Xavier students face uncertain future about post-graduation plans after shutdown
With the world economy grinding to a halt due to the spread of COVID-19, Xavier’s class of 2020 has been forced into even more uncertainty about their post-graduation plans. With rising unemployment and high levels of price uncertainty, the spread of COVID-19 has had some serious implications for the United States economy with no end in sight.
Most notably for those looking to land a job, the shutting down of the United States economy has meant a dramatic rise in unemployment. The Bureau of Labor Statistics reported that the U.S. economy lost 701,000 jobs in March, marking the first time since September 2010 the economy reported a rise in unemployment. The U.S. economy hasn’t lost more than 500,000 jobs since the Great Recession in 2008.
The April jobs report is expected to be substantially worse than March, and will include the nearly 10 million Americans who filed for first-time unemployment benefits. Additionally, the report did not capture the stay at home orders that went into effect in late March in states such as Ohio. The April report will be released on May 8.
For senior Philosophy, Politics and the Public, and Political Science double major Miles Tiemeyer, the uncertainty in the job market has solidified his plans to do a year of service.
“I know there will be plenty of work to do and that service organizations are still going to need people,” Tiemeyer said. “It does make the process (of finding a service opportunity) a little more difficult. I can’t just pop into the CFJ and talk to people about it.” He went on to say he believes that his service work may look different, but will still be essential.
The global economic shutdown has also caused price levels to fall significantly. Everything from groceries to gas has dropped as people are staying home and consequently spending more money. The average price of a gallon of gas in Ohio has fallen to $1.57 according to the American Automobile Association (AAA).
Combine low employment with falling prices and producers may not be able to make a profit and pay off debts. If business starts defaulting on loans or filing for bankruptcy, the economy will take much longer to recover and further exacerbate issues, such as unemployment, that soon-to-be college graduates will face.
The Federal Reserve Bank (Fed) is looking to prevent this scenario. With $454 billion allocated to the Fed in a recently passed bill, it is looking to keep credit flowing to businesses and governments. Because of the extraneous circumstances, the Fed is allowed to lend money directly to businesses and governments. The $454 billion is supposed to back up these loan programs, which could total more than $4 trillion.
According to the New York Times (NYT), the Fed’s lending program and decision to decrease the interest rate to zero could make loans more available and cheaper for consumers. This could make the COVID-19 moment a good time to consider refinancing student loans if you are in a position to start to pay them off.