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This revolution, Schulman argued, “was not the product of a conscious feminist ideology so much as it was the result of impersonal economic forces,” and it largely accompanied—rather than
preceded—the more central role women were finding in family fortunes. As women found the economic means to leave unhappy marriages, divorce rates skyrocketed. Journalists began to write of a crisis of masculinity in blue-collar communities.

The young adults of the 1970s, idle in numbers not seen for a long time, were poorly regarded. (Among sixteen- to twenty-four-year-olds, unemployment for a time surpassed 15 percent, far higher than it had ever been in the 1960s.) Cultural critiques described a “wasted” generation, rootless and uncertain. Still,
unemployment never neared 10 percent in the ’70s (though it did spike briefly into double digits in the early 1980s, when the Fed raised interest rates to kill inflation). Inflation was the real scourge of the time, eroding people’s wages and nest eggs. And it was inflation—not joblessness—that left its deepest mark on the decade’s youth.

In
America in Search of Itself
, the historian
Theodore White wrote that conversation in the 1970s was

Families’ savings, carefully built over many years and mostly kept in low-interest bank accounts, were destroyed by the inflation of the 1970s, and with them the ideal of thrift that had prevailed since the Depression. At the same time,
houses, or at least those secured by fixed-rate mortgages, came to look like great investments; as inflation rose, so too did their prices, for the most part. What’s more,
fixed-rate mortgage debt became cheap as inflation rose. As Joseph Nocera wrote in
A Piece of the Action: How the Middle Class Joined the Money Class
, “[I]t became nearly impossible to go to a dinner party in a large American city and not wind up spending half the night discussing real estate prices.” Middle-class Americans “no longer bought a house so much as they ‘invested’ in one.”

All of these developments were duly noted by young Boomers, who—it seems in retrospect—drew lifelong lessons from these formative years. Nocera quotes a young Paine Webber economist, Christopher Rupkey, who in 1979 offered advice to his generation in an op-ed published by the
New York Times:
“ ‘Never buy what you can’t afford’ was the admonition of our parents,” he began. “Today, the statement has been changed to, ‘You can’t afford not to buy it.’ … Get your money out of the bank and spend it! Inflation gives the most it has to give to those with the largest pile of debts.” And so from the fruit of one crisis grew the seeds of the next.

One shouldn’t overstate America’s economic transformation during the seventies, but by the decade’s end, the foundations of the economy we have today had been partly laid. Industry emerged gaunt from the period, and bewildered industrial workers questioned their future and identity. Bill Gates emerged from his garage with a new software company, and rode the wave of the information age.
Newsweek
dubbed 1984 the “Year of the Yuppie,” describing a novel type of young worker whose affinities and loyalties lay not with past custom or nation or employer, but with a social network of similarly educated, like-minded professionals. The term was an insult from the start, and soon disappeared from the vernacular, but yuppies would in fact continue to multiply, forming the center of the new economy. Today we call them the meritocratic elite, and their actions and attitudes have shaped the course of the current crisis.

W
HAT SHOULD WE
take away from these three periods of long economic distress?

For modern readers, accustomed by life experience to the idea that recessions and market downturns are rare and rapidly self-correcting—mere blips between long stretches of growth—each of these periods serves as a bracing caution. All contained growth spurts, false starts, and green shoots. But these upturns proved brief and unsustainable: in each case, for more than a decade, most Americans saw their prospects grow dimmer.

Policy mistakes (or, in the case of the late nineteenth century, the absence of sufficient policy tools) played a part in deepening or extending all of these downturns. And ultimately, the nation’s political balance shifted during each of them, with one party losing credibility and the other gaining traction for a number of years or even decades thereafter.

It is perhaps significant that the downturns of the 1890s and 1930s, both precipitated by major financial crises, were preceded by rapidly rising income inequality and the concentration of wealth. (
Recent academic research suggests that inequality heightens the risk of financial meltdowns, perhaps by inducing the middle class to take on debt in a futile effort to keep up with the Joneses.) Both crises also led, ultimately, to policy reforms that helped reduce inequality in the following decades—decades we remember for their broadly shared prosperity.

History is messy, and one thing evident from a comparison of these three periods is that culture and politics do not respond uniformly to economic shocks. Both the Gilded Age and the 1970s, for instance, saw great spiritual awakenings, as Americans sought order, meaning, and comfort amidst the disruptions of those eras. Yet nothing comparable occurred during the Depression; indeed, by some accounts, religious intensity and adherence slackened.

Yet in all three periods, one can clearly see a slow buildup of social discord, a rise in racial antipathies and anti-immigrant sentiment, the corrosion of trust, and, in general, the mobilization of efforts geared toward trying to recapture some past idyll rather than those that squarely confronted the future.

Perhaps the most-significant transformations were the ones that occurred in private, inside American bedrooms and kitchens or in backyards. Long slumps change marriages, shrink families, and alter the character of neighborhoods. And they shift the path of whole generations. The longer the current slump lasts, the more pronounced these same sorts of shifts and changes will be. But no matter when the slump ends, we’ll be living with the changes for decades to come.

I
’M DEFINITELY SEEING A LOT OF THE OLDER GENERATION SAYING
, ‘Oh, this [recession] is so awful,’ ” Robert Sherman, a 2009 graduate of Syracuse University, told the
New York Times
in July 2009. “But my generation isn’t getting as depressed and uptight.” Sherman had recently turned down a $50,000-a-year job at a consulting firm, after careful deliberation with his parents, because he hadn’t connected well with his potential bosses. Instead, he was doing odd jobs and trying to get a couple of tech companies off the ground. “The economy will rebound,” he said.

