Fed chair Janet Yellen visited Chelsea on Oct. 16, where she heard from real people seeking real jobs. The visit was a precursor to a two-day conference, Inequality of Economic Opportunity, sponsored by the Federal Reserve Bank of Boston, at which she was the keynote speaker. The Boston Fed has devoted more than a decade of time and effort to the study of income inequality, so when Yellen arrived in Chelsea to visit a neighborhood employment services office, it was hardly a casual drop-in.
The critical issue: Jobs. Yes, cheek-by-jowl with Boston and Cambridge, host to the country’s fastest growing life sciences, financial and tech industry hot spots, are people struggling to raise families on wages of less than $10 an hour. They live in municipalities that struggle to maintain basic services on weak tax bases. The recent rebound in housing prices at the lower end of the market is a product of investor purchases, not grassroots earning power and the nascent economic recovery hasn’t reached many of those who were the first affected in the economic downturn.
Inequality starts with a lack of access to information and a fundamental inability to analyze information and predict consequences. An article highlighting the practices of for-profit colleges in The Boston Globe last week contained four profiles of former students that revealed either their naïveté or their economic vulnerability, or both. The waste of the resources that went into their education (and that of thousands more like them) is nothing short of a tragedy.
Job searching is another issue. Networking? Hard to do if everyone you know is also looking for a job. Storefront enterprises that claim to match people with jobs (for a fee) are suspect, to say the least. Job-training programs that target the naïve and economically vulnerable are costly and ineffective. Once again, we’re talking about the need for an individual to be able to tell the good from the false.
Other barriers to economic advancement include having children early and without a viable support system. This is not a single-gender issue, as much as some would like to make it so.
Last but far from least is housing – not only its condition and price, but its proximity to the jobs available. Reports of commutes on public transportation of one to two hours one way are common. And if the jobs don’t pay well or have regular hours, people need to be aware of the lost opportunities – for example, time to attend legitimate job training programs – that result from a logistically-poor housing choice.
In her Fed speech, Yellen also noted the importance of inheritances in advancing the prospects of succeeding generations. But that can’t happen until all of the above issues are addressed.
Yellen has made employment issues a priority since becoming Fed chair. She implicitly realizes that you can’t legislate economic well-being down – you’ve got to educate up. Failure to recognize this will result in society throwing good money after bad, and bad legislation after good.
