Five years of recession: marking the meltdown
On August 9th 2007, the credit crunch began. Five years later, the world is still feeling the effects of global financial meltdown – but how has it shaped the ‘recession generation’?
Five years ago – on August 9th 2007 – the credit crunch began. Today, we know the date as ‘the day the world changed’. It was the point when banks, terrified that their funds were worthless, stopped lending money to each other. It was the day the lifeblood of the global economy suddenly dried up.
In the following months and years, the world fell into a deep recession. The economy stagnated, banks collapsed, and governments – forced to save the day with cash bailouts – faced financial disaster.
Half a decade on, and the shockwaves of that day are still being felt. The Euro is teetering on the brink of collapse. Unemployment is high. And many countries are struggling under mounting debt.
Millions of hardworking people have lost jobs, or been unable to find work. Many have lost savings on stocks and shares; some have been compelled to work far beyond retirement age, or have even seen their homes repossessed.
It wasn’t always like this. The ‘boom’ of the noughties was a time of rising house prices, healthy employment, and an optimistic assumption that younger generations would have a better future than their parents. Now, after the ‘bust’ of 2007, some economies are facing 45% youth unemployment, and pundits talk of a ‘lost generation’, low on cash and hope.
How will these ‘Millennials’ be shaped by the recession? For hints, some experts look to the economic hardship of the 1930s Great Depression. According to some, the babies of those anxious years grew into cautious adults. Few yearned to ‘climb Mount Everest’ or ‘find a cure for cancer,’Time magazine complained; most wanted ‘a good job with a big firm’. Across the generation, the most common job interview query was about what pension plan were on offer.
This ‘silent generation’, the story goes, had to limit its ambitions to what a struggling economy could provide. The children of the 1930s grew up in homes where money troubles meant doubt, stress and penny-pinching – and the atmosphere was contagious.
Will the same be said for the young people of this downturn? Today’s teenagers know times are tough. The harsh reality of recession, some say, will inevitably shape their ambitions and optimism – and turn out a generation that has learned to be content with a little less.
Difficult times, however, can have surprising results. With traditional routes no longer an option, today’s young people will be forced to use creativity, flair and talent to forge their own paths, in areas their parents would never imagine. The downturn does not mean the end of ambition; it is a liberating opportunity to discover new and exciting possibilities.
- How do you think you and your friends have been shaped by the global recession?
- Do you think one generation can have certain ‘characteristics’, or is it meaningless to talk about a large group in a such a general way?
- As a class, create a mind-map of words or phrases that you think sum up your generation.
- Conduct a survey about how people of your age have been affected by the recession. Design an interview or questionnaire that might allow people to share their experiences in an appropriate and sensitive way. Write up your findings.
Some People Say...
“When one door closes, another one opens.”
What do you think?
Q & A
- Who is actually part of the ‘recession generation’?
- The term generally refers to those who grew up during the downturn. That might include children born at the beginning of the credit crunch, all the way to today’s 26-year-olds, who graduated during the recession.
- That’s a pretty big group!
- Good point – and one that makes these definitions controversial. A ‘generation’ includes lots of different people, who have very different influences and experiences of society.
- So why bother making up these terms?
- People in the same generation are likely to have important shared experiences. Today’s teenagers, for example, grew up with the internet; that’s worlds away from the experience of today’s 45-year-olds. Terms like ‘generation’ help sociologists and writers discuss these differences.
- Struggling under mounting debts
- Many countries that were worst hit by the recession are still to make significant progress in paying back big debts. Across 11 key economies – Canada, Germany, Greece, France, Ireland, Italy, Japan, Spain, Portugal, the UK and the US – the average debt is now running at 417% of GDP – up from 381% in June 2007.
- When the credit crisis hit in 2007, governments around the world intervened to try and stabilise the situation. When banks stopped lending to each other, that involved central banks pumping billions of dollars into the economy. Later, some governments bought shares in banks – providing them with enough money to stay afloat.
- 1930s Great Depression
- The Great Depression of the 1930s was sparked by the Wall Street Crash of 1929. It affected countries all over the world, and as a ‘depression’ it was more severe than the ‘recession’ the world is currently experiencing. The instability caused by the crisis contributed to the rise of extremist politics in Germany – and, as a result, the Second World War. In the USA, one of the major causes of recovery after the Great Depression was WWII, which demanded a huge increase in industry.