DIMINISHING RETURNS

Throughout the presidential campaign, each of the candidates has invoked the American Dream.

The venerable notion that hard work leads to prosperity - and that every generation does better than the previous one - has long been a rallying cry that tells us who we are and pulls us forward as a nation.

But for young people these days, the American Dream is imperiled.

A forever-altered economy, combined with a seemingly unending recession, is impeding the path to adulthood and prosperity for the "millennial generation" - about 80 million people ages 18 to 34.

In Philadelphia, as elsewhere, young adults struggle with the highest unemployment rates of any age group and with unprecedented levels of college debt.

High school graduates and dropouts face lives of diminishing prospects; college graduates clutch somewhat sturdier umbrellas against the storm.

Although college has never been more vital to success, degrees aren't worth what they were a generation ago: There are 80,000 bartenders in America with B.A.s.

"I was the first in my family to go to college, and it made me feel invincible," says Alyssa Snavely, 31, an unemployed Center City resident with a psychology degree from Temple University.

"Then I was laid off from a medical-caseworker job. Now, I'm going for jobs like snack-bar attendant and not getting them. Seriously. I get a little scared.

"Maybe my generation expected too much, but are we not supposed to expect anything?"

Like a water-main break that shows just how weak the infrastructure below the street is, the recession blew a big hole in the economy, exposing the underlying cracks that have developed over the last 30 years.

Globalization and new technologies have shifted much of the U.S. economy from the production of vital goods to a service-based collection of jobs like selling clothes, foaming milk for coffee, and tending to the hygiene of the elderly.

Years of swamp-stagnant wages and the systemic erosion of unions - which historically bumped the working class up a notch or two - have taken their toll. Men with only high school diplomas in 2010 actually made less money than their counterparts in 1980: $30,000 vs. $39,750 in annual salary adjusted for inflation, according to calculations by Demos, a New York nonpartisan think tank.

In previous generations, a blue-collar job could easily propel a family into the middle class - with a house, a yearly vacation, and the chance to eat steak in a restaurant on a Saturday night.

But all that is infinitely harder these days for people facing what Yale University economic-policy expert Jacob Hacker calls "immobile social mobility, and the most uncertain economic conditions in decades."

While U.S. unemployment is 8.3 percent, unemployment for 20- to 24-year-olds is 13.8 percent - the highest rate for those 20 and over in America. Unemployment for 20-year-olds reached 19.4 percent in Philadelphia in 2010.

Since 2010, just 54 percent of young adults ages 18 to 24 have been employed, the lowest level since 1948, when the government began keeping track, federal data show.

Unlike their parents, millennials - also called Generation Y - are starting out with greater responsibility for their own health insurance and retirement. Young adults, in fact, remain the most uninsured group in the United States.

And if they decide to go to college, millennials must face a new reality.

In numbers

The Young and the Jobless

Unemployment by Age in the Region

As devalued as diplomas are, they're also infinitely more expensive to attain. In the last three decades, tuition and fees have tripled (after adjusting for inflation) for all public and private nonprofit colleges and community colleges.

Meanwhile, the federal Pell Grant, which in 1980 paid for 69 percent of a public four-year education, covers less than one-third today.

Making college more expensive are states like Pennsylvania and New Jersey yanking dollars from public four-year colleges and community colleges, where the bulk of American students matriculate, education experts say.

At the same time, colleges are spending more on upgrading their campuses to attract students.

The result: Students have to borrow a lot of money. Along with their diplomas each May, two out of three graduates are handed a staggering load of student-loan debt, averaging $25,250 - the highest in U.S. history.

In Pennsylvania, student debt is more than $28,000, fifth-highest in the nation. It's about $23,000 in New Jersey.

Like mortgages lugged around for life, the total cost of all student loans is nearing $1 trillion, exceeding all U.S. credit-card debt. And unlike credit cards, student loans can follow you to the grave and can't be discharged in bankruptcy.

"By the time I'm done with law school, I'll have $170,000 in debt," says Mac Robertson, 26, a third-year student at Rutgers School of Law-Camden, who lives in Haddon Heights. "That's a heavy load. It's impossible not to feel trapped."

The only thing more onerous than student debt is student debt without a diploma. That worst-of-all-worlds scenario constitutes everyday life for many of the unfortunate 43 percent of all four-year college students who start school but never complete it.

Even for those who graduate, loans aren't easy to pay back. That's because finding decent-paying work these days is "a disaster," according to St. Joseph's University sociologist Maria Kefalas, an expert on the effects of the recession on millennials.

