While much of the city’s economy has recovered after its initial struggles following the havoc Hurricane Sandy wreaked throughout the area, residents in South Queens and Rockaway continue to need help as they face the daunting challenges of piecing together their lives after the storm, Federal Reserve Bank of New York President William Dudley said during a speech at Queens College this week.
“The good news is that a little more than one year later, there has been a significant rebound in employment and economic activity across the five boroughs,” Dudley told the more than 100 Queens College students and professors who gathered at the Flushing campus to hear one of the Federal Reserve’s top officials speak Monday afternoon. “New York City has continued to see pretty solid job creation throughout this past summer, and, in stark contrast with past economic expansions, this is happening without any direct contribution from the securities industry – or, more colloquially, Wall Street.”
However, Dudley, who spent much of Monday meeting with borough business leaders – including those from the Queens Chamber of Commerce, stressed that much of South Queens and Rockaway are “still struggling to recover” and said his office is routinely in touch with residents and small businesses to determine what shop owners and residents most need to thrive once more.
William Dudley, president and chief executive officer of the Federal Reserve Bank of New York, said the Queens economy is healing well after Hurricane Sandy. Anna Gustafson/The Forum Newsgroup
“Still, Queens as a whole showed strong resilience – employment bounced back from Sandy fairly quickly, and as of early 2013 it had already surpassed its pre-Sandy level,” said Dudley, a former chief economist at Goldman Sachs who replaced now U.S. Secretary of the Treasury Timothy Geithner to lead New York’s Federal Reserve in 2009.
To further inspire economic growth in the borough, Dudley said he believes colleges could better partner with area businesses to ensure that their students are studying topics that will land them jobs upon graduating.
Stressing that the New York Federal Reserve – which encompasses not only New York but parts of New Jersey and Connecticut, Puerto Rico, and the U.S. Virgin Islands and is one of 12 Federal Reserve banks in the country – is closely monitoring student debt, Dudley did assure students that their education, regardless of the financial burden that may come with it, will be worth it in the end.
“The Great Recession and sluggish recovery that has followed has made it difficult for people to find jobs, and I’m sure you may be wondering about whether going to college will turn out to be a good investment, especially if faced with the burden of student student,” said Dudley, prompting nervous laughter from students. “Although the labor market has been challenging for college graduates in recent years, I am confident that most will find work and transition into higher skilled jobs as they gain experience and as the labor market improves.”
Still, student debt is something that Queens students – and pupils across the nation – are struggling with. Last month, the student loan ombudsman at the Consumer Financial Protection Bureau, Rohit Chopra, said that pupils’ debt is contributing to a lag in the housing market – something Dudley also mentioned in an interview with The Forum following his speech.
“If you’re burdened by student loan debt, you can’t buy a home,” Dudley told The Forum. “Student loan debt has gone up rapidly in the last decade.”
But, unlike something like the housing bubble that burst following a proliferation of predatory lending and subprime loans, there is not a student loan bubble, Dudley said, because people aren’t able to “walk away from” the debt. In other words, if an individual declares bankruptcy, they are unable to wipe their student loan debt from their record.
“It’ll follow people around for a long time – it’s not a bubble, it’s a burden,” he said.
Nationally, Dudley said the country is likely on the financial mend.
“I have to admit that I am getting more hopeful,” Dudley said of a recovery following the Great Recession, which began in 2008 and during which unemployment spiked from 5 percent just before the crisis to 10 percent in late 2009. Unemployment now hovers at around 7.3 percent.
Dudley did emphasize, however, that federal unemployment statistics do not account for the underemployed, or those who have given up on looking for jobs.
“If the unemployment rate is declining because people are dropping out of the labor force, that’s not a good sign,” he said.
Regardless, for Queens residents – and those across the country – who have for years dealt with a floundering economy, there is a light at the end of the tunnel, according to Dudley.
“I’m not fearful there will be another financial crisis ahead,” he said.
By Anna Gustafson
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