POLITICS: PennAve

Trying to put 'human face' on jobs problem, Janet Yellen highlights workers with criminal records

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Jobs,PennAve,Joseph Lawler,Economy,Federal Reserve,Janet Yellen

New Federal Reserve Chairwoman Janet Yellen appears to have stumbled into a controversial area in her efforts to humanize the ongoing weakness of the U.S. labor market.

In a speech monday at a conference on community reinvestment in Chicago, Yellen relayed anecdotes about three workers struggling with long-term unemployment. While highlighting individuals is routine for politicians trying to project empathy on the campaign trail, it's unusual for central bankers to do so. More often, they speak of current events in academic terms.

Monday's speech shows one reason why central bankers normally shy away from specifics: Bloomberg reported that two of the three workers Yellen mentioned have criminal records -- one for felony theft, another for heroin possession.

Yellen knew about the workers’ criminal records, the Fed told Bloomberg, but declined to mention them in detailing the obstacles they had faced in gaining employment.

Yellen has developed a reputation for trying to bring the workings of the economy to the personal level. Claudia Goldin, a Harvard labor economist and friend and contemporary of Yellen’s, told the Washington Examiner that Yellen was able to “put a human face” on the cost of downturns when she was going through the nomination process.

That theme was part of Yellen’s self-presentation during her nomination hearings and as she took office. During her ceremonial swearing-in, the long-time Fed official promised to “never forget the individual lives, experiences and challenges that lie behind the statistics we use to gauge the health of the economy.”

Yet in her speech she shied away from including the unique problems faced by those with criminal records in the labor market, even though such obstacles were relevant in the cases of two of her three real-life examples.

About 65 million Americans have some kind of criminal record, the National Employment Law Project estimated in 2011.

They make up a substantial portion of the labor force, but reintegration into the workplace can be more difficult for ex-convicts than for others. For example, many large U.S. companies perform routine background checks on job applicants to look for convictions.

In terms of federal law, there is no distinction between workers with and without criminal records (although the Equal Employment Opportunity Commission sometimes prosecutes cases when company’s hiring policies have a disparate impact on different racial groups). That’s also true for the purposes of the Federal Reserve’s mandate to promote maximum employment — unemployed people who have run afoul of the law need work just as others do.

Monday’s event was the first public one for Yellen as Fed chief, setting aside her appearances before Congress. In trying to step outside the Fed’s normal comfort zone by using real-world examples to illustrate her point, she also raised a sensitive topic it appears she meant to skirt.

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