Teens vs. the Economic Crisis

January 6, 2009
By Brittany Ely, Durham, NC

Homecoming week is just a few days away and Megan wants to buy the dress of her dreams. She arrives at the mall with her mother and finds the dress at a nearby Sears. Grabbing the dress off the rack, she calls her mother hoping she will approve. Her mother picks up the dress and glances at the price tag marking 700 dollars. With her mother unemployed at this time, Megan leaves the dress at the store, finding an old hand-me-down at a local thrift shop. Megan is just one of the teens who feels the effects of the economy. With today’s society of teens, this crisis not only effects are present, but the future we soon hope to live.

Economic crisis are nothing new. During the early 1920s, Americans purchased expensive items such as appliances, automobiles, and televisions, leaving Americans in a pool of debts. On October 21, 1929, Groucho Marx, a famous comedian, received a telephone call from his broker telling him the stock market crashed due to loans he had to pay back to buy stocks. It wasn't long before customers quickly put their stocks up for sale (Appleby 630). In the fall of 1929, stock markets lost $30 billion, causing Americans to face the economies weaknesses. Railroads expanded, banks weakened, and food prices increased. By winter of 1930, 20 percent of labor workers were unemployed and the struggle for families to survive worsened. Many, such as farmers, thought that the government kept powerful interest with itself while ignoring ordinary Americans. Lorenzo D. Lewelling, author of the article A Populist Views American Government says "It is the duty of government to protect the weak, because the strong are able to protect themselves (Goldfield 602). While unemployed families suffered, critics believed money was borrowed from Wall Street to strengthen the bankers’ profit. More than 1,400 industrial strikes broke out, marched by 700,000 workers (Goldfield 603). In 1932, America's fight for a better day began to shine through. President Herbert Hoover stated that "the fundamental business of the country is on a sound and prosperous basis" (Appleby 640). With strong beliefs and hopes, he signed the Reconstruction Finance Corporation to make loans. With these loans, Hoover invested in stronger transportation, banks, city building, and even created federal loans to families in poverty. Hoover's plans failed to strengthen and progress failed. After World War I, farmers were pressured to save their farmland. In order for Americans to survive the depression, they had to give up everything they worked for to keep their homes.

However, Today, our society has been hit once again. Late last year, we were aware of the economic crisis during the 2008 election. Around this time, gas prices were quickly increasing at approximately fifty dollars a barrel. It didn’t seem as a big deal to America until the fall of 2008. It all began with bad news surrounding the mortgage rates. America’s top companies, Fannie Mae and Freddy Mac allowed unqualified home buyers to take out mortgages to pay loans. Low interest rates make mortgage payments cheaper but, with the demand of homes increasing, the prices of the homes began to increase (“Credit Crisis”). The price of homes wasn’t affordable for many Americans causing some to foreclose their homes. If homeowners decided to stay in their homes, it became hard for them to take out loans for the bank. Banks began to cut back sharply on loans, making it hard for consumers and business men to borrow money. In the fall of September, 2008, many banks shut down, starting the rise of unemployment. The unemployment rate increased by 6.7%; shedding 533,000 jobs toward the upcoming months (“Credit Crisis”). America believed no other effect would occur, but when the markets dropped again, the crisis expanded in various branches in our society. Oil and food rose higher than ever forcing effecting consumer’s paychecks. Mark Vitner, a bondsman for Wall Street said “everybody has to eat and everyone has to work. The run-up on gasoline has left consumers with less to spend on everything else” (“Credit Crisis”). With the crisis still in effect today, we wonder what is in line for our next generation of teenagers and working class families.

