New data shows few black economists at the Fed

Black researchers made up about 1.5% of the Federal Reserve system’s 945 doctoral-level economists at the end of 2021, a number that highlights the central bank’s ongoing struggle to improve racial and ethnic diversity in its ranks. .

Data the Fed first released Thursday showed that 72% of economists with PhDs in the system are white, 17% are Asian and 9.4% identify as Hispanic or Latino. A small sharing relationship identifying with two or more races.

The new diversity figures follow New York Times reports last year, in which data provided by the Fed showed that only 1.3% of economists in its system identified as black lonely by the end of 2020. Data for 2021 is roughly, but not exactly comparable, as the central bank has made methodological improvements in collecting the figures this year.

Economics is a heavily white and Asian profession — just under 5% of U.S. citizens or residents who earned a doctorate in the field in the 2020 academic year were black — but the Fed tends to be even fewer racially diverse than the profession as a whole. The statement pointed out that the U.S. central bank is making slow progress on hiring and retaining a more racially diverse staff of experts.

Across the entire 12-bank system of the Fed and the Board of Governors in Washington, 14 economists with doctorates identify as black alone. The council employs 429 economists, but no black women and only one black man.

There does, however, appear to be progress towards greater diversity at the entry level. As for the Fed’s 393 research assistants, who typically have bachelor’s degrees and often aim to pursue doctoral studies in economics, the new data showed that 19 people, or about 5% of assistants, were black. .

This is a slight improvement from 3.7% the previous year, and roughly mirrors the share of economics graduates who identify as black.

The Fed’s junior staff was also more gender-diverse: 42% of research assistants were women, compared to about 25% of its economists with PhDs.

Lawmakers and think tanks have for years pushed the Fed to increase diversity in its ranks, arguing that having a set of economists and researchers at the central bank who more closely mirror the public — the people that the Fed ultimately serves – would lead to a wider range of views around the political table and more comprehensive economic discussions.

The Fed sets monetary policy for the country, raising or lowering the cost of borrowing money in order to slow down or speed up the economy. Its actions help determine the strength of the labor market at any given time, help control inflation, and can influence financial stability.

“The risk with underrepresentation, from a substantive perspective, is that you’re underrepresenting perspectives that are important to policy-making,” said Skanda Amarnath, executive director of Jobs America, which pushes the Fed to focus more intensely on the labor market.

It could mean that a range of ideas and experiences “are not fully understood or captured to the same degree”, he said.

The Fed is set to see more racial diversity at its highest ranks: Lisa D. Cook and Philip N. Jefferson, who are both black, were confirmed as Fed governors this week. Susan M. Collins will become the first black woman to lead a regional federal bank when she becomes Boston Fed chair this summer, and Raphael Bostic, the first black man to lead a regional bank, is currently the Boston Fed chair. Atlanta. .

The Fed’s leadership team has also become more diverse in recent years. Assuming Mr. Biden’s nominees are all confirmed, three of the seven central bank governors will be women. Once new presidents take office in Boston and Dallas this summer, five of the 12 regional bank executives will be women.

Fed officials have in recent years spoken publicly of aiming for a wider range of views within their own workplaces.

“The Atlanta Fed is committed to modeling economic inclusion, and it starts with our own organization,” Atlanta’s Bostic said in a 2020 opinion piece, published after the death of George Floyd. , a black man, in the hands of police in Minneapolis. . “We view diversity and inclusion as essential to who we are.”

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