Seventy-five percent of employer firms tried to hire workers in 2021; close to half called the experience "very difficult." In response, firms most often increased wages or shifted more work to existing employees.

Why would you leave money in a checking or savings account while also carrying a credit card balance? Economists call this question the credit card debt puzzle. That’s because simultaneously holding both liquid assets and credit card debt seemingly makes no sense if the interest rates paid on deposit accounts are substantially lower than the interest rates charged on unpaid credit card balances — which they always are. In late 2021, the average rate paid was 0.06%, and the average rate charged was 16.13%.

And yet in 2019, according to a new Federal Reserve Bank of Boston working paper, 42% of the people surveyed carried — or “revolved” — credit card debt while maintaining some liquid assets, typically as a balance in their bank accounts. The paper was written by Boston Fed senior economist and policy advisor Joanna Stavins and Federal Reserve Bank of Atlanta payments risk expert Claire Greene.

The authors look at why consumers make...

The same story kept coming up in the hours Sarah Savage and Wendy Robeson spent interviewing Massachusetts mothers about how a lack of affordable, quality child care affected their families’ daily lives.

“They poured their hearts out to us,” said Robeson, a senior research scientist with the Work, Families, and Children Research Group at the Wellesley Centers for Women. “We tried our best to find a diverse set of parents, and they all had the same problems: They can’t find it. They can’t afford it.”

Robeson and Savage – a senior policy analyst and advisor at the Federal Reserve Bank of Boston – investigate the compromises and sacrifices parents make to juggle employment with child care in a new brief called, “Child care tradeoffs among Massachusetts mothers.” They also highlight the connection between child care and the workforce.

The researchers said women with very young children had low workforce...

Persistent and sizeable racial disparities in economic outcomes for workers and households are a longstanding feature of the U.S. economy. Differences in unemployment rate outcomes by race might be directly relevant to the central mission of the Federal Reserve. But substantial disparities in other areas either upstream or downstream from the labor market are also of great concern to the Fed. These include racial disparities in elementary and secondary education performance, rates of college completion and homeownership, wealth accumulation, and experience with the criminal justice system. Much of the public conversation around these topics has become highly politicized and is sometimes not grounded in the findings of careful research. This conference will introduce scholarly studies from recognized experts in their respective areas of research. These studies will summarize the current state of economic knowledge about the racial disparities, introduce new...

About 15 years ago, Dr. Tony Iton and his colleagues conducted a study with a half million death certificates at its core – and some stunning numbers in its conclusions.

The study revealed major disparities in life expectancy between different sections of Alameda County, California. In Oakland, for instance, Black residents of the flatlands area had an average life expectancy nearly 12 years shorter than whites in the hills (70.5 years, compared to 82.3).

Iton, a lecturer of health policy at the University of California, Berkeley, discussed the study Thursday during the Federal Reserve’s latest Racism and the Economy virtual event, which focused on health. His point, echoed throughout the conference, was that racial health disparities are about much more than flaws in the health care system. For instance, his study showed that those areas with lower life-expectancy lacked decent housing, healthy food, and...

Findings from a new Federal Reserve Bank of Boston report indicate that businesses borrowing from the Federal Reserve’s Main Street Lending Program had higher credit risks compared with similar-sized businesses in the same state and industry. However, MSLP borrowers may have shown greater potential to overcome the economic impact of the COVID-19 pandemic.

“Our findings suggest that these firms borrowed from the MSLP because their greater growth or survival potential, and hence relationship value, made lenders willing to lend to them, and their higher credit risk made the MSLP attractive, as it enabled the borrowers to pay a lower price or obtain more credit than they would have otherwise,” the report’s authors write.

The report is titled “How Did the MSLP Borrowers Fare Before and During COVID-19?” It was written by Boston Fed senior economist and policy advisor J. Christina Wang, data analyst...

In this conversation with Lash Nolen, we talk about the impact of Covid-19 on essential workers and discuss how community-informed and led efforts to improve health inequities can lead to real and lasting impacts on the ground.

A new paper published by the Federal Reserve Bank of Boston finds that when the measure of wealth includes two major retirement resources – defined benefit pension assets and Social Security wealth – the wealth gaps between white families and Black and other minority families narrow substantially. The paper also finds that when the analysis includes these resources, the white-Black racial wealth gap shows little if any growth over the last three decades. However, white families, on average, still have approximately three times as much wealth as Black families.

