Former Council of Economic Advisors Chairman Jason Furman said Friday that the Federal Reserve alone can’t solve the problem of slow wage growth.
“The Fed can’t fully solve the problem,” Furman told FOX Business’ Adam Shapiro. “It means that we need to solve the problem with business tax reform, with expanded trade, with more investments in infrastructure and scientific research. We need to do things that will get productivity moving faster. Not think that just moving around interest rates is going to solve the problem that workers are facing in our economy.”
Furman, who served during the Obama administration, said he believes slow productivity is partly to blame for the stagnant wage growth in the U.S.
“Right now the most important thing going on in our economy is the slow productivity growth, and it’s radiating through everything,” he said. “I think we could still see faster wage growth, even with the productivity we have. But we couldn’t see much faster wage growth on a sustained basis unless we have higher productivity growth. And unfortunately that’s one of the things the Fed can’t control.”