A Guide to the “New Normal”

As one might expect, a book whose main subject is exploring the implications of diminished future prospects, Don Peck’s Pinched: How the Great Recession has Narrowed Our Futures and What We Can Do About It, does not make for fun reading. Yet its description of how U.S. society is changing in the reverberations of the 2008 recession is compelling, interesting, and recommended.

Peck, a features editor at The Atlantic, brings accessible journalistic sound bites of data and a broad perspective to his argument that the Great Recession will have an enduring impact on American life. Biting off no more than he can chew, he discusses historical trends from past recessions, and examines how they might already be playing out for three groups—the middle class, the rich, and men. The trends he sees at work are not hopeful, but he does not conclude that they are deterministic. This provides a sliver of hope to the book that is otherwise incredibly, though appropriately, sobering.

While the concept of a “new normal” of stagnant economic growth has come into greater usage in 2011, Peck’s work in this area has been ahead of the curve, and began with a March 2010 piece on long-term unemployment in The Atlantic. As consensus gathers behind accepting the “new normal,” the Obama Administration renews efforts on job-creation, and the 2012 campaign season moves into high gear, Pinched is well poised to highlight some of the landmines and possibilities that will accompany this state of affairs. As such, the book is a definite contribution to the policy conversation, and comes at an opportune time to reflect on our expectations for policy following the Great Recession. It is particularly strong when describing the effects of long-term unemployment and arguing for policies to help mitigate them.

As this issue of the SAIS Review is focusing on generational fault lines, this review will examine that aspect of Pinched most closely. Peck is worried about the millennial generation—those born somewhere between the mid 1970s and the mid 1990s. As they were not yet rooted into the labor force prior to the recession, Peck cites research that states millennials will likely have lower lifetime earnings and lingering psychological effects such as heavy drinking and depressive symptoms, particularly for those of the generation who endure long-term unemployment in their teens or early twenties.¹ These trends lead Peck to conclude that “the urgency of recovery is highest for the young.”²

Despite these trends, Peck also cites a Pew survey from early 2010 that finds millennials “as happy with their lives as other generations, or happier.”³ One shortcoming of the chapter is that Peck does not explore the tension between the difficult situation in which many millennials find themselves and the Pew survey testifying that they are not more miserable than other generations. In his interviews of several millennials, who provide the majority of his original contribution to the narrative of the chapter, he does not include anyone pleased with their work situations. He also politely declines to delve into their psychological health. More expansive interviews would have been an interesting addition to Pinched, but as a short book the lack of depth is understandable. Nevertheless, it highlights an intriguing tension, and one worth further exploration.

When Peck turns to suggesting solutions, he reveals how far U.S. policy is from adjusting to the new normal. He admits that several of his proposals—such as those regarding immigration—are counterintuitive. Unfortunately, they already sound out of line with the cultural shifts he has adeptly described. One of Peck’s greatest concerns is the need to “decrease the social distance that has grown between different American cliques.”⁴ Though Peck breaks his narrative into specific groups, his solutions seek to downplay them. There are no generational solutions, or middle class solutions, or solutions for the rich or for men alone. Peck has trouble squaring the circle...