The Federal Reserve's moves to taper its bond-buying stimulus program could be problematic for workers, says AFL-CIO president Richard Trumka.
Speaking at a Bloomberg Government breakfast in Washington Tuesday, Trumka said, "It does scare me. If they get it wrong and we slow down too much you'll start to see unemployment pick up and job creation slack off."
In December, the Fed started to reduce its asset purchases by $10 billion at every policy meeting. It is currently buying $65 billion worth of Treasury and mortgage-backed securities every month, down from $85 billion a month in December. The next Federal Open Market Committee meeting will be held March 18-19.
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Trumka, whose federation comprises 56 unions with 12.5 million members, said that even though the Great Recession ended in 2009, workers have not seen the benefits of that recovery.
"You still have a higher unemployment rate now six years into a recovery than you did at the height of the 2001 recession," he said.
Unemployment was at 6.7 percent in February compared to 6.3 percent in June 2003 in the aftermath of the 2001 recession.
"Growth doesn't mean anything unless it translates out into jobs, and it hasn't been translating out into jobs," Trumka argued. "Then it doesn't mean anything unless it translates out into people getting above poverty with those jobs."
New Fed chair Janet Yellen told the Senate Banking Committee on Feb. 27 that the central bank will probably continue to scale back its bond-buying program but would reconsider if there is a significant change in the economic outlook.
"We need a new yardstick," Trumka said. "We need to really start talking about jobs, about income, about inequality."
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