Sen. Elizabeth Warren (D-Mass.) is working to preserve Coretta Scott King’s legacy of fighting for economic justice through the Fed. (Andrew Harrer/Bloomberg News)
David Stein is a Lecturer in African American Studies and History at UCLA and co-author with Center for Economic and Policy Research and the Center for Popular Democracy’s Fed Up campaign of “The Full Employment Mandate of the Federal Reserve: Its Origins and Importance.”

In February, Senate Majority Leader Mitch McConnell (R-Ky.) silenced Sen. Elizabeth Warren (D-Mass.) for reading Coretta Scott King’s well-publicized denunciation of Jeff Sessions’s appointment to a federal judgeship in 1986. Two weeks ago, while the nation’s attention was on the dramatic struggle over the future of health care, Warren again defended the legacy and civil rights work of King. This time, Warren received notably less attention for her comments, which came during consideration of the president’s appointment to the Federal Reserve. But the issue on the table was equally important to King: the future of the Fed’s priorities.

Economic justice had been at the heart of the black freedom movement for decades. How to best pursue that goal, however, presented a challenge. While figures such as King focused on a legislative federal job guarantee, they also understood the role that the Fed’s monetary policy could play in securing full employment for all.

The Fed affects the lives of everyone in the United States — helping determine the amount of interest we pay on our student loans and credit card bills, as well as influencing the level of unemployment. The Fed sets the benchmark interest rate, which then affects the rates that lenders grant borrowers. If the rate rises, borrowing slows. The cost of buying a home or a car goes up, business investment gets more expensive and getting a job becomes more difficult. And job scarcity hurts those most discriminated against in the job market. As such, the Fed’s monetary agenda has become essential to the historic struggle for economic justice.

Like her efforts to expose Sessions’s discriminatory record on voting rights in Alabama, the issue of full employment was personal to King. While she was still a young woman in Perry County, Ala., about to leave home to attend college in Ohio, her congressman stifled a piece of legislation that ended up shaping the rest of her life — and ours, too. The Full Employment Bill of 1945 held that it was the responsibility of the federal government to provide jobs for all those who needed them. It expressed legislatively what President Franklin D. Roosevelt had announced as “freedom from want.”

Polling showed that more than 67 percent of Americans supported the idea behind such proposals, which helped propel the bill’s 71-to-10 passage by the Senate. But it soon ran into the political and economic roadblocks of Jim Crow America. Seeking to maintain the racial and economic status quo, Perry County’s congressman and chairman of the Committee on Expenditures in the Executive Departments (which today is the Committee on Oversight and Government Reform), Carter Manasco, surgically removed some of the measure’s most innovative proposals. While the Employment Act of 1946 did pass a few months later, it lacked the budget or institutional ability to fulfill its earlier goals.

Civil rights activists, however, continued to pursue governmental guarantees for jobs, having seen how labor market inequities were magnified for those who experienced any amount of discrimination, especially women and people of color. As the stagflation crisis of the 1970s deepened and unemployment hit its highest point since the Great Depression, King focused her energy on eliminating unemployment altogether. The result was the Humphrey-Hawkins Full Employment Act, which aimed to patch the wounds dealt to the 1945 Full Employment Bill by Manasco and other Southern Democrats.

These days, the 1978 law (along with the Federal Reserve Reform Act of 1977) is best known for institutionalizing the Federal Reserve’s dual mandate to promote maximum employment and price stability. Many of the law’s early drafts met a similar fate as the 1945 bill, as the most far-reaching proposals to eliminate unemployment were undermined by business opposition. But it had success in promoting greater coordination between fiscal policy dealing with taxation and spending and the Fed’s monetary policy. Before this, officials with Congress’s Joint Economic Committee had trouble even getting basic information from the Fed. Now, the Fed was required to give biannual Humphrey-Hawkins testimony, intended to hold the Fed democratically accountable and ensure that it is fulfilling its dual mission.

King and her fellow civil rights organizers recognized that the Fed could facilitate better labor market conditions for black and Latino workers if it were required to take unemployment into account in conducting monetary policy. These policies have worked. During the late 1990s, the Fed kept interest rates low, which encouraged businesses to expand and hire more workers, ultimately enhancing the labor market conditions for all, including black and Latino workers.

Fed Chair Janet L. Yellen has continued to affirm her belief in the Fed’s full-employment mandate and in the idea that a full-employment economy helps alleviate racial disparities in unemployment and wages. Today, activists with the Center for Popular Democracy’s Fed Up Campaign have grabbed King’s baton, pushing the Fed to do more to promote economic and racial justice by slowing its planned interest rate increases.

Under President Trump, however, the Fed’s employment mandate is in peril. Marvin Goodfriend, one of Trump’s leading candidates to fill a position on the Fed’s Board of Governors, has suggested eliminating it. Trump has also nominated Randal Quarles to the position of Fed vice chair for bank supervision. Although Quarles backtracked a bit under questioning before the Senate Banking Committee, he has promoted a rule that would undermine the Fed’s ability to achieve the employment mandate.

Although it may not have the drama of Sen. John McCain’s 2 a.m. vote on health care, these hearings have a similarly profound effect on us all, particularly people of color. These proposed changes at the Fed are not only a direct affront to unemployed people, but also another insult from the Trump administration to the legacy of King.

At the signing ceremony for the Humphrey-Hawkins Act, King likened the law’s potential importance to the Civil Rights Act of 1964 and the Voting Rights Act of 1965 because it dealt with “an issue on a basic human right that’s the most basic of all human rights, the right to a job.” The future that she dreamed of has not come to pass — at least not yet. This current struggle around the Fed is vital to maintaining King’s prophetic vision of an economy that provides for all. The Fed’s employment mandate is a living monument to the civil rights struggle for economic justice. It should be celebrated and strengthened, not desecrated.