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Treasury secretary claims economy has 'never worked fairly' for black Americans; experts say inflation hits them hardest

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Shawn Thew-Pool/Getty Images

Treasury Secretary Janet Yellen claimed Monday the United States economy has “never worked fairly” for black Americans and people of color.

And now economic experts are saying high inflation and other economic woes attributed to President Joe Biden’s policies are disproportionately impacting the same people Yellen invoked.

What did Yellen say?

Speaking at an event hosted by the National Action Network, an organization founded by Al Sharpton, Yellen claimed the American economy works fairly only for white people.

"From Reconstruction, to Jim Crow, to the present day, our economy has never worked fairly for Black Americans — or, really, for any American of color," she said.

Yellen then claimed the Biden administration has worked to correct systemic economic injustices but cited only an "equity review," "diverse leadership," and Biden's COVID bill, the American Rescue Plan, and a $9 billion investment into community development financial institutions and minority depository institutions.

"Since taking office last January, our administration has tried to change that, to ensure that neither the figurative bank of justice – nor any literal economic institution – fails to work for people of color," Yellen said.

"It has been a year of action, especially at the Treasury Department.," she continued. "We’ve completed Treasury’s first equity review, looking across the Department and asking: Where are our operations not as inclusive as they should be? We’ve brought on the most diverse leadership team in Treasury’s history and hired the Department’s first ever counselor on racial equity. And then there’s Treasury’s pandemic response. We knew that the communities hurt most by COVID were often communities of color, and so as we began implementing relief bills like the American Rescue Plan, we did so with equity in mind."

But what is happening under Biden?

Inflation has been surging under Biden and reached a whopping 7% in December, the highest rate in 40 years. Experts blame, at least partially, the American Rescue Plan for rising inflation.

Unfortunately, experts also say inflation hardest hits those Americans Yellen claimed receive an unfair shake in the U.S. economy.

Business Insider reported in November:

Inflation has hurt lower-income families, families of color, and rural households more than other demographics, a Bank of America research report found last week. Breaking down demographics by race, geography, and income, the bank found that the "inflation shock" of 2021 has disproportionately affected the marginalized: Households without college graduates, African American, Hispanic and Latino communities, and those not living in cities have been spending more of their post-tax income on goods and services.

Inflation hits Americans lower on the socio-economic ladder because they possess less wealth. Those who have less wealth and tighter budgets immediately feel the impacts of inflation, which decreases the purchasing power of every dollar. Wealthier Americans, however, are generally less impacted by inflation because they have more budgetary margin.

Meanwhile, unemployment among black Americans rose to 7.1% last month, more than double the figure for white Americans. It does not appear, at least right now, that Biden's economy is working for black Americans.

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