“Lots of good things happen” in addition to real wage increases when a good labor market lasts for a sustained period of time, Powell said Monday. There are expanded efforts to get more people into the workforce, for example, like programs that prepare prisoners for work a year before they are released.
“Actually it turns out that as an expansion gets longer and longer, more and more of the wage needs actually go to people at the lower end of the wage spectrum,” Powell told workers, small business owners and community leaders. “These are really beneficial things. To have that, though, the record is also clear that we need price stability,” Powell said. “Price stability is just a critical piece of bedrock for the overall economy over the years.”
Powell joined the roundtable with Philadelphia Fed President Patrick Harker. Neither official commented on near-term outlook for rates or the economy.