Janet Yellen, the Federal Reserve chairwoman, sounded the alarm on Friday about rising economic inequality. Speaking in Boston, she said recent Fed research showed the share of wealth held by the lower half of households fell from 3 percent in 1989 to 1 percent in 2013. She also pointed to a decline in small business creation. Sen. Bernie Sanders’ welcomed Yellen’s speech but urged Yellen and the Fed to take concrete actions. By law, the Fed’s dual mission is to promote full employment and price stability. With Labor Department statistics putting real unemployment at 11.8 percent last month, Sanders said the Fed should take concrete actions to create decent-paying jobs. Increasing jobs that pay livable wages and provide good benefits for working families, he said, is the best way to reverse the growing gap in income and wealth inequality in America.
“Janet Yellen is right. Income inequality is the worst it has been since the 1920s. Now that we have a Fed chair who recognizes the problem, the Fed must act as boldly to rescue the disappearing middle class as it did when it bailed out too-big-to-fail banks. The Fed has got to demand that big banks significantly increase affordable loans to small businesses to create jobs, instead of parking money at the Fed and making risky bets on Wall Street.”