Families Spending Habits
Before America slumped into an economic disaster, many families had no worries about what they were buying. Families spent money on what they needed and sometimes what they really wanted. Teenagers would get a week's allowance, spending their money on the latest technology, fashionable accessories, or head out to the movies for a little entertainment on a late Friday night. At the same time, the parents had no problem paying the bills on time, and the children were able to spend all on what they desired.
Unfortunately, times have changed for many working class families. With the increasing rate of foreclosures and unemployment, parents and their teens are beginning to see a change in how they spend money. Households making less money than before are increasing their children's responsibilities, adding more to their list of chores. Eleanor Sykes, a mother of three and a employee at one of Raleigh's public hotels has already made some of these changes with her families spending habits. Eleanor says, "Because the boys are working, they are now contributors to the household. The family splits up the bills and there is a certain day I'll ask for the money. Since we all work, we all pay for what we share." While doing my interview with her, I could see that she was surprised to see her sons adapting to the changes. Eleanor goes on to say that "Before, the boys would go to the movies every weekend after school constantly back to back. Now that they're working and have responsibilities at home, they hardly go to the movies anymore. I've also seen a big change in the number of video games they buy. Instead of spending thirty dollars on a game, they actually go to a place where they can trade an old game for a profit". This change might have been easy for Eleanor Sykes, but for some families it might be a challenge. Ashlee Bradley, a junior at Hillside High School is worried about the changes her parents are making. Ashlee begins our interview saying "I'm very spoiled. Whenever we're in the store, my mom lets me and my siblings pick out whatever we want. Because our everyday income is changing, my mom is making me get a job. I'm worried that it will be hard to juggle a job and school." In conclusion, from a parent who has already made these changes, Eleanor Sykes believes that "not only my kids, but everyone's kids are stepping up when it comes to their responsibilities. I think our children need to know that when they grow old, they will be paying for our country's lost wages".
From a Teen's Perspective: Needs vs. Wants
Whenever a brand new pair of Air Jordans hits the shelves, you can only imagine the trouble teenagers go through to get those shoes. Or even when the trendy new IPod arrives, how much money teens are willing to spend. Some teenagers have after school jobs and when they receive their paychecks, they are ready to spend money on all their desires. If the world was surrounded with the necessities in life, maybe we all would be careful with how we spend our money.
Now that families are giving their children the opportunity to work and help around the house, many teenagers have created a budget for themselves and the items they buy. James Soleman is a senior at Millsbrooke High School and feels the pressures of having a budget. James says "This is my senior year of high school and right now I have to make good decisions on how I spend my money. While doing my school shopping, I had to ask myself should I buy a lot of clothes, or save for my cap and gown?" James isn't the only teen feeling these pressures. In fact, students at his school have also began saving money also. He goes on to tell me that "At Millsbrooke High School, I noticed that a lot of juniors and seniors aren't driving as much because gas was so expensive. Most of my friends are now walking, riding their bikes, or taking the bus." When I asked him about off campus lunch, I was surprised at his response. He went on to say that "My mother was the manager of a nearby Bojangles and a lot of my friends would eat there during lunch. Since a lot of my friends cut back on their driving, and some are saving their money, the sales at lunch have dropped because most of the students are eating in the cafe." Not only are teens saving money, but they are finding time at home a way to earn money. Instead of sending tiny infants to daycare, parents are cutting their teens work hours so that they can come home and watch their siblings for a small fee. In Raleigh, small neighborhoods are having yard sales and donating clothing to local thrift stores, making enough money to feed their families. As the demand for needs decrease for young teens, teens are now focusing on the importance in life rather than what they desire.
Education at It's Highest
The day any parent awaits is the day their kids grow up and go to college. But, everyone knows that not only is college exciting, it is also expensive. Families and their kids try everything from scholarships, to grants, and bank loans to get into the college of their dreams. As always, college is very hard for parents and teens to approach because of the expenses. Now that the economy is suffering, it is going to be even harder for parents to get their kids into good schools.
UNC-Chapel Hill, for example, is a very popular school in North Carolina. Many people go to this college for many opportunities in the future. But is it that easy to get in today? For this school and maybe others, the cost for tuition is rising, and a demand for more money options as been requested("Financial"). If getting into the school sounds hard, just imagine the problems people are having on the inside of the schools. UNC-Chapel Hill earned $2.5 billion dollar endowment, but later lost 13% of the profit earned. The money earned from the endowment goes to the schools funds and to any of the school scholarships. Because of the drop in the schools funds, UNC-Chapel Hill and other local schools plan to cut more than 10,000 students next year ("Financial").
