A welcome push from Minneapolis Fed to address economic disparities

If unemployment is down and the economy is looking up, why are some groups of Americans still struggling to get by? And what prevents the "rising-tide-lifts-all-boats" adage from working for everyone?

That's the key question a Minneapolis Federal Reserve Bank effort is wisely seeking to answer — even though tackling economic disparities hasn't historically been part of the agency's mission. The bank is better known for setting banking regulations and interest rates to control inflation and encourage maximum employment.

Yet late last year, the local Fed bank launched its Opportunity and Inclusive Growth Institute, an initiative to study and better understand persistent economic differences between races, genders and regions. Last week the Fed sponsored its first of a series of conferences on the subject. It's also hosting visiting scholars to contribute to its research.

The smart idea is to conduct top-notch research so the Fed can support inclusive growth — either through its own monetary decisions or by contributing to other areas of public policy. National bank researchers certainly aren't the first or only groups to conduct income inequality studies, so an early goal is to identify whether there are economic research gaps that the agency can fill.

During a recent conversation with the Editorial Board, Minneapolis Fed President Neel Kashkari said he was moved to start the Institute because he had seen the glaring disparities as a politician in California, as an official in the U.S. Treasury Department and in his current position in Minneapolis. He said one data point that stands out is that blacks tend to be unemployed at twice the rate of whites no matter what their educational level or how the economy is doing.

Blacks and some other communities of color are often most affected by income inequality, Kashkari said. But the initiative will study all Americans who are struggling — including poor whites.

As Kashkari noted when announcing the Institute effort, "A lack of economic opportunity does not know racial or ethnic or even geographic boundaries. There are people in all communities who are struggling to get a fair chance at a good education and a good job."

Research-based recommendations from the influential bank could bring more attention, urgency and funding to address income inequality.

In her recent State of the City address, Minneapolis Mayor Betsy Hodges reaffirmed her commitment to promoting equity throughout city decisionmaking. Hodges, who is seeking re-election this year to a second term, is not the only mayoral candidate discussing this significant social, cultural and economic issue.

Minneapolis voters — as well as those who will elect a new mayor in St. Paul — should expect to hear more from all the candidates about how they would address disparities that continue to threaten the economic future of the Twin Cities.