There's a lot of great advice on this thread. In the spirit of giving advice in brief and moving on, here's two things about academia and grad school that aren't usually mentioned in these threads:
1) Academia operates according to a prestige economy. Many of you are already familiar with the gist of this prestige economy in your worries about getting into highly ranked schools. But it's also important to understand that you, as a PhD student, are a commodity within this prestige economy. Part of the criteria to be awarded an "R1" designation is the number of doctorates produced by the university. Many faculty members like teaching graduate courses as these courses line up with their research and offer more productive conversations than advanced undergrad courses, and advising graduate students can be a important aspect of professional development if you are looking to move from a tenured job at a less prestigious university to a more prestigious one. As undergrad majors in English decline in number, so too do upper division literature courses...making graduate courses all the more desirable from a professor's perspective. The existence of a grad program adds some intangible value to the prestige of an English department at a public university. This is more true of public universities, especially less prestigious ones, than it is of the Ivies, where the level of prestige is already high. What is true of both public unis and the Ivies is that the research agenda of a professor gets a certain glow or buzz when students they advise, and whose ideas might closely reflect theirs, move on to jobs at other universities. As a professor, you never stop being a part of the prestige economy, so it is natural to want this sort of buzz. Now, do all professors actually articulate to themselves these ideas about how graduate students add to their value within the prestige economy? Absolutely not. And several professors may make intentional decisions to resist the prestige economy's moderation of their desires. I say all this so you know the faculty's incentives are not your incentives. They have incentives to attract you to their program, to keep the number of graduate students admitted high, and to encourage you to stay in academia. Your incentive to get a PhD is very different. Keep this in mind from the moment they woo you when you visit, when they talk about the department like it's a family, and when your department acts like the faculty are constantly looking to good by graduate students.
The only way the "system, political" change that @merry night wanderer rightly points to will come about is if tenured and tenure-track faculty mobilize, strike work, etc., in protest of cuts to the budget and hiring freezes. This will never happen. The faculty (will) only strike work if the university proposes to cut tenure/tenure-track faculty positions. And, whatever, I don't blame them. They have mortgages to pay. Their academic identity is a big part of their self-identity. Cool.
2) Don't let the job market reach backward and influence everything you do from the minute you enter grad school. To my mind, the biggest challenge of grad school isn't that new cohorts of graduate students aren't aware of the job market, but that they are hyper-aware of the job market from the moment they enter, and it hangs over them from semester 1. You feel the need to publish as much as possible, and you push yourself to devote time and energy to this in order to make yourself competitive on the market; you may feel the pressure to go to as many conferences as possible; you may feel the need to take on certain professional development activities or service assignments purely based on how that might play to a search committee. Negative feedback from faculty and peers can weigh you down even more so than normal. When you feel this pressure, ask yourself: is this why you wanted to go to grad school? You cannot outwork or outachieve other candidates. Most of you know the academic job market is not a meritocracy, but many probably don't know that all sorts of small, bureaucratic things determine which candidates are hired by search committees. Most institutions prioritize a certain kind of "fit" and it's almost impossible to say in advance what that fit is: a department may hire so they have someone to teach a very specific course on their curriculum; they may hire to expand their research or teaching diversity in a specific way, they may NOT hire a certain candidate because that candidate expressed a desire to teach a course that another faculty member already loves teaching; they may hire a certain candidate because that candidate can also be a 25% hire in the department of Gender and Sexuality Studies or History or Middle-Eastern Studies since those departments have the budget for that 25%. As this is a buyer's market, search committees will have no trouble finding whatever mix of qualifications they want in a capable candidate.
So, if you choose to go to grad school knowing the risks, spend your 5-6 years actually doing what you find intellectually satisfying, in addition to preparing for an "alt-ac" job in the ways OP and other posters suggest. The "normal" work of grad school is stressful enough. Don't get into grad school telling yourself you'll do everything you can to be as competitive for an academic job as possible.