So what about community colleges? Community colleges are not as expensive as universities and not as far from home. Although community colleges are easy to apply for, they are also effected by the economy. Community colleges are known for helpful programs that help students in classes and their majors. These programs are also facing tax cuts to save money for the schools funds. Now community colleges are creating programs that don't include so much money from the state("Financial").
Since the economy is taking a toll on education, teenager's are now making better choices in schools. It is said that 5% of students enrolling in college are choosing less prestigious schools due to cost ("Financial"). Instead of paying a fortune at high cost universities, students are enrolling in community colleges, making use of what is to come in the future.
How to Deal
Whenever hard times hit our town, teenagers always find something worthwhile to relieve stress. A group of friends might hang out at the mall until late to shop or you and your family will go out to eat at the new restaurant everyone's been raving about. All of these activities cost little to a lot of money which is not good for America today. To save money on entertainment, teenagers are cutting back on the trips to the mall and our innovating ways that don't require stress and worry into what you are buying. Allen Mask, a junior at UNC-Chapel Hill found away to entertain not only his peers at UNC, but a way to keep his mind off the economy. Audio CDs are one way to store some of your favorite songs other than the IPod. Students are always in a local record store picking up the month's latest album. At popular retail stores such as FYE, Circuit City, and Best Buy, sales for CDs began to drop early spring of 2008. To update something fresh for the campus's students, Allen alongside some friends created their own record label. Allen describes this project as an "actual label. The students are in charge of production, mixing, marketing, and promoting the sound." When I asked him about the start of the record label, Allen said " the idea of the record label began during his internship at Berkley College of Music". It seems obvious that this record label is getting a lot of positive feedback, as he goes on to say "We get a lot of talent while working on this project and my colleagues are excited on the acts to come."
If music isn't your thing, another way teens are keeping their minds off the economy, is by making their own money. Tanecia Leathers, a junior at Hillside High School is a teen entrepreneur. Before and after class, Tanecia opens up a big black bag filled with all kinds of snacks for hungry high scholars. As I began my interview with Tanecia, and defines herself as "a candy seller. I sell candy to make my own money." Like any other student, Tanecia opened up her black bag because of the impact the economy has on her. When asked about why she sells candy, Tanecia says, "Selling candy betters me to make my own decisions with money. These days, food and other needs are getting expensive. Everyone needs to start doing for themselves." Doing for themselves is what teens should do today.
But what if you can't open up your own business? How about spending time at home with your loved ones. While parents come home from a hard day at work, kids finish up on a load of homework from school, it is always nice to sit around the living room floor with your parents. Ebony and Ashley Boyd do the same with their mothers. After a hard day of school work and chores, Ebony and Ashley rent out movies from Blockbuster, pop popcorn, and enjoy each others company. The two call up a group of friends and make the most of the couch and the television. Just because America is suffering from the economy, doesn't mean we have to suffer at home feeling like the mall is the only source for fun and happiness.
The Future
This generation and the next generation of teens can only predict what our future will become after this is over. The future for us teenagers is not determined buy what goes on in the world but what we get done. In my opinion, I think that we should start our own movement in something we are interested in, not only to take our minds off the troubles of the economy, but also to change our perspectives on life and what is important.
In the meantime, Congress is working to prepare a package for Senator Barack Obama to sign when he takes office on January 20th. This package will include safety plans for foreclosures, education and training, and will map out a plan to create green jobs .As this plan takes action, Congress wants to make sure the hardships of unemployment, foreclosures, and education decrease before this plan takes action (Price). With the new president in office, their is only hope that this crisis will end soon.
The economic crisis might have affected oil, food, jobs, and tampered with America's money, but it has also drawn a line for what is next for teenagers. Despite the crash in education, unemployment, and a change in a typical teens spending habit, this event that has hit America has made teenagers aware of what they do. Not only has this effect changed our perspectives on life, it has given us more insight on reality.

The author's comments:
This peice is an eight page page research paper I wrote about the economic crisis and its effect on the society of teens. I got good feedback from my teacher and he told me he enjoyed this paper. I hope you all and the readers enjoy this peice.

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