Why Are There So Few Black Economists at the Fed?

J. Monroe Gamble IV pushed for changes to the hiring process at the Federal Reserve Bank of San Francisco.

—Christopher Smith/The New York Times.

WASHINGTON — J. Monroe Gamble IV was the first Black research assistant to work at the Federal Reserve Bank of San Francisco. He started in 2018.

That one data point speaks to a broader reality: Even as America’s central bank dedicates research and attention to racial economic outcomes and publicly champions inclusion, it has had a poor record of building a workforce that looks like the population it is meant to serve.

Many parts of the Fed system, which includes the Federal Reserve Board in Washington and 12 regional banks, began to concentrate more intently on diversifying their heavily white economics staffs only within the past decade, prompted in part by the 2010 Dodd Frank Act, which pushed the board to hire more broadly. When it comes to employing Black economists in particular, the central bank still falls short.

Officials have often blamed the pipeline — Ph.D. economists are heavily white and Asian — but a New York Times analysis suggests the issue goes even beyond that. Black people are less represented within the Fed than in the field as a whole. Only two of the 417 economists, or 0.5%, on staff at the Fed’s board in Washington were Black, as of data the Fed provided last month. Black people make up 13% of America’s population and 3% to 4% of the U.S. citizens and permanent residents who graduate as Ph.D. economists each year.

Practices that favor job candidates with similar life experiences and those from elite economics programs, which are often heavily white, have sometimes prevented diverse hiring, current and former employees said. A brash culture can make some parts of the central bank unwelcoming, which can lower retention.

Across the board and the Fed system’s 12 regional banks, 1.3% of economists identified as Black alone. That aggregate figure masks wide variation. Five of the banks lacked a single economist who identified as only Black. People who identified as “two or more races” — of whom there were six in the Fed’s whole system — were not included in the count since their racial identity was not specified.

When it came to research assistants, an entry-level version of an economics job that generally requires a bachelor’s degree, 3.7% were Black — versus 5% of economics graduates. Just one of a dozen branch presidents is Black — Raphael Bostic in Atlanta — and none of the Fed’s six presidentially appointed governors are.

The picture that emerges is one in which Black Americans are lightly represented in the rooms where key policy choices are informed and made, even though perhaps no other racial group is so acutely affected by how successfully the Fed manages business cycles.

Since at least the early 1990s, members of Congress have pushed the central bank to hire a staff that looks more like America.

It remains to be seen whether those positions make it into policy, but Biden has hired broadly for top administration roles, including tapping Cecilia Rouse, a Black economist, as chair of the Council of Economic Advisers. None of the top Fed posts in Washington that are appointed by the president have been filled yet — only one is vacant — but diversity is likely to be a consideration.

At a staff level, change will require a more systemic effort. Gamble, who goes by Monroe and is in his 20s, has a story that bears on that challenge in hopeful and cautionary ways.

His family was not affluent while he was growing up in Kansas City, Missouri, but lived in a heavily white school district that had more resources than others in the area, which he counts as an early advantage.

Gamble started at Virginia Tech on a full scholarship, but health issues prompted him to drop out of that program — then another one. For a time he found himself homeless, sleeping on friends’ couches and floors. He worked three jobs at once to support himself, unloading trucks at a sporting goods store, selling men’s suits in the afternoon and working in a pizza shop at night.

He kept his dream of graduating alive. It took him seven years, several colleges and five attempts at multivariate calculus — which he found high school had left him underprepared for — but he finished in 2017 with a degree in business, emphasis on economics, and a minor in mathematics from the University of Missouri.

Every story is unique, but Gamble’s is in line with that of many other young Black men: For the group of students who entered college in 2010, government data show that just 34% of Black men graduated within six years, compared with 57% of men overall.

Such résumés can be a kiss of death in a field like economics, where every summer internship and transcript grade dictates future opportunities.

But Gamble left college with a plan. He had discovered his interest in economics partway through university, when he found an old textbook in a public library and read it cover to cover, soaking in the descriptive logic — only to realize a Black man had written the text. It inspired him.

He dedicated his undergraduate summers to working on research projects with college professors and attending programs meant to help students from less-privileged backgrounds get on track to a doctorate, assembling a who’s who list of academic economists as recommenders.

Still, that wasn’t enough to get him a job at the Federal Reserve Board, the Federal Reserve Bank of Chicago or the Federal Reserve Bank of San Francisco, all of which he had applied to, upon graduation. It did secure him a spot as an economic research scholar at Harvard University. And when he reapplied to the Fed the next year, with Harvard on his résumé, San Francisco hired him.

He felt out of place at the central bank branch and struggled to find meaningful work. He began asking around and learned that he was the first Black person ever to hold a research assistant job. Within months, he was looking to leave.

Then Mary C. Daly, who was the recently promoted president of the reserve bank, had lunch with him.

She, too, had an underdog background. She had dropped out of high school and passed a high school equivalency exam, and had attended a University of Missouri branch. She persuaded Gamble not to give up on the job just yet, urging him to give her six months and promising to help him find something new if he still wanted to leave at that point. He stuck it out — for six months, then for a year.

Even as his own experience improved, Gamble became troubled by bank hiring practices. Research assistants helped to hire the next classes of RAs. He suspected it might be the case that screeners simply did not find Black candidates relatable and ruled them out early on.

He pushed for changes, and San Francisco listened. Application readers began to talk through what would make a good candidate before the hiring process began, and discussed why they assigned job candidates the scores they did.

Fed officials in Washington said they were trying to better serve those goals. The board in 2018 hired Quentin Johnson as its first diversity outreach manager, and he is deepening the system’s relationships with a broad set of schools, including historically Black colleges and universities. Recruiting practices are becoming standardized to correct for hidden biases, the officials said.Whether the effort sticks is the question. Fed jobs should be open “to all competent Americans,” Henry Gonzalez, a Democratic congressman from Texas, once told the Fed chair at the time, Alan Greenspan. Greenspan assured lawmakers the Fed was working toward diversity.

That was 1993.

The story originally appeared in The New York Times.

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