This paper discusses narratives from young unemployed working class men and women, living in a small Swedish town located outside the emerging economic regions. Like in many other European countries the rate of unemployment among youth is disproportionally high in Sweden. The empirical work the study is based on consists of a sample of in-depth interviews with men and women in the ages of 19-24, conducted during 2014. The main research question of the study is about how young unemployed people experience and reflect upon their own situation. Industrial societies have turned post-industrialand this is reflected in the social structure of the communities that for decades used to be dominated by industries and smaller factories. The labor market has undergone major structural changes during the last four decades. Since the cultural and social identity of the working class traditionally has been closely connected to an intergenerational continuity where foundational elements are defined by work and a belonging to the local community, the situation of unemployment means that the identities as well as the community are forced to be reimagined. The narratives from the young men and women in our study can be seen to reflect social and cultural changes that have taken place on a structural level concerning the labor market, the education system and alsothe changed conditions for the formation of social identities. We make use of Margaret Archers concepts contextual discontinuity and contextual incongruity in understanding and discussing these tendencies.