##pensably important to effective navigation of the twists and turns of life in the american economy. imagine what it would be like, even with a job, if you had no access to banking or credit ; if you did not understand how mortgages or credit cards work ; or if you had no way to save a portion of your earnings. sadly, there are millions of americans lingering in these margins. in my remarks today, i will share my perspective on why broad inclusion matters to our economic recovery, the challenges that current economic conditions present to the efforts of lower - income americans to participate in the economy, and the risks we face as a country if we understate or misunderstand these challenges. who is being excluded? let ’ s first try to scope who is at risk of being economically excluded. we start with the unemployed. the latest employment report issued by the bureau of labor statistics was bis central bankers ’ speeches bleak. 1 u. s. employers in may added only 54, 000 non - farm jobs, down from 232, 000 jobs added in april. the headline unemployment rate was 9. 1 percent in may, representing about 13. 9 million americans out of work. unfortunately, the headline unemployment numbers don ’ t fully capture the true scope of the unemployment problem. there are an additional 8. 5 million workers who are “ part - time - of - necessity ” or “ underemployed ” because their hours have been cut back or they are unable to find a full - time job ; there are also 1. 4 million workers who are “ marginally attached ” to the labor force because, while wanting a job, they have not searched for one in the past four weeks ; and there are 822, 000 “ discouraged ” workers who have given up searching for employment because they do not believe any jobs are available for them. 2 so it is not just those who are currently collecting unemployment insurance payments who are excluded. the underemployed, the marginally attached, and the discouraged, all of whom are primarily concerned about the security of their jobs, wage growth, housing, and the rising cost of living, are also suffering from exclusion from the economy of work. but most of these people searching for a way back into the employed economy are doubly challenged by their ability to access reasonably priced financial products with safe features that encourage savings. americans have several core financial needs. they need a safe, accessible, and affordable method to deposit or cash checks,

like the r & d tax credit ). in addition, the governments of the united states and many other countries run their own research facilities, including facilities focused on nonmilitary applications such as health. the primary economic rationale for a government role in r & d is that, absent such intervention, the private market would not adequately supply certain types of research. 3 the argument, which applies particularly strongly to basic or fundamental research, is that the full economic value of a scientific advance is unlikely to accrue to its discoverer, especially if the new knowledge can be replicated or disseminated at low cost. for example, james watson and francis crick received a minute fraction of the economic benefits that have flowed from their discovery of the structure of dna. if many people are able to exploit, or otherwise benefit from, research done by others, then the total or social return to research may be higher on average than the private return to those who bear the costs and risks of innovation. as a result, market forces will lead to underinvestment in r & d from society ’ s perspective, providing a rationale for government intervention. one possible policy response to the market underprovision problem would be to substantially strengthen the intellectual property rights regime, for example, by granting the developers of new ideas strong and long - lasting claims to the economic benefits of their discoveries – perhaps by extending and expanding patent rights. this approach has significant drawbacks of its own, however, in that strict limitations on the free use of new ideas would inhibit both further research and the development of valuable commercial applications. thus, although patent protections and similar rules remain an important part of innovation policy, governments have also turned to direct support of r & d activities. of course, the rationale for government support of r & d would be weakened if governments had consistently performed poorly in this sphere. certainly, there have been disappointments ; for example, the surge in federal investment in energy technology research in the 1970s, a response to the energy crisis of that decade, achieved less than its initiators for an early version of this argument see arrow ( 1962 ). bis central bankers ’ speeches hoped. in the united states, however, we have seen many examples – in some cases extending back to the late 19th and early 20th centuries – of federal research initiatives and government support enabling the emergence of new technologies in areas that include agriculture, chemicals, health care, and information technology. a case that has been particularly well documented