Chicago Federal Reserve President Says Congress Needs to Fund More Economic Stimulus
Federal Reserve Bank of Chicago President Charles Evans speaks to the Illinois Chamber of Commerce virtually Thursday.
The President of the Federal Reserve Bank of Chicago says more relief money from Washington is needed to stop further pain to families and businesses.
Speaking remotely to the Illinois Chamber of Commerce Annual Meeting Thursday, Charles Evans says Black and Hispanic populations have been hit hardest by the COVID-19 pandemic.
“Many such communities have long suffered from disinvestment, economic exclusion, and systemic racism,” he said. “Residents and businesses in predominately minority neighborhoods have borne an unfair and outsized burden.”
“Since the first recorded case of COVID-19 in Chicago 8 months ago, cases and deaths in minority neighborhoods have been especially high. So have job losses and business closures.”
Evans says Congress may need to double down on funding for more unemployment insurance benefits, Payroll Protection Program loans, and the prevention of layoffs of some industries that received federal aid, like airlines.
He said further cuts to those programs would “test the true resiliency of the U.S. economy.”
“The potential hole in aggregate demand may be large, and, in my view, more fiscal relief is needed in order to limit further damage to households and businesses, especially those in vulnerable communities,” Evans said. “Until we make sufficient progress in controlling the spread of the virus, an inclusive economic recovery will be difficult.”
The Illinois Department of Employment Security reported a 12.6% unemployment rate in the Chicago area in August, up from 3.8% a year ago. It is a loss of around 300,000 jobs.
Evans says most of those job losses have hurt minority communities the most.
“There have been large numbers of job losses in among workers in the retail, leisure, and hospitality sectors since March. Public Health concerns about in-person contact and stay at home orders have hit these sectors particularly hard,” he said. “A serious concern is that workers in retail, leisure, and hospitality often are relatively low paid and have little savings, leaving them especially vulnerable to hardship when they lose their jobs. These sectors also employ more women and minorities who have both lost jobs and been hit hard in other ways, such as by having to shoulder a disproportionate share of the extra child care responsibilities or contracting the [COVID-19] virus at a higher rate.”
Both the White House and congressional leaders have been at loggerheads over what a new COVID-19 economic relief package would consist of and cost.
Evans says leaders should act quickly.
“The longer the dual challenges of the pandemic and recession continue, the greater is the risk of deepening the already stark inequities in our economy.”