Over the past two generations, particularly among many college grads, the twenties have become a sort of netherworld between adolescence and adulthood. Job-switching is common, and with it, periods of voluntary, transitional unemployment. And as marriage and parenthood have receded farther into the future, the first years after college have become, arguably, more carefree. Early in this recession, the term
funemployment
gained some currency among single twentysomethings, prompting a small raft of youth-culture stories in the
Los Angeles Times
and
San Francisco Weekly
, on Gawker, and in other venues.

Most of the people interviewed in these stories seem merely to be trying to stay positive and make the best of a bad situation. They note that it’s a good time to reevaluate career choices; that since joblessness is now so common among their peers, it has lost much of its stigma; and that since they don’t have mortgages or kids, they have
flexibility, and in this respect, they are lucky. All of this sounds sensible enough—it is intuitive to think that youth will be spared the worst of the recession’s scars.

But in fact a whole generation of young adults is likely to see its life chances permanently diminished by this recession. Lisa Kahn, an economist at Yale, has studied the impact of recessions on the lifetime earnings of young workers.
In one recent study, she followed the career paths of white men who graduated from college between 1979 and 1989. She found that, all else equal, for every one-percentage-point increase in the national unemployment rate, the starting income of new graduates fell by as much as 7 percent; the unluckiest graduates of the decade, who emerged into the teeth of the 1981–82 recession, made roughly 25 percent less in their first year than graduates who stepped into boom times.

What’s truly remarkable is the persistence of the earnings gap. Five, ten, fifteen years after graduation, after untold promotions and career changes spanning booms and busts, the unlucky graduates never closed the gap. Seventeen years after graduation, those who had entered the workforce during inhospitable times were still earning 10 percent less on average than those who had emerged into a more bountiful climate. When you add up all the earnings losses over the years, Kahn says, it’s as if the lucky graduates had been given a gift of about $100,000, adjusted for inflation, immediately upon graduation—or, alternatively, as if the unlucky ones had been saddled with a debt of the same size.

When Kahn looked more closely at the unlucky graduates at mid-career, she found some surprising characteristics. They were significantly less likely to work in professional occupations or other prestigious spheres. And they clung more tightly to their jobs: average job tenure was unusually long. People who entered the workforce during the recession “didn’t switch jobs as much, and particularly for young workers, that’s how you increase wages,” Kahn told me. This behavior may have resulted from a lingering risk aversion, born of a tough start. But a lack of opportunities may have played a larger role,
she said: when you’re forced to start work in a particularly low-level job or unsexy career, it’s easy for other employers to dismiss you as having low potential. Moving up, or moving on to something different and better, becomes more difficult.

“
Graduates’ first jobs have an inordinate impact on their career path and [lifetime earnings],” wrote Austan Goolsbee, now a member of President Obama’s Council of Economic Advisers, in 2006. “People essentially cannot close the wage gap by working their way up the company hierarchy. While they may work their way up, the people who started above them do, too. They don’t catch up.” Recent research suggests that as much as two-thirds of real lifetime wage growth typically occurs in the first ten years of a career. After that, as people start families and their career paths lengthen and solidify, jumping the tracks becomes harder.

This job environment is not one in which fast-track jobs are plentiful, to say the least. According to the National Association of Colleges and Employers, job offers to graduating seniors declined 21 percent in 2009. They rebounded by 5 percent in 2010 and are expected to rise again in 2011, but not by nearly as much as they’ve fallen. In the San Francisco Bay Area, an organization called JobNob has been holding networking happy hours since the recession began to try to match college graduates with start-up companies looking primarily for unpaid labor. Julie Greenberg, a cofounder of JobNob, says that at the first event she expected perhaps 30 people, but 300 showed up. New graduates didn’t have much of a chance; most of the people there had several years of work experience—quite a lot were thirtysomethings—and some had more than one degree. JobNob has since held events for alumni of Stanford, Berkeley, and Harvard; all have been well attended (at the Harvard event, Greenberg tried to restrict attendance to seventy-five people, but about a hundred managed to get in), and all have been dominated by people with significant work experience.

When experienced workers holding prestigious degrees are taking unpaid internships, not much is left for newly minted B.A.s.
Yet if those same B.A.s don’t find purchase in the job market, they’ll soon have to compete with a fresh class of graduates—ones without white space on their résumé to explain. This is a tough squeeze to escape, and it only gets tighter over time.

Strong evidence suggests that people who don’t find solid roots in the job market within a year or two have a particularly hard time righting themselves. In part, that’s because many of them become different—and damaged—people. Krysia Mossakowski, a sociologist at the University of Miami, has found that in young adults, long bouts of unemployment provoke long-lasting changes in behavior and mental health. “Some people say, ‘Oh, well, they’re young, they’re in and out of the workforce, so unemployment shouldn’t matter much psychologically,’ ” Mossakowski told me. “But that isn’t true.”

Examining national longitudinal data, Mossakowski has found that people who were unemployed for long periods in their teens or early twenties are far more likely to develop a habit of heavy drinking (five or more drinks in one sitting) by the time they approach middle age. They are also more likely to develop depressive symptoms. Prior drinking behavior and psychological history do not explain these problems—they result from unemployment itself. And the problems are not limited to those who never find steady work; they show up quite strongly as well in people who are later working regularly.

As we’ve seen, young men who suffered hardship during the Depression carried scars for the rest of their lives; even forty years later, unlike peers who had been largely spared in the 1930s, they generally displayed a lack of ambition, direction, and confidence in themselves—a belief that they were powerless before the fates.
Today in Japan, according to the Japan Productivity Center for Socio-Economic Development, workers who began their careers during the “lost decade” of the 1990s and are now in their thirties make up six out of every ten cases of depression, stress, and work-related mental disabilities reported by employers.