KEY INSIGHTS
- Black-led organizations have made a formal request for President Biden to appoint Black leadership to the Federal Reserve Board of Governors.
- Raphael Bostic is the first and only Black person to serve as president of any of the 12 regional banks in the U.S.
- The Federal Reserve could implement more extensive surveying to create more leadership equity.
The Joint Center, Black Economic Alliance and other organizations sent a letter earlier this month to President Biden to add more Black candidates to the Federal Reserve Board. Four seats on the seven-member board, including the chair, will be vacant in the coming months. The letter urges Biden to stop the historical trend of leaving Black Americans out of executive Federal Reserve positions.
“One of the things that we are trying to highlight with our work is the inextricable link between the success of the Black economy and the success of the U.S. economy,” David Clunie, Executive Director of the Black Economic Alliance (BEA), told The Plug.
In 2011, the Federal Reserve System created offices to promote diversity and inclusion at the Board and the 12 Federal Reserve Banks. However, current statistics show most diversity pledges but little information on individuals’ demographics among leadership positions.
Most of the Federal Reserve’s diversity is in the southern offices of Georgia and Texas. Black Americans make up 24 percent of executive and senior management positions in the Atlanta office. According to the 2020 Office of Minority and Women Inclusion (OMWI) Congressional report, 40 percent of federal employees in executive positions in Dallas are minorities. The report did not specify race but clumped African Americans, Hispanic and other groups together.
There is a smaller percentage of Black employees in the U.S. west and midwest. In San Francisco, six percent of federal employees are Black. The Minneapolis Fed has nine percent Black workers holding equal employment opportunity (EEO-1) executive positions. Some OMWI reports show a meassge: page not found, adding more confusion to the current state of the Fed’s inclusion results. The Federal Reserve Bank of Kansas City has similar issues displaying current employment demographics.
The Federal Reserve has selected three Black professionals to serve in less than 100 appointments since its founding in 1913. Raphael Bostic is the first and only Black person to serve as president of any of the12 regional banks in the United States. Under one percent of the Ph.D. economists on staff at the Federal Reserve in Washington, D.C. are Black, according to a New York Times report.
Black Organizations believe it is the right time to demand equality as President Biden has a historical number of opportunities to place diverse leaders in the seven open seats. The President has promised and delivered one of the most diverse administrations since the Clinton administration, according to a Government Executive report. In his first 100 days in office, 18 percent of Biden’s appointees are Black. Forty-four percent of the 25 Cabinet and Cabinet-level senior positions, including the vice presidency, are held by women. A total of 64 women have served in presidential administrations.
Diversity in economics and data disaggregation are some solutions to increase Black economic leadership.
Marie Mora, founder of the American Society of Hispanic Economists (ASHE), believes that economic diversity must start in academia. The American Economic Association’s mentoring program is another resource, which is funded by the National Science Foundation, for traditionally underrepresented minorities. Early career economists and minority graduate students are more at risk to quit the economic profession due to discrimination.
At a Washington Center for Equitable growth event, Mora explained how disaggregating data can reveal certain racial and ethnic inequalities that permeate our economy and society. The Fed board can study the experiences of Black workers to devise better employee recruitment and retention. Understanding how the economy works for all Americans can create better workforce leadership that is often left out from traditional macroeconomic metrics like the Gross Domestic Product or measuring U.S. economic activity.
The Fed can also try oversampling, a survey tool that selects specific groups at a higher rate than the overall population to address the systematic underrepresentation of these groups in surveys. Larger samples can help the Fed board and hiring partners see diversity outreach and leadership development data.
Sponsored Series: This reporting is made possible by the The Ewing Marion Kauffman Foundation
The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation based in Kansas City, Mo., that seeks to build inclusive prosperity through a prepared workforce and entrepreneur-focused economic development. The Foundation uses its $3 billion in assets to change conditions, address root causes, and break down systemic barriers so that all people – regardless of race, gender, or geography – have the opportunity to achieve economic stability, mobility, and prosperity. For more information, visit www.kauffman.org and connect with us at www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.
