Fed Chief warns of growing inequality in US

Federal Reserve Chairman Ben Bernanke has warned the policymakers to make sure individual workers should not be allowed to suffer too much from the effects of free-trade, globalization, technological progress and other developments that have boosted economic progress for the nation as a whole. While focusing on the increasing income inequality the Fed chief said, on average, Americans have gained a lot of ground economically but while average economic well-being has increased, the degree of inequality in economic outcomes has risen as well. The Fed chief further outlined that the U.S. economy creates painful dislocations in terms of layoffs of workers with outdated skills and factory closing. He drew attention of policymakers that if the downside risks to individuals affected by economic dislocation are not controlled; there are chances that people will be less willing to accept the dynamism of the economy, which is crucial for the economic progress. Though he did not exactly offer specific policy remedied for these problems but indicated that education and training can help to reduce inequality at the same time expanding economic opportunity. His view was supported by few economic experts saying that the analysis was in-line with how most economists feel about throwing up protectionist barriers. They also supported the view that a significant portion of inequality is from technological change and skill bias.

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