Recently, Golden LEAF President, Chief Executive Officer Scott T. Hamilton sat down with Tom Barkin, President and Chief Executive Officer of the Federal Reserve Bank of Richmond, via Zoom and filmed the ninth episode in a video series called Critical Conversations. In this series, Scott talks with professionals about economic development issues affecting the state.
Barkin provided his perspective on the economy of 2021 and his thoughts on the economic outlook of 2022.
As part of the nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Federal Reserve’s Board of Governors in Washington, D.C., to support a healthy economy. The Richmond Fed is based in Richmond, Virginia, with branch offices in Baltimore, Maryland, and Charlotte, North Carolina. The Richmond Fed fosters economic stability and strength by promoting stable prices, employment, and moderate interest rates. The Richmond Fed connects with the District’s communities and business leaders to better understand local economic conditions across the District.
Barkin became the president and chief executive officer of the Richmond Fed in 2018. Barkin explained that the Federal Reserve oversees the 175 banks in the region he serves, oversees monetary policy and interest rates, and oversees bank payments.
Barkin visits small towns and large cities to understand the different economies and how to help them thrive within the national economy. The Federal Reserve has worked with community colleges and broadband issues as a part of the solutions to economic challenges.
While looking back at 2020 and 2021, Barkin stated that the pandemic has had the fastest economic recovery in history. He also stated that while the demand is there, the economy has not normalized because there aren’t enough workers or materials to keep the supply chain moving. He does not see another mass shutdown occurring over the pandemic, but he is seeing shutdowns due to the inability to acquire needed parts for manufacturing plants.
Barkin hypothesizes that the labor shortage will take longer to recover. While the worker shortages were a problem before the pandemic, Barkin said the economy is still down about 4 million workers. He said a solution to this issue could be industry committing to hiring skilled workers after they go through training programs. He also indicated that marketing industry opportunities as long-term, quality careers will help the next generation of workers choose jobs that require skilled labor. He also indicated that removing barriers to training such as providing community colleges with needed equipment and hiring more instructors to train students will help put more students to work.
Barkin addressed the “great resignation.” Barkin said 35%-40% of those leaving the workforce are older workers who are at retirement age. He also said working class parents with small children are dealing with unstable school or childcare situations. Barkin also said a smaller portion of the changes in the workforce include changes from one industry to another.
Barkin mentioned Golden LEAF funds programs that support workforce shortage solutions such as providing training for the growing pharmaceutical industry. The Eastern Region Pharma Center at East Carolina University is a public-private partnership, supported by Golden LEAF, that enables students entering various careers in pharmaceutical manufacturing to earn four-year degrees from ECU without leaving their home communities and provides professional development for existing workers. The state’s pharmaceutical companies can also use the lab equipment to develop and test new manufacturing processes. This unique program is working with surrounding community colleges and industry partners in the bio-pharma crescent of Edgecombe, Johnston, Nash, Pitt, and Wilson counties to provide training and degrees for more than 400 positions in the pharmaceutical manufacturing industry.
Critical Conversations is a feature in the Golden LEAF newsletter every month. The next edition will be in our February 10th edition of LEAF Lines.