- being of most americans, particularly those who have been struggling and are most 2 / 7 bis central bankers'speeches vulnerable to economic downturns. and, as discussed in the federal reserve ’ s july monetary policy report and in chair yellen ’ s accompanying testimony before congress, it is encouraging that unemployment rates continue to fall for most demographic groups, including african - americans and hispanics. 2 at the same time, we should remain concerned that the jobless rates for those groups remain above the unemployment rate for the nation. recent u. s. census bureau estimates of household income growth also provide some reason for optimism. median real household income rose 3. 2 percent in 2016, after strong gains the prior year. gains were particularly notable among african - american and hispanic households, and the poverty rate fell to near pre - crisis levels. while this is good news, i think we can all agree that we have a long way to go to improve income inequality and mobility in the united states. as i see it, these are among the most important issues we face as a nation. income mobility and education now, it is clearly the case that, given differences in individuals ’ abilities, a free - market society will generate some level of inequality. however, there are persistent trends toward growing inequality and diminished economic mobility — and in my view, these are problematic. 3 first, income inequality has widened notably since about 1980. 4 second, and more distressing, is a relatively low rate of economic mobility, or the degree to which individuals or families can move up or down in the income distribution over time. for example, the fraction of children who earn more than their parents has fallen from 90 percent to 50 percent over the past half century, and only 37 percent of parents believe that their children will be better off financially than they are, according to a recent pew research center survey. 5 high inequality combined with a low rate of mobility is particularly problematic in a democratic society. in short, it means that being born into a low - income family is likely to severely limit an individual ’ s opportunities and well - being over his or her lifetime. the united states fares notably weaker on both dimensions relative to its oecd peers. 6 that is concerning, and something we should be working to address. one significant initiative we have taken within the federal reserve system is the establishment of the opportunity and inclusive growth institute at the minneapolis fed, which conducts research and makes recommendations on the structural barriers to economic advancement in the nation

william c dudley : the monetary policy outlook and the importance of higher education for economic mobility remarks by mr william c dudley, president and chief executive officer of the federal reserve bank of new york, at the council for economic education ’ s 56th annual financial literacy & amp ; economic education conference, new york city, 6 october 2017. * * * good afternoon. it is a pleasure to have the opportunity to speak at this council for economic education ( cee ) event, marking the cee ’ s 56th annual financial literacy and economic education conference. given the hard lessons of the financial crisis — and the economic challenges still facing many americans — there are few goals more worthy than promoting greater financial and economic literacy. as always, what i have to say reflects my own views and not necessarily those of the federal open market committee ( fomc ) or the federal reserve system. 1 personal educational experience before discussing the economic outlook and the role of education in income mobility, i will offer a few remarks on my own educational experience. while it may not be surprising that i have a ph. d. in economics, the path that led me to the university of california, berkeley, is a bit unusual. i started college in the 1970s at columbia university. on the positive side, the professors were engaging, and i had the opportunity to read the great books of the university ’ s core contemporary civilization curriculum. but, i was troubled by the emphasis on grades and test taking. i wanted something that was more free - form. the idea was to find an environment that fostered learning for learning ’ s sake. so, in a small act of rebellion — after all, it was the early 1970s and i was a teenager — i decided to transfer to new college in sarasota, florida. new college provided a strong liberal arts, cross - disciplinary, and flexible education program that relied — as it does today — on an unstructured format of evaluations, study programs with individual professors, and contracts rather than grades. i like to call it “ graduate school for undergraduates, ” because it really is a place that encourages students to engage intellectually, read and think critically, and communicate effectively. this experience made me a strong advocate of a liberal arts education, which i believe is now more valuable than ever, given the greater importance of synthesizing and evaluating the vast array of information we have at our fingertips. the cross - disciplinary approach of a liberal arts program is also vital to understanding and solving complex