"Parents around the Main Line are calling each other, asking if they know of any jobs for their kids," she says. "But for legions of college kids, there's nothing. What's distinctive is that so many kids with good college credentials can't get jobs.

"Graduates move into their parents' basements after spending $200,000 for a degree. This economy is a game-changer."

Living at home is becoming more commonplace for late-launch young people compelled to curtail dating and postpone marriage, children, and all that it means to be an adult. Meanwhile, Mom and Dad must be financiers, hoteliers, and cheerleaders, as many parents sacrifice their own financial well-being to keep this generation afloat until it can advance on its own.

More and more jobs - even if they're true blue-collar like auto repair - will require some kind of college or postsecondary training, says Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce. "The only thing more expensive than going to college is not going," he says.

"Kids are damned if they do, damned if they don't."

Last month, a group of millennials known as the Young Invincibles kicked off a two-month, 18-state bus tour called "Campaign for Young America."

With an eye toward the presidential election, the Gen Y lobbyists are looking to push the candidates to address unemployment, debt, and tuition. Their message: Youthful promise cannot be choked off before it is ever realized.

Lately, the economy has been showing nascent signs of improvement. But it's not clear whether conditions will change enough to lift a generation whose numbers include the largest public and private high school graduating class in U.S. history - the 3,318,770 members of the Class of 2008-09.

For so many young people, what's ahead, at least in the near term, appears to be a rugged road.

"It looks like this is the first generation in America worse off than the previous one," says University of Pennsylvania sociologist Frank Furstenberg, director of the MacArthur Foundation's Network on Transitions to Adulthood.

Not everyone agrees. "To say they're worse off is a bit overwrought," says Ohio State University economist Randall Olsen. Still, he acknowledges, "young people are facing an absolutely horrible labor market."

Nevertheless, Olsen and others say, it's premature to predict how a generation whose oldest members are not yet 35 may fare. Anything can happen, and their story is far from over.

Regardless, Furstenberg continues, "one of the most dramatic changes of this generation vs. others is this: It's a longer haul to becoming an adult. And I can't see this pattern changing in the near future."

Laura Wesolowski has problems Big Bird never warned her about.

Back in Cleveland where she grew up, Wesolowski - 29, educated, and unemployed - would watch Sesame Street and infer that she was promised certain things, such as a stable future, if she studied hard.

"We had faith, even from a puppet," says Wesolowski, conscientious and amiable. "Everyone knew Big Bird was cheering you on."

After graduating with honors and two B.A.s in 2005 from the University of Mount Union in Ohio, Wesolowski served in the Peace Corps, then graduated last year with a master's degree in public administration from Penn's Fels Institute of Government. Despite her accomplishments, Wesolowski searches fruitlessly for work and lives on food stamps in South Philadelphia. She owes $100,000 in student loans.

Along with Big Bird, Wesolowski's blue-collar parents offered support, falling into poverty to pay for Catholic schools that kept her out of the raucous city system.

At last count, Wesolowski had applied for more than 250 jobs, from government service to Gallery boutique clerk to waitress. She had two phone and three face-to-face interviews that went nowhere.

"It's stressful because my debt will grow exponentially," she says. "It's affected my ability to have relationships. I can't afford to go out."

To fill time and a desire to be involved, Wesolowski volunteers with Occupy Philly, which attracts angst-driven young people who believe the system isn't working for them. On a recent evening, she helped run a meeting at the Friends Center on Cherry Street in Center City.

Poised and diplomatic, Wesolowski gently guided a group of Occupy people through a tricky thicket of issues centering on a perceived racial slight among members.

Afterward, she talked about her parents and the expectations that have followed her since childhood.

"My parents' hopes are in me, and I feel I'm letting them down. My generation wants to succeed, and given the chance, we could shine. But so many things are holding us back."

The coddled generation. That's the name that has been hung on millennials.

Their parents hovered, scooped up falling children before they ever hit the ground, conferred awards and ice cream, not for winning, but just for showing up.

Preaching from the baby boomer and Generation X handbooks, parents told their darlings they could be whatever they wanted:

"Play the game appropriately, go to XYZ State University, and, poof, there'll be a good, white-collar job out there," says Peter Cappelli, management professor at the Wharton School of the University of Pennsylvania. "But nowadays, that's true only for a small, and getting smaller, section of the workforce."

The young usually get hurt in recessions, since it's hard to launch a boat in a monsoon. But this one has been unusually severe, says Paul Harrington, director of the Center for Labor Markets and Policy at Drexel University. "You'd be hard-pressed to find a post-World War II downturn of this magnitude and duration."

