(CNSNews.com) - Federal Reserve Chairman Jerome Powell told the House Financial Services Committee on Wednesday that the nation's education system is contributing to the growing wealth gap.
Powell was asked how the top one percent of American families came to own 40 percent of the wealth in this country.
Powell agreed that lower incomes have "stagnated" compared to higher incomes, and he said the gap between those two has never been this large.
He also said upward mobility in the U.S. is less likely than it is in other countries.
"It comes down to the education system needs to produce people who can take advantage of advancing technology and globalization," Powell said.
"And what you've seen is a stagnation in educational attainment in the United States relative to other countries, beginning about 40 years ago and that has been I think the--an underlying force that is driving this phenomenon."
Powell said the Federal Reserve doesn't "have the tools" to directly address income inequality:
My underlying model of the problem is that there is no shortage in the world of good jobs. We just--we just have to produce qualified people--qualified workers who--who can live at the standard of--of a wealthy country and do the work they can do.
And that means better education. It's easy to say. It's very hard to do.
But we need workers who can compete with the other advanced economies for the good jobs. It's manufacturing jobs. It's a lot of service economy jobs. And you know, it's not easy to do. Fixing the educational system and improving it is a very challenging thing. I spent no small amount of time on that earlier in my life.
But I think that's ultimately -- that is it. At the end of the day, the country is its educational system and the people who, you know, the people who are in the country they are a product of that system, and we need to--we need to get ours producing people who can compete in the global economy and--and I think that's at the bottom of the pile, that's an important driver.