Monetary policy cannot offset skill mismatches that could hamper employment, according to Federal Reserve Bank of New York President William Dudley.
For economic growth and prosperity, there must be "[a] skilled workforce that is matched to the needs of employers," Dudley told the Rochester, N.Y., Business Alliance, according to prepares text released by the Fed.
"By pursuing its mandated goals of maximum employment and price stability, monetary policy can help labor markets recover by providing incentives for firms to invest and grow," Dudley noted. "However, monetary policy cannot by itself solve skill mismatches that may exist in the economy. These frictions must be addressed in other ways, such as by workforce development policies. That is, monetary policy can complement workforce development policies, but is not a substitute for these policies."
Calling workforce development "a top priority," Dudley said, "We need to help workers build the skills necessary to adapt to change."
Workforce development is a responsibility for all concerned parties: "workers, their employers, their communities and the public sector, as well as education and job training institutions. We all need to share in the responsibility of helping people increase and maintain their skills."
