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Philadelphia, PA — Patrick T. Harker, president and CEO of the Federal Reserve Bank of Philadelphia, told the webinar audience at the Reinventing Our Communities conference that the COVID-19 pandemic and ensuing economic shutdown have heightened inequities that were already present in American society. He presented his remarks via telephone as part of Reinventing Our Communities: Planning for Equity in Recovery – Lessons We’re Learning from COVID-19.
Harker observed that, even before the COVID-19 crisis, many measures of income and wealth inequality were on the rise, despite more than a decade of economic growth. He noted a racial component to inequality, citing data showing that white households have higher average wealth than households composed of racial minorities.
Income inequality is deleterious to the economy, according to Harker, who cited International Monetary Fund research showing that income gains at the top reduce GDP, whereas income gains lower on the income scale increase GDP growth. He observed that COVID-19 had disproportionately affected racial minorities both as a health crisis, with disproportionate fatalities among racial minorities, and as an economic crisis, with those most at risk of losing employment as both disproportionately low income and minority.
Harker, who is a voting member of the Federal Open Market Committee this year, said that efforts to reduce inequities must be “redoubled” as the economy recovers.