At some point, economic recessions trigger social recessions. Individual expectations and behaviors slowly gather the momentum to change cultural values, social relations, and the way entire generations think about key issues such as opportunity, security, prosperity, government, family, and the relative importance of money in life.
Social recessions appear to be triggered by declines in upward mobility and opportunity and increases in income disparity. In response, the young generations lose faith in the secure financial future that they were once implicitly promised, and they start opting out of careers, marriage, and having children.
For many citizens, these seemingly normal options are no longer financially viable. As the path to security narrows, young people realize that "following the rules"—studying hard and trying to fit into corporate/government niches—no longer offers the promised payoff. Cynicism replaces hope, and society stagnates and turns inward.
America is already getting a taste of the social costs of economic decline. Young Americans graduating from college find a world of greatly diminished opportunities for full-time employment and the type of financial security that their parents took for granted.
In Japan, these trends began after the unprecedented bubbles in Japan's real estate and stock markets popped in 1990. Now, a third of jobs that are available are free-lance/contract or other temp jobs, or part-time positions that pay one-third of typical corporate salaries.
Lacking sufficient income to be independent, young people are moving back home or staying at home because that is the only financial option open to them. In bonding themselves to the security of their parents, they enter a state of permanent adolescence in which marriage, having children, and making long-term plans have no place.
It is no secret that Japan's birth rate has been falling for years, but less well-known is the decline in marriage and even relationships.
In these ways, the social conventions of Japan are fraying or even unraveling under the relentless pressure of an economy in structural decline.
Guest Post: When Economic Recessions Become "Social Recessions" - Blogs at Chris Martenson