Federal Reserve Bank of Richmond President Jeffrey Lacker said income inequality has increased in recent years because of the rising importance of a college degree and advanced skills for U.S. employers.
“The rich are increasingly likely to remain rich, and the poor are increasingly likely to remain poor,” Lacker said today in Charlotte, North Carolina. “The disparity in outcomes between those who have acquired skills, often in the form of college education, and those who have not likely plays a large role.”
Lacker, who didn’t comment on the economic outlook or monetary policy in his prepared remarks, said the labor market remains “weak,” with unemployment at 7.2 percent. Employers have difficulty filling jobs that demand highly-skilled workers, Lacker told a group of college students and faculty at Johnson C. Smith University in Charlotte today.
About 8 percent of U.S. high school students drop out, which Lacker said amounts to an “economic death sentence” and may be “unacceptably high.” The unemployment rate among workers with college degrees is just 3.7 percent, he said.
The U.S. jobless rate probably rose to 7.3 percent last month, with 120,000 jobs added, according to a Bloomberg News survey before the Nov. 8 report.
Lacker, 58, has been president of the Richmond Fed since 2004. He was previously the regional bank’s director of research. His district includes Maryland, Virginia, North Carolina, South Carolina and most of West Virginia.