Jan 21, 2020

Coretta Scott King and the Fed's full employment mandate

Coretta Scott King addresses the 1988 Democratic National Convention in Atlanta

Activist Coretta Scott King addresses the 1988 Democratic National Convention in Atlanta. Photo: Wally McNamee/Corbis via Getty Images

Coretta Scott King played an integral role in establishing the Fed's dual mandate of stable prices and maximum employment.

Why it matters: Most central banks have only a singular objective — maintaining price stability, or keeping inflation in check. The Fed, however, has two and that is thanks in no small part to King.

Details: "King played a pivotal, but not widely recognized, role in advocating for full employment," a policy paper from the Center for Economic and Policy Research notes.

  • "As a founder of the National Committee for Full Employment/Full Employment Action Council, King joined Congressional leaders Augustus Hawkins and Hubert Humphrey in calling for and eventually passing the landmark 1978 Full Employment and Balanced Growth Act (Humphrey-Hawkins Act)."

What it means: The Humphrey-Hawkins Act "clarified the role that monetary policy can play in improving the employment picture and required the Fed to weigh the impact that its interest rate policy would have on the job market."

  • It legally required the Fed to pursue maximum employment.

The bottom line: Former AP reporter Errin Haines points out that Martin Luther King Jr. Day "is Mrs. King’s as much as it is Dr. King’s, because she demanded that the country that disrespected her husband in life would respect him in death, year after year, until it became a reality."

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