AFL-CIO President Richard Trumka delivered the following remarks to a gathering of labor leaders who have positions within the Federal Reserve or are active in the campaign to push the Fed to adopt pro-worker policies:
Good morning. Thank you all for being here. I just spent the week in Pennsylvania, Ohio and Michigan holding town halls on the future of NAFTA. At each stop, I met regular working people who are hungry to rewrite the economic rules so they work for us, not the wealthy few.
Working people understand that the economic system and the political system are not working for us. I want to reiterate a point I made at each of the events last week. We can’t fix the rules if we don’t fix NAFTA. But we also can’t fix the rules if we only fix NAFTA. We need a full court press to win a wide range of economic rules that allow us to win good jobs, higher wages, great benefits and the freedom to form a union.
And the Federal Reserve is a great place to start. An everyday union member is likely to ask: what does the Fed have to do with me? The answer is everything. Federal Reserve policy decisions have deep ramifications in the daily lives of working families.
The thing we hear about most is interest rates. There are news stories almost daily about whether the Fed will cut rates, now, or in the future. For the record, given miniscule wage growth, I believe it is time for a rate cut.
The Fed also regulates the banking and financial sectors and defines full employment. While these issue areas seem wonky, they have a direct impact on our nation’s ability to provide workers a rising standard of living.
That’s why we are using our voice to demand that the Federal Reserve fulfill its mandate to maintain full employment. Full employment is critical for shared prosperity because it creates an environment where working people can bargain for a proportional slice of increased productivity. In other words, full employment boosts real wages. If wages are flat, as they have been for decades, then full employment has not been achieved, no matter how low the unemployment rate gets. African-Americans, Latinos and women in particular share in wage gains when we are at or near full employment. But, that is not happening.
Too often, the Fed has been a prisoner to overblown concerns about inflation and prioritized price stability over a raising wages economy. This has stolen productivity gains from a generation of working people. Now—the central tenet of the American Dream—that our children can inherit a better life than ours—is in serious jeopardy. And that is a threat to our entire democracy.
We were pleased to see a shift toward full employment during Janet Yellen’s and now Chairman (Jerome) Powell’s tenures. But each monthly jobs report with low unemployment and stagnant wages is a reminder that we are not there yet. This is a message a group of national labor leaders and I brought directly to Chairman Powell in April.
Powell was clear. He said he wanted to see wages go up. He agreed that income inequality was a serious problem. And he committed to an ongoing conversation with the labor movement at all levels. That’s where you come in.
Some of you have board seats on one of the 12 Federal Reserve Banks located across the country. And some of you hold other positions. All of you are active in our campaign to influence the Fed’s policy making. I want to thank you for raising the voice of working people within the Federal Reserve. Although some of you do this work alone, I want to assure you that the entire AFL-CIO has your back.
That’s why we’re gathered here today: to come together, learn from each other and strategize about the best ways to maximize our collective impact. How do we engage the Fed consistently and effectively? What issues should we be raising? What are you hearing in your region? Let’s have a discussion. If you hold an official position within the Fed, please let me know what it is. Who wants to go first?