Whether jobs are scarce because they've been outsourced in Asia; they're temporarily (or permanently) lost to the recession; or retirement-resistant baby boomers are clinging to their office desks like lifeboats in a raging sea, many millennials are mal-employed - compelled to work in jobs for which they're overqualified, says Harrington.

In fact, a recent survey reveals that only half of recent college graduates are in jobs that require a college education, according to Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers University.

As the economy improves, "we'll be hiring college graduates mainly because they can read, write, and do math," says University of Wisconsin economist Timothy Smeeding. "Anyone with health and tech degrees will do OK.

"The rest, I don't know about."

Not everyone sees doom and gloom. Economists like Princeton University's Cecilia Rouse have confidence that the U.S. economy will rebound robustly for millennials. "The benefits of college are still high," she says, "and I'm optimistic in the longer term."

And, some experts say, the cream who graduate from the best colleges with well-off families to support them will, as always, rise to live milk-and-honey days.

But enough damage has been done to hurt even the brightest millennials.

For example, job training has been reduced, says Wharton's Cappelli. In the past, blue-collar kids could find apprenticeship programs, while college kids joined a corporation and were placed in management training. Not so much anymore.

In 1979, companies spent $20 billion in job training. Today, it's closer to $6 billion (in current money), according to the National Employment Law Project.

Overall, experts like Penn's Furstenberg believe, America stopped investing in education and human capital, while allowing the minimum wage to stagnate and wages in general to be inert.

From the end of World War II to 1973 - the most prosperous time in American history - family income grew 2 percent to 3 percent a year. Then the up escalator stalled, economists say, with most of the wealth concentrating at the top one-tenth of 1 percent.

What's resulted is a greatly unequal society, with a squeezed middle class and a working class in tatters.

If and when young people begin to get jobs commensurate with their education level, they'll have paid a steep penalty known as economic scarring - as much as 20 percent in lost wages over a lifetime, experts say. Employers typically lower salaries when applicants outnumber positions. When the economy recovers, those who entered the workforce during a recession never catch up.

Along with potentially lower pay, this generation also faces reduced wealth, notes Mark Zandi, chief economist with Moody's Analytics, an economic-consulting firm in West Chester. "Their parents may not bequeath as much as parents of other generations did," Zandi says, "because they're living longer and need that wealth for themselves."

He emphasizes that the script is not completely written for millennials, who will have years to try to right themselves. But, he acknowledges, "it's as difficult a time for 20-year-olds since the Great Depression."

The history boys are adept at telling you what has happened in America. What they can't say is what's next.

Benjamin Landau-Beispiel, 23, and Eric Augenbraun, 24, both graduated from Masterman High School in 2006, where they became friends and fostered a love of history.

Landau-Beispiel, from East Falls, went on to Harvard University, where he graduated with a 3.5 grade-point average; Augenbraun, from Roxborough, went to Penn and graduated with a 3.7.

Between them, their educations cost nearly $400,000. But now, Landau-Beispiel is a janitor in a synagogue in Roxborough, while Augenbraun is a chess tutor for elementary-school kids and does research for a national political journalist.

Landau-Beispiel makes enough money to pay his phone bill. He lives in East Falls with his mother, Susan Landau, a psychotherapist. Augenbraun, who shares a Center City apartment with a friend, earns $12,000 a year.

Both worry that going on to earn their doctorates in graduate school, where they would be met with a glut of history Ph.D.s, would cost them more money and land them in the same situation they're in now.

On a quiet Sunday, Landau-Beispiel scrubs toilets, then turns on a giant Titan vacuum cleaner in the Mishkan Shalom community room. Thin and bearded, the young man affixes headphones to his ears and listens to a lecture on Karl Marx by historian Moishe Postone. Landau-Beispiel is creating his own no-tuition graduate school - absorbing recorded lectures, reading history books, interacting with local professors.

"People of my generation are having a harder time," says Landau-Beispiel, who graduated from Harvard debt-free, thanks to scholarships and his parents' help. "And I don't see a lot of things getting better on their own."

After Harvard, he applied for, among other things, a job with Philadelphia Teaching Fellows, which trains recent college graduates to teach in high-need schools. "But they didn't take me," Landau-Beispiel says, "which was demoralizing."

He was unable to get other jobs he tried for in teaching and at nonprofits. So now he's figuring out the next move.

"I don't want to be a janitor forever, but I don't mind having time to read on my own," Landau-Beispiel says. His mother says that she'll continue to help him: "I'm glad I can provide him a place to live while he does his self-styled learning."

Augenbraun, who still owes $20,000 for his degree, worries that he's not further along in life. "Your parents invest so much in your education, and nothing works out. It's demoralizing," he says, echoing his friend's frustration.

