Fed Chair Powell on economic inequality

The chair of the Federal Reserve discusses the impact of low mobility and the "legacy of slavery" — and how the Fed can address it

CBS All Access
This video is available on CBS All Access

The chair of the Federal Reserve Jerome Powell told 60 Minutes that there are policies the Fed can put policies in place to help combat economic inequality.

While filming this March's 60 Minutes interview with Powell, correspondent Scott Pelley traveled with him on a listening tour of Houston's Fifth Ward. The Fed chair was in Houston to get a firsthand look at the recovery from Hurricane Harvey as part of the Fed's community development program.

While there, Pelley asked Powell why African-American unemployment, while near record lows, is nearly double that of the white unemployment rate.

"I think it's the legacy of poverty, ultimately, the legacy of slavery." Powell answered.

To address the issue, Powell said the Fed can conduct monetary policy in a way that tries to create maximum employment.

Fed Chair Powell on income disparity 01:37

In an interview in Washington, Pelley asked Powell about the country's yawning gap in wealth distribution. Although Powell acknowledged the Fed doesn't have direct responsibility for it, he did say there are policies the Fed can put in place to mollify it.

Powell addressed America's low economic mobility, relative to comparable countries. "I think that comes down to better education, better training, getting people into the labor force and putting them on the path to prosperity," he said.

The other issue relating to income disparity is stagnant wages, Powell said. He added that policies can be put in place to give people tools to take part in the economy.

"It's really rising output per hour, what we call productivity, that allows real wages to rise over time," Powell said. "It allows living standards to rise over time." 

The videos above were originally published on March 10, 2019.