Yellen: Fight against in­equal­ity starts with full em­ploy­ment

The Star Malaysia - StarBiz - - Foreign News -

SIN­GA­PORE: Keep­ing the US econ­omy near full em­ploy­ment is lift­ing pay for un­skilled work­ers and help­ing ease in­equal­ity in the coun­try, former Fed­eral Re­serve chair­man Janet Yellen ( pic) said.

It’s im­por­tant to see the ben­e­fits that an econ­omy op­er­at­ing at full em­ploy­ment con­fers to low-wage work­ers who are typ­i­cally the most vul­ner­a­ble, Yellen said at the Bloomberg New Econ­omy Fo­rum in Sin­ga­pore yes­ter­day. She cited ex­am­ples such as un­em­ploy­ment for black Amer­i­cans de­clin­ing since peak­ing in 2010 and com­pa­nies in­vest­ing in train­ing work­ers as hir­ing be­comes more dif­fi­cult.

Most of the dis­con­tent with cap­i­tal­ism in the US stems from in­equal­ity and the stag­na­tion of wages, which dates back to the 1980s and can be traced broadly to au­to­ma­tion and glob­al­i­sa­tion, Yellen said.

“I’m tempted to say there isn’t a whole lot cen­tral banks can do” about in­equal­ity, but there are some op­tions, like fol­low­ing poli­cies to keep the econ­omy as close to full em­ploy­ment as pos­si­ble, she said.

Other steps in­clude keep­ing reg­u­la­tions in place that safe­guard the econ­omy against an­other fi­nan­cial cri­sis, the former Fed chief said.

Yellen left the Fed in Fe­bru­ary af­ter Pres­i­dent Don­ald Trump re­placed her as chair­man with Jerome Pow­ell af­ter just one term at the helm of the cen­tral bank. Hav­ing re­turned now to her role as an eco­nom­ics pro­fes­sor, Yellen has grad­u­ally be­come more vo­cal about her con­cerns on the global econ­omy and cen­tral bank­ing. – Bloomberg

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