The son of a lawyer and a nursing instructor, Augenbraun has applied for at least 100 jobs - "any job that looked like something I can do," but nothing has developed.

On a recent afternoon, Augenbraun, his reddish hair already thinning, guides 13 mostly fourth graders through the mysteries of chess at Shady Grove Elementary School in Ambler.

"In the opening of a game," he says, "the most important thing is getting your pieces out. We call it development."

It's a good metaphor for getting launched into the work world - and being stymied from starting.

Augenbraun believes that he and his generation may have been misled about what to expect from life.

"The good schools project this image that if you have our degree, it's a ticket to any job you want - which is obviously total B.S.," he says. "I don't think I was properly informed of the negative side to all this."

Then, referencing the poor circumstances he and Landau-Beispiel find themselves in, Augenbraun adds: "If this is what it's like for people who go to the best colleges, how is it for everyone else?"

Afternoons in Port Richmond can drag on.

Those growling pitbulls from across the street never seem to stop fighting. And in the dark living room of the house where Amanda Knauss, 21, lives with her grandmother and brother, the constantly running television offers noise and light, but little else.

Knauss would like to be a pediatrician because she loves children. But that dream seems hopelessly distant.

"I sit here doing the same thing over and over, and nothing is coming up," says Knauss, whose blue eyes are framed in black-rimmed glasses. She talks tough and has multiple piercings and tattoos, but she's an attentive and quiet young woman.

One of seven children from a low-income Irish family, Knauss graduated from Stephen A. Douglas High School in 2007. Hewing to a commonsense code she developed after witnessing a lifetime of strife and bother, Knauss bucked local trends by avoiding drugs and single motherhood.

Still, Knauss always felt that she should move ahead, so she went to Lincoln Technical Institute in West Philadelphia, a for-profit school, to become a medical assistant. A high school teacher with a soft spot for Knauss had urged her to try.

She earned a diploma after a year, but didn't get certified because she failed a final test. Knauss can retake the test, but it costs $100, and that's way out of her reach.

Beyond that, she owes $8,000 in student loans, a debt that may as well be $80,000. These days, she makes pocket money helping an elderly woman, not enough to pay her debt.

Finding a decent-paying job has been impossible, and Knauss isn't sure what she'll do. "I get so mad," she says. "I want to pay my own bills."

Knauss' grandmother, who's 67, disabled, and receiving food stamps, tells Knauss stories about the way things once were: "Back in the day, there were jobs," Knauss imparts her grandmother's wisdom, as though recounting tales of an impossibly lush and lucky time.

With a combination of unvarnished earnestness and magical thinking, Knauss says things will work out: She'll somehow get the $100, become certified, then go on to college, conquer organic chemistry and medical school, then finally become a baby doctor.

"I have no doubt I can do it," Knauss says in the dark, by herself, in the middle of an endless afternoon in Port Richmond. "No doubt at all."

In February, presidential candidate Rick Santorum labeled President Obama "a snob" for saying that young people need to go to college.

Jeff Strohl, director of research for Georgetown's Center on Education and the Workforce, believes that generational survival, not snootiness, informs the president's plan.

In 1970, 25 percent of all U.S. jobs required some college education, Strohl's research shows. Today, it's 59 percent.

By 2017, Strohl predicts, job growth will be well along the road to recovery. And by 2018, 63 percent of jobs will require some college-level education.

"A restructured economy demands more postsecondary education," Strohl says. "And we're not keeping up."

Thirty percent of people 25 and older had bachelor's degrees or higher in 2010, census figures show. An additional 9 percent had associate's degrees.

In these tough times, young people need to go to college - not because it pays so much, but because high school graduates earn so much less, says Tamara Draut, vice president of Demos, the think tank.

Economists calculate that a college graduate makes about $1 million more in a lifetime than a high school graduate.

The Obama administration sees community colleges as filling in the gap. But community colleges are in crisis, with overcrowded classrooms and low graduation rates.

Others try to get certificates or degrees at for-profit colleges. But many such institutions have enormous tuitions - sometimes twice that of nonprofit schools - and low graduation rates.

For high school graduates, it's vital that they get to some form of postsecondary education to earn a certificate or degree, experts say. Not necessarily a diploma from Stanford. But something.

Certificates are no small thing. Nearly 30 percent of people with postsecondary licenses or certificates earn more than the average B.A. recipient, according to the Harvard Graduate School of Education.

For students attending four-year colleges, what's needed is an intervention, of sorts, says Van Horn of Rutgers. Someone needs to step in when a sophomore is taking lots of philosophy or poetry classes to advise her to pick courses that will get her a job.

