Conventional wisdom in the United States is and has long been that the Great Recession at the close of the previous decade marked a structural break in important social and economic trends. Proponents of this view often like to portray themselves as a minority of embattled truth-tellers, but from New York Times columns to Treasury Secretary Tim Geithner dismissing stimulative policies as a “sugar high,” the structural view has dominated both the media and the practical policy debate.
But a closer look at the trend data shows this is much less true than people thought. The real story of the past seven years is that the Great Recession was just really, really big. As the recovery continues, the shifts are melting away and revealing something far more boring: that things are going right back to normal.
1) College graduates are getting white-collar jobs
This is a big one. As the recession made jobs scarce, many college graduates found themselves working the kind of low-paid retail jobs they had gone to school specifically in order to avoid. Trend pieces about newly minted bachelor’s degree-holders plying their trades at coffee shops and clothing stores spread across the land. As far back as 2011, Kevin Carey pointed out that these anecdotes pop up during every recession, but the Great Recession lasted so long that the New York Federal Reserve even started releasing a formal index of the phenomenon.
And it was real enough — until the latest update, released this week, which showed that the trend is abating. This is still far from the best of times for new college grads (or anyone else), but things are clearly heading back to normal.
2) People are moving out of their parents’ basements
The bad years generated dozens of trend pieces about young people living at home with their parents, often metaphorically described as living in the basement. Data available inJanuary suggested that this trend was reversing, and late-April census data confirms it — new households are being formed at the fastest pace since 2005, and demand for rental housing is surging.
3) Millennials are buying cars
Another recession-era trend staple was the observation that millennials weren’t buying and driving cars at the same rate as earlier generations. While sharp observers like Brad Plumer thought this might have something to do with the weak labor market, overeager urbanists and trend-hungry journalists often spun it as a deep shift in American values. But guess what? Generation Y now owns more cars than Generation X, as an improving economy is giving more people the financial means to buy automobiles, a technology that remains both useful and expensive, just as it’s been for the past seven or eight decades.
4) Retailers are raising wages
During the recovery years, employment growth has been stronger in traditionally low-paying, low-status service sector jobs than in middle-wage occupations like manufacturing. This reflects a long-term trend that’s been taking place for decades, but mixed with very weak wages during the peak unemployment years led to a surge of worries about a “skills gap” or robots fundamentally altering the economy.
Yet recent months have seen stories about big wage hikes at T.J. Maxx, Walmart, andMcDonald’s, suggesting that the traditional story of supply and demand tells a better tale. With the unemployment rate falling, it’s harder to retain workers at crummy retail jobs, so companies are raising wages.
5) Everyone is moving to the suburbs
In March 2009, the urban theorist Richard Florida predicted that the crash wouldtransform the geography of the American economy in a permanent way. And, indeed, the crash did slow the pace of construction in Sunbelt boomtowns, scarring the economies of Phoenix and Las Vegas in a way that didn’t happen in places like Boston or Seattle.
But there’s been no change in the underlying forces driving suburban sprawl. The American population continues to move on net away from central cities and toward the suburbs. Part of the story is that most people — including most young people — say they prefer suburban living. And even the minority who do like living in central cities are faced with the problem that NIMBY barriers to building new houses in thriving cities like New York and San Francisco make it difficult for them to gain net population.
Of course, there are still a lot of problems
To say the recession is a passing phenomenon that the country is recovering from is sometimes taken as a full-pollyanna sign or a denial of one’s right to complain about broad social problems in the United States. Do not make this mistake! Think back to 2007, before the recession started. America had a lot of problems back then, ranging from high child poverty to mass incarceration to a shockingly inefficient health-care system.
Just because things are heading “back to normal” doesn’t mean you need to stop complaining about longstanding problems. But pretty much everything that made 2011 seem significantly different from 2007 now looks to be a consequence of the ups and downs of the business cycle.