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Reading, PA — Discussing his organization’s newly launched Economic Growth & Mobility Project (EGMP) on Friday, Philadelphia Fed President Patrick T. Harker made the case that inclusive growth has wide-ranging economic benefits, while inequality and poverty “are detrimental to the economic well-being of the country.” The remarks came during a keynote address to the Pennsylvania Economic Association’s annual meeting.
“Childhood poverty alone costs the U.S. close to $500 billion annually,” Harker said. He added that research shows that when additional income goes to the top quintile of earners, GDP falls, whereas GDP rises when increased income flows to the bottom quintile. “Then there is the simple fact that this vast and diverse country is made up of micro- and macroeconomies that are intertwined and overlap and have ripple effects beyond city, county, or state lines. Our economic fortunes are tied to one another.”
Harker outlined the EGMP’s “action labs,” which focus on practical applications for research. The project will look at the multiple contributors to economic growth and well-being, with a particular focus on workforce development, skills training, and transportation.
The Philadelphia Fed is currently working with the city of Scranton on equitable transit issues in and around that city. “Transportation isn’t generally seen as an exciting topic … But it’s an important one nonetheless,” Harker said. “The basic arithmetic is that if you can’t get to a job, it doesn’t matter how many there are. And if you can’t fill the jobs, your business can’t expand.”
Harker hopes the projects resulting from the EGMP’s action labs will be transferrable. “We’re working with a local foundation to help bring people together to address Scranton’s specific needs,” he said. “Then, hopefully, we can export that model and the lessons we learned to similar cities around the country.”