BUSINESS
03/22/2013 08:51 am ET Updated May 22, 2013

U.S. 'Cannot Achieve Prosperity' Without Addressing Low-Wage Job Problem: Federal Reserve Official

WASHINGTON, March 22 (Reuters) - Too much of the recent growth in U.S. employment has been concentrated in low-wage and temporary jobs, leaving the recovery on shaky ground, a top Federal Reserve official said on Friday.

Sarah Raskin, a member of the Fed's board of governors, said monetary policymakers are doing all they can to promote stronger economic growth and beef up hiring, and cited improving labor market conditions. But she added interest rates are a blunt tool that cannot help direct the types of jobs that are created, noting one quarter of U.S. workers are now considered low-wage.

Pointing to a sharp post-recession rise in poverty, a subject not often the focus of speeches by Fed officials, Raskin also argued the rise of temporary employment, which she said is approaching a record, was further widening an already large gap between rich and poor Americans.

"Our country cannot achieve prosperity without addressing the powerful undertow created by flat wages and tenuous financial security for so many millions of Americans," Raskin said in prepared remarks to the National Community Reinvestment Coalition's annual conference.

"Government policymakers need to focus seriously on (these) problems, not simply because of notions of fairness and justice, because the economy's ability to produce a stable quality of living for millions of people is at stake," she said.

The economy generated 236,000 jobs in February, bringing the jobless rate down to 7.7 percent from 7.9 percent. Still, total employment is still many hundreds of thousands of jobs short of its pre-recession levels, even before accounting for population growth. (Reporting By Pedro Nicolaci da Costa; Editing by Chizu Nomiyama)

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