Photo courtesy of MCT
Federal Reserve Board Chairman Ben Bernanke is scheduled to visit Ohio State’s Fisher College of Business today to hear several business leaders’ thoughts on the job market, and economists say he is not in for good news.
The president of the Federal Reserve Bank of Cleveland will moderate a discussion between Bernanke and five panelists who represent companies ranging from Ford Motor Co. to Jeni’s Splendid Ice Creams.
“They were looking for a cross-section of large, medium and small businesses,” said June Gates, a spokeswoman for the bank.
Bernanke mostly will listen to the discussion to get the business leaders’ perspectives on challenges employers are facing in the current economic conditions, Gates said. Economists say the job market is in turmoil.
With 588,000 people without jobs in Ohio, the state’s unemployment rate was 9.9 percent in October, according to the Ohio Department of Job and Family Services. That rate is well above the healthy range, said Mark Partridge, chair of Rural-Urban Policy at OSU.
“An unemployment rate, say, between 5 and 6 percent would be considered more of a normal rate,” he said.
Although Ohio’s unemployment rate has decreased steadily over the past year, from 10.8 percent in October 2009, it has done so at an extremely slow pace, Partridge said.
“We’ve had about a year of job gains both in Ohio and in the country, but … certainly not enough to greatly reduce the unemployment rate or reduce the real pain out there in the country,” he said.
Unemployment has dropped faster in Ohio than it has nationally over the past year, but the state’s unemployment rate remains slightly higher than the U.S. average. Central Ohio has fared better than the state as a whole, with an unemployment rate of 8.2 percent in October.
But the Fed does not have the power to create jobs, Partridge said. It must do so indirectly.
“By lowering interest rates, the hope is that people and businesses will start borrowing more money and spending more money, and that will create jobs,” he said.
The effects of the Fed’s actions on the economy are still veiled with uncertainty, Partridge said. Most economists believe the Fed’s actions have had minor or moderate positive effects, Partridge said. But many say the Fed has also caused negative economic outcomes.
About 100 invited guests, including OSU students and faculty, will get to view the panel discussion at 3 p.m. in Pfahl Hall. The event is not open to the public. Gates said Bernanke frequently travels the country to participate in this type of discussion.
It will be good for students, especially those graduating soon, to hear what the business leaders have to say about employment, Partridge said.
“Graduates are going to have to be patient,” Partridge said. “They will maybe need to not get the kind of jobs that they wanted when they came to Ohio State. They’ll have to set their sights lower.”
But within a few years, the economy most likely will pick up, he said.
“There will be better times ahead,” he said. “I think things will be definitely noticeably better in three or four years.”