We’re all reeling from the spike in the cost of gas and food (those PB and J sandwiches and weekend road trips aren’t exactly the low-cost options they used to be). These money woes are compounded by a disturbing reality: most young people today are earning less than their parents did a generation ago. Young men without bachelor’s degrees have taken the biggest hit, with typical earnings nearly 30% lower in 2005 than they were in 1975. Today’s generation of non-college educated young women have also lost ground, but not as much. They typically earn about 10% less than their moms did at this age. You can check out all the details in The Economic State of Young America, a new report published by Demos.

So what gives? Why is the typical 20-something not keeping up with their parents?

To answer that question, we need to look back at what it was like to be a young adult just starting out three decades ago. First, our economy provided jobs with good wages even for those without bachelor’s degrees. Second, when the economy heated up, workers reaped the benefit in the form of higher wages. And finally, there was a range of public policies that helped people move up and kept them from hitting rock bottom—such as a strong minimum wage, affirmative action policies, low college tuition at state universities, generous grant aid to help lower income students afford college, and an unemployment insurance system that helped people pay bills when they lost their job.

Simply put, the economy and public policy worked hand in hand to make a middle class life possible for millions of young people. And to make the term “middle class” synonymous with economic security.

This world no longer exists.

And while globalization and technological change have fundamentally altered our nation’s economy—and share some blame for the new pressures on young Americans—much of the blame sits squarely on a set of failed policies and ideas that were set in motion long before many of us were born.

The generational decline we’re experiencing is the product of a decades-long attack on the social contract. This ideology ushered in a type of referee-free capitalism where the role of government in society was disputed, degraded, and demoted.

So, policies like the minimum wage were dismissed as interfering with the miracle of business. Public investment in higher education was slashed in favor of tax cuts. Federal financial aid became a debt-for-diploma system that made student loan companies rich while crippling access for lower income students. Mandatory minimum sentencing laws and racially biased drug laws were adopted, leaving millions of young men without hope or opportunity.

At the same time, the new realities of life that have been shaped by globalization, technological change, and shifting cultural norms have not been addressed by public policy. Our workforce development strategies are unsophisticated. Our family policies are woefully inadequate. And our safety net is antiquated. What’s left of the social contract was designed for a time when a high school degree was enough to earn a middle class living, when most women with young children weren’t in the labor force, and when a job lasted 20 or even 30 years and came with health care and pension benefits.

So what’s a 20-something to do?

Get organized—both personally and politically. Cut back on your personal spending and ramp up your political activities. If you haven’t already done so, check out where the candidates—Congressional and Presidential—stand on issues like job creation, college tuition, health care, and cracking down on credit card abuses so you can make an informed choice this November. Make sure your voter registration is up to date. Join Qvisory. Email your elected officials and let them know you’re out there and paying attention. Seek out organizations who work on these issues and join their campaign.

Our generational predecessors, the Baby Boomers, got one thing really right. They developed the idea that the Personal is Political—a mantra that came out of the women’s movement in the 1970s. It was meant to convey that every part of our personal lives could be impacted by the political situation. As we grapple with the enormous economic challenges confronting us, it’s helpful to remember that The Personal is Political.