Systemic racism and high unemployment levels among black and Hispanic Americans create a drag on the U.S. economy, Dallas Federal Reserve President Robert Kaplan said on Sunday.
“A more inclusive economy where everyone has an opportunity will mean faster workforce growth, faster productivity growth and will grow faster,” Kaplan said on CBS’ “Face the Nation.”
Kaplan said he agreed with his counterpart at the Atlanta Federal Reserve Bank, Raphael Bostic – the Fed’s only African-American policymaker – who on Friday called for an end to racism and laid out ways the U.S. central bank can help.
The comments by the Fed policymakers follow weeks of nationwide protests against police brutality and racism after the May 25 death of George Floyd, a black man, in Minneapolis. The white police officer who knelt on Floyd’s neck has been fired and charged with murder.
“It’s in the interest of the U.S.,” Kaplan said. “The fastest-growing demographic groups in this country are blacks and Hispanics. If they don’t participate equally, then we’re going to grow more slowly.”
Kaplan said the Dallas Fed and the Federal Reserve System have been working for years to improve skills training and education for blacks and Hispanics, who have long endured a higher level of unemployment than whites.
Overall unemployment, which spiked dramatically during the shutdowns, is on the way down, Kaplan said, adding that he expects to see positive job growth starting this month.
He said fiscal policy, which is set by Congress, will be a critical element of the recovery, including unemployment benefits, possibly “restructured to create more incentives for people to go back to work,” and benefits to state and local governments.
White House economic adviser Larry Kudlow cited positive signs as the economy reopens, telling CNN, “We are in the recovery stage.”