The Cycle of Disparities in Economic Outcomes and Opportunities

The pandemic has shined a bright light on differences in economic outcomes, but these differences existed long before we had heard of COVID-19. Many stem from the fact that the U.S. economy does not offer the same economic opportunities to all. There are racial disparities in educational attainment, labor market outcomes, and access to credit. People born into areas of concentrated poverty or predominantly minority areas are disadvantaged over their entire lifetimes, and so are their children. These disparities are interrelated, reinforce one another, and have been propagated across generations. In today’s lecture, I will begin by explaining why I think it is important for Fed policymakers to understand the disparities in our economy and then I will walk through a set of figures that clearly illustrate these disparities to give you a sense of the magnitudes. Before continuing, let me mention that, as always, the views I will present are my own and not necessarily those of the Federal Reserve System or of my colleagues on the Federal Open Market Committee.