Fed Chair Janet Yellen has long been a student of the role that jobs play in family financial stability and the larger economy. To get some firsthand stories during her Massachusetts visit yesterday, she visited an employment agency in Chelsea, a city that was one of the winners of the Boston Fed’s Working Cities Challenge competition.
From Binyamin Appelbaum at the NY Times today: “Janet L. Yellen, the Federal Reserve chairwoman, went into the field Thursday to do some informal research about the health of the labor market. Ms. Yellen visited a two-year-old nonprofit program that is helping people to find work in this formerly industrial city just north of Boston and heard from organizers and job seekers that it is getting a little easier to earn a living.
“She also heard, however, that without the intensive support of the Connect program, many of its beneficiaries think they might still be looking for work — showing how difficult it can be for the many people who have lost jobs to find new ones.
“ ‘Two years ago, at the beginning, to have anyone get hired was a huge deal,’ Anne Auerbach, a counselor for the Connect program, said after meeting Ms. Yellen. ‘Now some people are getting hired. It has gotten somewhat better.’ Ms. Yellen will speak Friday morning at a conference on economic inequality hosted by the Federal Reserve Bank of Boston, which organized Thursday’s field trip.”
Ylan Mui at the Washington Post interviewed other Federal Reserve officials on the importance of employment and community development, including our own bank preseident.
“ ‘When you think about maximum employment, monetary policy can deal with the cyclical,’ Boston Fed President Eric S. Rosengren said in an interview Thursday. ‘If we were able to change the mindset in some of these cities, the employment picture in these cities would clearly be better.’
“In Chelsea, Yellen will tour a program called Connect, which focuses on financial security. The program includes support groups for those with credit problems to veterans returning to the workforce, individual financial counseling and job skills training. About a third of participants do not have a high school diploma.
“The three-year-old program seems to be gaining traction where monetary policy cannot. Ann Houston, executive director of the Neighborhood Developers, one of the organizations involved in the project, said those in the program see a $400 median increase in monthly net income. The median increase in credit score is 35 points.
“ ‘Increasingly, there’s this recognition that monetary policy is sort of a blunt instrument,’ said David Erickson, director of the Center for Community Development at the San Francisco Fed, which has compiled extensive research on programs and places that have successfully reduced poverty. ‘In that case, you need a little bit more of a surgical tool, and that’s where community development comes in.’ ”
More at the Washington Post, here, and the NY Times, here.
Janet Yellen (left) and Leah Maurer at the Boston Fed on October 16, 2014.