If the Fed Raises the Interest Rate, I’m One of the Americans Who Will Lose
When I worked my way through college with a job at Chipotle, I often worked a so-called "clopen shift." I was closing the store I managed at 2 a.m. and returning to open the restaurant at 6 a.m. The work schedule didn't leave much time for sleep, let alone schoolwork. But with graduation around the corner, I figured that soon everything was going to change.
I would graduate, and I would get a job that would allow me to pay the bills, take care of my 8-year old daughter, and sleep at night.
But, since graduating this past spring, I have sent out 75 resumés but have only been invited for one interview. I’m looking for jobs that just aren’t there.
When the Federal Reserve gathers Thursday at their Federal Open Market Committee meeting to decide whether or not they will raise the interest rate, I hope they will keep me and others like me in mind.
Congress created the Federal Reserve with a two-pronged mission: to control inflation and to promote maximum employment. All the data shows that there is no risk of inflation – in fact, inflation is still running well-below the Fed’s own conservative target. But the Fed is still considering raising the interest rates, even though raising rates would do real harm to American workers who are still looking for jobs or working for low-wages, like me.
A higher interest rate means that fewer jobs will be created, and that the wages of workers at the bottom will remain too low to live on. That’s because when the Fed raises rates, they are deliberately trying to slow down the economy. They’re saying that there are too many jobs and wages are too high. They’re saying that the economy is exactly where it should be, that people like me are exactly where we should be.
It was not supposed to be this way – after all, I have a business management degree. If the Fed chooses to slow down the economy I may have to give up on getting a job I'm qualified for – the kind of job that I went to school for. I could find a job at McDonalds or Taco Bell, and go back to a work life that will leave me sleepless and struggling to support my daughter. That would be painful for me and my family and bad for the economy. I cannot imagine that this is what Fed officials are looking to do.
And yet, the Fed is considering a rate increase, even though working families – especially Black and Latino working families –are still struggling. Today, 19.5 percent of Black people are unemployed or underemployed, and 15.8 percent of Latinos are unemployed and underemployed. For Black high school graduates in the 17-20-year-old range who haven’t enrolled in college, the unemployment rate is over 50 percent.
If the Fed raises interest rates, we are ones who lose.
That the conservative powers in the Federal Reserve would even consider raising the interest rates shows us a lot about who they’re prioritizing in their decision. It shows us who the Fed is looking out for: the wealthy, Wall Street, and bankers. They are willing to sacrifice the livelihoods and aspirations of young people like me, whole communities of color, and low-income workers all purportedly to fight an inflation threat that doesn’t even exist.
The Fed’s decision on Thursday should be simple. One of the Fed’s mandates is to foster full employment, and wages still have not shown signs of significant growth since the financial crash. That’s a clear sign that America is far from full employment — and the Fed has not yet fulfilled its mandate.
Many in the Fed are claiming that our economy is in recovery, but for who? For Black and Latino Americans, the recovery hasn’t come yet. This week, we’ll see if the Fed is serious about promoting maximum employment for all Americans or just watching out for the few who are already doing well.