What can't happen anymore, experts insist, is a baby-boomer-inspired ideology that encourages young people to drift through college without a plan.

"Follow your bliss?" asks Barbara Ray, a researcher, author, and millennials expert with Furstenberg's Transitions to Adulthood group.

"Are you kidding me? These kids will be following their bliss right into debt. I'm not sure they realize this is a high-stakes game, but we are still playing by the old rules."

Ray says we're facing a do-it-yourself economy in which people will battle school debt, constantly change and reconfigure their jobs, find a way to educate their children and to finance their own old age.

Starting right now, millennials should learn to lower their expectations.

"They'll be taking their second-choice jobs, not their first," Van Horn says. "Many won't have economic success, and they'll have to redefine what they need to be happy.

"Or they'll be very unhappy."

Ray agrees. "Young people are bright and optimistic," she says, "but they're heading into very heavy headwinds, and I don't think they've realized it quite yet.

"They think things will work out. But I'm not so sure they will."

Basketball makes sense. Dribble, set, shoot. One thing follows another in a logical progression.

The game can be a salvation, and for Cahlin Spearman, it's good that something in his life is simple.

The 27-year-old from West Oak Lane has had it tough. No father, harsh neighborhood, a pitiless beginning.

Still, he made straight A's at George Washington High School in the Northeast. He worked hard in school because his neighborhood offered few savory choices.

"Being a young black man, people are not necessarily going to give you a chance," he says. "And no one's going to put faith in someone without qualifications."

So Spearman got some.

He graduated from Indiana University of Pennsylvania and, last year, got his master's in education from Lincoln University in Philadelphia. Spearman works as a health and gym teacher at a West Oak Lane charter school and is looking to earn a doctorate in psychology. His only worry is increasing his student debt load from $60,000 to $90,000.

While Spearman likes teaching, he fancies himself an entrepreneur: He wants to open a 24-hour basketball gym so he can make money and work with disadvantaged children.

Growing up, he had always heard that all you needed to get ahead was a college degree.

But as a graduate searching for work, Spearman quickly realized that that was outdated information.

"Who knew college wasn't enough?" he says. "Who knew a master's wasn't enough? I had never read the fine print, and that fine print is crazy. It tells you that every degree has its limitations."

Spearman says his grandmother worked as a secretary for an insurance company for 30 years. She has a pension now and pays all her bills.

But, he says, "everything has changed, and there's more competition. It makes it harder for me. But that's why I keep getting more educated."

On a recent day, Spearman was at a park near his home teaching some neighborhood kids the finer points of shooting.

On the court, it's all smooth pivots. If only life were that way.

"You just have to scrap and claw and find a way," Spearman says. "It's got to get done."

Lithe and tall, Kat Richter, 26, counts out a rhythm: "Five, six, seven, eight!"

Seven tiny girls and one boy obediently stomp out a tap-dance routine in front of a huge mirror in a Trevose dance studio. They giggle and fuss as Richter corrects their errant moves. Times may be tough, but little kids in Bucks County still dance.

Richter has cobbled together three dance-instruction jobs like this one. The South Philadelphia woman, who lives with her parents, attended Oxford University in England and has a graduate degree in dance anthropology from Roehampton University in London.

Her plan was to teach anthropology and to make a living as a writer, but she hasn't gotten anywhere. Instead, she gives little girls a chance to wear leotards and spiffy black shoes, and blogs about her life.

With a relative's help, she's managed to reduce her student debt to $10,000.

"This is not what I had dreamed of," Richter says, relaxing with her mother one day in a Queen Village cafe. "I've invested huge amounts of time and energy and financial resources into my education, and this is the best I can find. I did what I was supposed to do. Yet, I don't own a car, and I don't have health insurance.

"In some ways, my generation was entitled. I think the coddling happened in high school for me. We didn't have to work that hard. Then we came out into the real world, and it's been an eye-opener."

Richter's mother, Deborah, a community activist, is a normally positive person who throws Oscar parties, complete with a red-plaid carpet. But she's worried.

"Kat and my husband and I - we did everything right," Deborah says. "We tried to teach her and her brother to find fulfilling jobs that were also good for the world. Now, neither has health care. It's difficult as a parent to see they have to choose between getting a job that's their passion and doing something just to get health care.

"Our vision for our kids has changed. I see them as having to wait longer for their dreams to come true."

Richter's father, Stephen, a ship's pilot who docks boats when they reach port, is unhappy about millennials' lot.

"Everybody is either sacrificing or not fulfilling their dreams," he says. "They worked hard, and it's still not enough to ensure financial well-being.

"The deck is stacked against these kids."