A global perspective on the dollar
By
With a dollar in hand, is the whole world at my fingertips? It used to seem that way, but the decreasing value of the dollar in the global market has turned the tables and the whole world is traveling to the United States to take advantage.
In a recent conversation, a friend of mine told me about her international student friends who are always eager to go out to restaurants and movies because everything is “so cheap in the United States.” This conversation caused me to wonder how much the weak dollar is affecting students studying in the United States versus students studying abroad.
The exchange rate is approximately .67 euro to one U.S. dollar. Although currency rates fluctuate daily, the dollar has been losing value compared to other world currencies for nearly a decade. When the euro was introduced Jan. 1, 2002, it was valued at 1.12 to the dollar.
Jochen Kuck, an exchange student from Germany, and Maria Nuevo Cordoba, from Spain, are both studying and working at the University of St. Thomas.
“I liked the idea of coming to the country that has an influence on the world and getting a better insight into that country,” Kuck said about the United States.
Both students are tutors at St. Thomas and have benefited from what they call “cheap” clothing and entertainment, but neither of them has used the weak dollar as an excuse to go on a shopping spree.
“I do basically the same things I do in Spain,” Cordoba said. She goes out, travels occasionally and buys what she needs.
“When I came here I was very surprised because the clothes are very cheap,” she said. The lower price tag has not resulted in a new wardrobe, however.
“Maybe I buy more nice clothes, but not more clothes than I need,” she said.
Kuck said he has invested mostly in clothes and travel. He said, however, that groceries seem to be more expensive in the United States than in Germany. Both Cordoba and Kuck agreed that electronics are noticeably less expensive.
“I go out more than I do at home because of social reasons,” Kuck said. “I still try to limit myself and not to waste.”
Kuck said no matter where you go, whether it is within a city or even to another country, the key is to learn where to shop and where to avoid, because everywhere has a wide range of prices.
“Even though the dollar is weak, you still have to know where to buy what,” he said. “You have to have practical constraints to take advantage of the dollar.”
“For people to say ‘oh, it’s cheap’ is over simplified,” he said.
Deborah Knaust, director of international student services, said it is a misconception that all international students are rich. Although some are wealthy, she said, many are on scholarships and cannot spend frivolously, even if things are cheaper.
“Most students bring money with them and put it in a bank account,” she said.
By doing this, their money is converted to dollars all at once and the students do not have to worry about the fluctuating exchange rate and ATM fees. They instantly know how much U.S. money they have to spend.
The majority of international students at St. Thomas are graduate students. Knaust said one of the issues she has seen in relation to the weak dollar is when students earn money and send it home, and the exchange rate hurts them rather than helps them.
Knaust said the weak dollar has not affected international student enrollment at St. Thomas.
“I don’t think people will choose to do it or not do it because of the exchange rate,” she said.
She said the planning process to come study in the United States takes about a year and there would have to be a dramatic value change in order to see a difference in enrollment.
St. Thomas junior Shannon Kujawski is spending the semester in France.
“The weak dollar is definitely affecting my study abroad experience,” she said in an e-mail. “I'm constantly doing the conversion in my head, ‘Ok, so this sandwich is 4.50 euros, which means about $6.25 and with a drink…’ And all of a sudden lunch each day is $10.
“I don't think the exchange rate will get in the way of me wanting to do everything here in France,” Kujawski said. “There is so much to do and experience that there isn't even enough time to do it all.”
Although money is always on the brain for students on both sides of the Atlantic, they try not to let it detract from their experiences.
“Being an exchange students – sometimes you have to say it’s now or never,” Kuck said.
In the end, I decided to put the dollar in an envelope with Shannon’s name on it. I will give it to her when she returns, when her bank account is empty.