One of the mandates of the Federal Reserve is to achieve and maintain full employment. A simple definition of full employment is a rate around 3 percent to 4 percent, accompanied by rising wages. In our current economy, it’s important that the Fed keeps interest rates low until we achieve that level of job and wage growth. The economic recovery remains slow and inadequate for many like me who struggle to make ends meet working low-wage jobs.
The Fed recently made a wise decision not to raise rates, but our regional president Jeffrey Lacker was the lone dissenter. Another rate hike decision comes Wednesday.
I’ve been working in the fast food industry for many years. I still make low wages, however, and it’s difficult to support myself and family. I’ve worked hard to support my family, and was extremely proud when my children grew up and could support themselves. When the recession hit, it forced us to move back in together. We all work low-wage jobs and have to pool our monies to pay rent, and have transportation, food, and enough money for health care and medicine. This is a problem for many families like ours across the country – hard-working people barely making ends meet.
We need for people in positions of power like Jeffrey Lacker to think about working families like mine. We are an important part of the economy, and the Fed is supposed to represent our interests, as well.
Even modest gains in employment rates and wages have a significant impact in communities of color, and with inflation still very low and the economic recovery still incomplete, now is not the time to slow job and wage growth with an unnecessary interest rate hike. Stronger growth means more and higher-paying jobs, and more full-time work for those now only able to work part-time.
Lacker and his fellow Fed Presidents should hold off on a rate hike until we reach full employment, including rising wages. Until then the economy has not fully recovered, and any rise in rates could spell disaster for people like me and my family.
Rolanda McMillan of Richmond, Va., is an activist with Raise Up for $15, an effort to raise the minimum wage.