The paper, “A New Look at Racial Disparities Using a More Comprehensive Wealth Measure,” is coauthored by Federal Reserve Bank of Boston economist Jeffrey Thompson and Federal Reserve Board of Governors principal economist Alice Henriques Volz.

Studies of racial wealth disparities typically measure the gaps using only market wealth, which is...

Unprecedented funding is being infused into the child care sector through American Rescue Plan Act (ARPA) funds. A total of $39 billion is being dispersed across the states with the intention of helping to cover costs incurred through the pandemic that exacerbated an already financially vulnerable sector. Constraints within the child care sector made access to high-quality child care inequitable before the pandemic, so the added constraints from the pandemic put additional pressure on the sector, with concerning equity implications. ARPA discretionary funds require states to establish grant programs aimed at the sector’s recovery and stabilization. This Field Note recognizes major cost drivers in the child care sector, specifically those related to the delivery of infant/toddler care, and provides ideas for grant programs meant to be informative for both the near-term usage of ARPA funds as well as the long-term needs of the sector if we are to attain an equitable...

Many companies thrived during the COVID-19 pandemic, with employees adjusting well to remote work — in some cases, even improving their productivity. Nevertheless, even in the nimblest of organizations, there was an inevitable loss in momentum as teams pivoted to meet an entirely new external environment.

The good news: it appears tech businesses are preparing to regain some of that energy. According to a recent NBC News article, as of March 2021, job listings in the sector have risen well beyond pre-pandemic levels.

Six local Boston teams are among those gearing up for expansion. From billion-dollar acquisitions to autonomous flight systems, their reach spans multiple industries — and the job listings are abundant.

 

 

September 9, 2021 2:00 p.m. – 4:30 p.m. ET | 1:00 p.m. – 3:30 p.m. CT Virtual video event presented by all 12 District Banks of the Federal Reserve System

Businesses with no employees other than the owner often turned to personal funds in response to financial challenges during the pandemic. These nonemployers were less likely than employer firms to seek pandemic-related emergency funding and less likely to be approved.

A new paper published by the Federal Reserve Bank of Boston finds that when the measure of wealth includes two major retirement resources – defined benefit pension assets and Social Security wealth – the wealth gaps between white families and Black and other minority families narrow substantially. The paper also finds that when the analysis includes these resources, the white-Black racial wealth gap shows little if any growth over the last three decades. However, white families, on average, still have approximately three times as much wealth as Black families.

The paper, “A New Look at Racial Disparities Using a More Comprehensive Wealth Measure,” is coauthored by Federal Reserve Bank of Boston economist Jeffrey Thompson and Federal Reserve Board of Governors principal economist Alice Henriques Volz.

Studies of racial wealth disparities typically measure the gaps using only market wealth, which is...

examine various careers and educational requirements; evaluate different educational opportunities after high school; identify academic choices and extracurricular activities that will enhance their applications; research the cost of postsecondary education; explore types of financial aid and educational assistance; imagine their own path to success.

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The nation's child care system is broken. Parents strain to afford it, low-paid workers struggle to stay in it, and high-quality care is hard to find. This puts perpetual stress on families and the economy. Still, major reform has been elusive. But is change coming? Advocates say the pandemic has shown that a healthy child care sector is critical to the economy, and the time for comprehensive reform is now. But it faces major obstacles. The cost is massive, and there is sharp disagreement about what it should look like. In Season 2 of Six Hundred Atlantic, we explore the often-overlooked child care sector. Is true change ahead? Or is history about to repeat itself?

The Federal Reserve’s annual credit survey of small business owners always seems full of compelling data and stats to Brian Clarke, a business strategy manager at the Federal Reserve Bank of Boston. But this year had added interest.

The Small Business Credit Survey results were released this spring, but the survey itself was taken between September and October 2020, smack in the middle of the pandemic. So, it offered a glimpse of the responses of business owners to the worst crisis any of them will hopefully ever face. And Clarke was struck with one finding in particular:

About half of all Black business owners who responded (48%) said “credit availability” was a challenge they expected to face through the end of 2021. That’s 8 percentage points more than the next closest racial group (Hispanics) and 18 percentage points higher than white business owners.

“I remember flagging that right away,” Clarke...