Dallas Fed president says economy hurt by systemic racism

Federal Reserve Bank of Dallas President Robert Kaplan said Sunday that systemic racism is a major restraint on the U.S. economy meeting its full potential, particularly as the coronavirus pandemic and its economic fallout continues to disproportionately affect African Americans.

“For years, blacks and Hispanics have had an elevated level of unemployment versus whites. That started to improve dramatically in the last few years. We now take a step back as a result of this crisis,” Kaplan said on CBS’s “Face the Nation.” “But a more inclusive economy where everyone has opportunity will mean faster workforce growth, faster productivity growth, and we’ll grow faster.”

ICYMI: @DallasFed President & CEO @RobSKaplan agrees with @RaphaelBostic who said “systemic racism is a yoke that drags on the American economy” and says “we strongly believe a more inclusive economy will lead to better growth” pic.twitter.com/PFcw0fcElP

— Face The Nation (@FaceTheNation) June 15, 2020

Kaplan added that black and Hispanic Americans are “the fastest-growing demographic groups in this country” and that economic growth as a whole would be considerably slower without their equal participation.

Kaplan’s comments came two days after similar remarks by Raphael Bostic, his Atlanta counterpart. In an essay published Friday, Bostic wrote that “systemic racism is a yoke that drags on the American economy.”

“By limiting economic and educational opportunities for a large number of Americans, institutionalized racism constrains this country’s economic potential,” Bostic, who is black, wrote. “The economic contributions of these Americans, in the form of work product and innovation, will be less than they otherwise could have been.”

Although black unemployment levels reached historic lows before the beginning of the coronavirus pandemic, early data suggest that African Americans are benefiting less from preliminary signs of economic recovery.

While official unemployment figures for May indicated the national unemployment rate dropped from 14.7 percent in April to 13.3 percent, black unemployment increased to 16.8 percent, the highest level in more than a decade.