Federal Reserve Bank Presidents Call for ‘Rethinking’ of Job Flexibility
The pandemic has exacerbated deep-rooted issues in the structure of jobs. The need to “rethink” the future-of-work to incorporate flexibility and employee needs came to the limelight during a fireside chat between the presidents of two Federal Reserve Banks on Monday.
Issues of access to public transportation, shift times, regular hours, effective childcare and paid sick days plagued the workforce prior to the novel coronavirus pandemic, said Eric Rosengren, president of the Federal Reserve Bank of Boston. These issues have only been made worse by the pandemic, he added, and those affected by them have seen their situation “become much worse.”
“[These problems] have all become much more apparent with the pandemic,” he added, noting that the closing of schools has increased the need for childcare. His remarks came during a virtual event entitled, “Uneven Outcomes in the Labor Market: Understanding Trends and Identifying Solutions.”
Both Rosenberg and Raphael Bostic, president of the Federal Bank Reserve of Atlanta, noted the need to “rethink” the structure of jobs going forward.
“All employment is not the same employment and there are some forms of employment that really allow for more adaptability, more flexibility,” Bostic said, like working from home. Others do not have that “choice,” he added, noting that recovery will not occur at the same pace in different sectors and communities.
The current “stresses” of the pandemic have “really caused all of our inequities to be exacerbated,” he said, noting an individual’s “station” will be a factor in whether they are on an upward track to recovery or on the “down part.”
“We need to rethink jobs as we are re-employing people,” Rosengren said, but noted the country is still currently in the “depth” of the economic recession with a current 6.7% unemployment rate and 3 million people laid off.
However, the pandemic has introduced more technological innovation. And this, Rosengren noted, can add further flexibility into the workforce if integrated. Another “critically important” issue that needs to be tackled is public transportation, he added, as this was the “lifeline for many workers” who cannot otherwise get to their jobs.
Bostic also called for a more “holistic” approach to the future-of-work and establishing a “much more nimble infrastructure that allows for that” by “marrying” the need of employers and the level their employees are at, with training programs for the workforce to “get re-skilled to fit the needs of tomorrow.”
More human capital investment is needed as “transitions in the economy are happening more rapidly and as the skills for the new jobs are not matching the skills that you need for the old jobs that are being disrupted,” he said.
“You need the childcare, you need the transportation, you need the affordable housing, and you need the skills development,” Bostic said.
In terms of what the Federal Reserve can do, Rosengren pointed to a few key areas in which the Federal Reserve should take part. First, the Fed must do “everything in [their] power in reaching full employment through a “big role in fiscal policy,” he said. It should also, particularly when interest rates go down to zero, take a page from the lessons learned from its Main Street Lending Program to improve the design of programs with small and mid-size businesses to increase hiring. The latter, he noted, was not something the Fed tends to do as it focuses on markets and its largest companies, as those are the ones with access to the bond market.
Another key area he noted was the coordination with employers through the Fed’s community development group to promote the needed flexibility and skills development of the workforce.
“Finally, we need to be thinking about how all of these fit together,” Rosenberg said, noting that in the public health sector the issue has gone beyond public protective equipment for essential workers to the broader conversation of the roles and responsibilities employers have.
Bostic agreed with Rosenberg, but added four points of his own that called the Fed to “convene” solutions-oriented public discourse with various perspectives, promote actionable ideas to solve the identified problems, provide advice where policy was lacking and further empirical research to “help shape conversations.”
“We need to be operating much more in the solution space,” Bostic said.
During a “lightning round” where both presidents were asked for one-word answers of what they thought about the new Biden administration, both chose the word “hopeful.”
