had a grasp of the basics, but I was given a rude awakening. When you allow yourself to be lulled into a sense of false contentment by the very people who are pulling the strings in the background, you forget what it’s truly like out there. You allow the media to tell you the economy is fine when all across the country communities are in disrepair and people are struggling day in and day out.
No one should have to work 60 hours per week, only to be poor. We need to open our eyes to the smoke and mirrors around us and realize we are nowhere close to a recovered economy. Do you hear the people sing? I do, and 99% of us are Fed Up.