Tuesday, 20 Oct 2020

Fed's Kaplan says disadvantaged Americans need help getting back to work

FILE PHOTO: Dallas Federal Reserve Bank President Robert Kaplan speaks during an interview in his office at the bank’s headquarters in Dallas, Texas, U.S. January 9, 2020. REUTERS/ Ann Saphir

(Reuters) – Women and minorities, who have been affected by pandemic-related job losses, will need help getting back to work as more economic activity shifts to sectors less dependant on face-to-face interaction, Dallas Federal Reserve President Robert Kaplan said on Wednesday.

People hit hardest by the crisis will need training, greater access to child care and other resources to return to the labor force, Kaplan said during a virtual discussion organized by the Dallas Fed. “We’re going to have a lot of work to do to get these underrepresented groups that have been disproportionately affected back into the labor force,” Kaplan said.

Women with a high school degree or less education are faring worse economically than their male counterparts because of challenges accessing child care, Kaplan said. Other households need help accessing high-speed internet, he said.

After a strong bounce back over the summer, the U.S. labor market is now recovering more slowly, and more Americans are bracing for long-term unemployment.

Businesses and policymakers may need to invest in education and training to help displaced workers pivot to jobs seeing greater demand, Kaplan said.

“Many of the folks who have lost their jobs may not have a business to go back to,” he said, contrasting that experience to that of some people with college educations, who are more likely to have jobs that allow them to work remotely.

The economy is likely to contract by about 2.5% in 2020 and could grow next year by approximately 3.5%, according to Kaplan’s latest forecast. He expects the unemployment rate to end the year between 7% and 7.5%, down from the current rate of 7.9%. The unemployment rate may not drop below 4% again until 2023, he said.

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