Federal Reserve Chairman Jerome Powell suggested Wednesday night that the American ideal of earned success from hard work may be fading.
“We pride ourselves on being a country where you can go from the bottom to the top and there are plenty examples of that happening,” Powell said during a town hall event. “But if you actually look at the numbers and look at what are the chances that someone can go from the bottom quintile [of income] to the top quintile [of income], the U.S. lags now in mobility. And that is not our self-image as a country nor is it where we want to be.”
Powell, speaking at a Fed event for teachers, was asked by an audience member what he saw as major challenges to the U.S. economy over the next 10 years.
Powell painted a stark picture of worsening economic disparities in the U.S. and a decrease in economic growth being felt widely. For years, Powell said, incomes across different economic levels increased significantly across the board.
But, “In the last 40 years or so, the rate of increase in per capita income for the middle and at the bottom of the income spectrum has really decreased,” he said. “We have some work to do to make sure that prosperity that we do achieve is widely spread.”
“We want prosperity to be widely shared. We need policies to make that happen,” continued the Fed chairman, emphasizing improved education to prepare more Americans for the workforce and help them adapt to upcoming disruption to various industries because of rapid changes in technology.
“This isn’t really the Fed’s work, but there are policies that we need to do that everyone should be able to agree on that will enhance mobility, improve people’s chances in life, and enable people better to take part in the workforce of the future where technology’s going to be a bigger and bigger factor and that’s going to require advanced skills with technology,” said Powell.
