Inequality 'destructive' for US economy: Treasury secretary

Tens of millions of Americans are blocked from prosperous parts of economy, says Janet Yellen at House hearing

Övünç Kutlu   | 18.06.2021
Inequality 'destructive' for US economy: Treasury secretary


Wage and racial inequality are destructive for the American economy, US Treasury Secretary Janet Yellen said on Thursday during her testimony before the House of Representatives Ways and Means Committee.

Due to the "destructive forces" of divergence in wages and of geographic regions, as well as the decline in labor force participation, the rise of climate change, and the persistence of racial inequality, she said tens of millions of Americans are blocked "from the prosperous parts of our economy."

"There have always been richer areas of the country and poorer areas, but for most of the 20th century, the latter were catching up with the former. The country was rising together. Today, this is less true. There's a divergence among local economies, some areas that are growing more prosperous and others that are stagnating," she explained.

Yellen said US President Joe Biden's budget proposal aims to start unwinding those trends, adding that the plan was fiscally strategic.

The Senate and House are currently in the process of preparing separate draft budgets, as Democrats are trying to focus on infrastructure, Medicare and immigration in Biden's massive $6 trillion proposal.

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