Powell Connects with Community, Business Leaders at Fed Listens Session
In October, the Kansas City Fed hosted Federal Reserve Chairman Jerome Powell as part of the System’s Fed Listens program, a year-long public review of the central bank’s strategy, tools and communication practices. The session in Kansas City was part of a series of nationwide Fed Listens events.
The Kansas City event allowed community and business leaders to engage in a roundtable discussion with Powell and Kansas City Fed President Esther George. The leaders shared perspectives on several issues, including the ability to find qualified workers, the price of goods and services, and economic challenges in low- and moderate-income communities.
“Understanding how you experience the economy is an important aspect of our ability to fulfill our congressionally mandated objectives for stable prices and maximum sustainable employment,” George said in her opening remarks.
Powell noted the Fed Listens meetings “have been open to the press and live-streamed on the internet. Both the breadth and the transparency of the review are unprecedented for the Fed.”
Community and business leaders in attendance shared a wide range of economic concerns. These included challenges related to affordability of health care and child care; hiring and retaining talented job candidates; financial hardship for farmers; wage competition; pension funding; and educational system limits that make it harder for lower-income students to attain certification or degrees for their chosen fields.
Clyde McQueen, chief executive officer of the Full Employment Council in Kansas City, described constraints on workers from low- and moderate-income (LMI) backgrounds. He cited a George Washington University survey finding that 51 percent of Kansas City area jobs paying $55,000 a year require a college degree, with the remaining 49 percent requiring some sort of certification. Degrees and certification requirements prevent a sizable hurdle, in addition to limitations related to transportation and child care, he said.
His organization is working to support various approaches that offer post-high school opportunities to students from LMI communities, including two years of access to training after the 12th grade.
“(If we) create a system where people can access credentialing without worrying about ‘How do I finance it?’ that will increase the ability for people to show up with the right skills at the right time,” McQueen said.
Challenges related to attracting, hiring and retaining qualified job candidates were expressed across industries. The issue seemed to hit the construction industry particularly hard following the economic downturn in 2008, and the industry continues struggling with increased costs of building materials, health care and pension contributions, according to Alise Martiny of the Greater Kansas City Building and Construction Trades Council. Martiny highlighted an unemployment rate in the construction industry that hovered around 20 percent to 25 percent during the Great Recession.
“Some of that workforce came back, but you’ve got to have a livable wage,” she said.
Lee Blank, chief executive officer of GFG AG Services, shared that his industry is experiencing some slowing.
“We’re maybe a darker story than the rest of the U.S. economy,” said Blank, whose company provides a variety of services to farmers throughout the crop cycle. The U.S. economy is doing well, but the U.S. farm economy really is struggling. It’s an economy that’s under some stress.”
He said the U.S. farmer’s topline revenue has changed since 2012-13, related to three primary factors: a glut of commodities globally, the trade environment and the strength of the U.S. dollar, which can create issues when it comes to exports.
“Unfortunately the revenues have dropped almost 50 percent to the farm gate based on the commodities they deal with from 2012-13 to today,” while costs and operating expenses have held steady or grown, Blank said. “It’s really a concern for all of agriculture … the whole industry has been built to export farm commodities across the globe, and unfortunately today that’s not happening.”
Powell and George questioned the participants throughout the session and led the conversation through topics that helped them understand a more complete landscape of challenges and areas of opportunity for the region’s economy. Before the Fed Listens session, Powell and George attended a breakfast meeting of community leaders with U.S. Rep. Emanuel Cleaver of Kansas City and U.S. Rep. Sharice Davids of Kansas. The group discussed the labor market, banking and other economic issues. The Fed chairman also met with U.S. Sen. Jerry Moran and other leaders from Kansas as part of his visit to the area.