Generation Z is entering the job market and – in one of the great traditions of what Millennials call “adulting” – they are complaining that older generations have had it much easier.
Before all the Boomers and Slackers throw their tablets across the room, let me mention that Generation Z – people born between the late 1990s and early 2010s – is entering adulthood during one of the strongest labor markets in U.S. history. Compared to Millennials in particular, who entered the workforce during the Dark Ages known as the Great Recession, the Gen Z experience is a dream.
“This is the best economy we’ve seen for younger workers in living memory,” Brendan Duke, senior director of economic policy at the Center for American Progress, tells me. Their wages have increased faster than general inflation and faster than any other age group, he added.
Look here: Last year, the unemployment rate for young people aged 16 to 24 was 7.9% – the lowest since 1953, and much better than the 18.4% unemployment rate recorded in 2010, following the recession.
But Gen Z isn’t having an easy life either.
Like the rest of us (hello, older Millennials here), they are fighting an onslaught of inflation that has sent prices skyrocketing over the past three years. Basic necessities have been particularly expensive: Food prices have risen during the pandemic and companies have not been shy about keeping them high, even as supply chains have recovered. Accommodation costs have skyrocketed.
“Housing is a huge challenge for younger workers,” says Duke. “I think it’s the part of the economy where there’s been the least progress in terms of reducing inflation and it’s the part of the economy where younger workers are most affected.”
Surviving inflation becomes much easier if you own a property. Homeowners can take out equity loans or count on a portion of the change when they sell the home. Generation Z has not yet had the opportunity to enter the market.
It’s important to remember, says Duke, that younger workers always start at a disadvantage when they enter the job market. You start with an entry salary, gain experience, and typically see your salary rise. Of course, the long view isn’t very comforting when you’re 23 and eating a meal with six roommates.
“I don’t have money to live”
There is a big difference between the current moment and any other moment in history. Gen Z is entering adulthood armed with a suite of social platforms where they can publicly broadcast their financial distress or, conversely, look up to their peers who are having a better time thanks to generational wealth.
A TikTok user posted an angry rant about the cost of living that has since been viewed 5 million times on the platform, with tens of thousands of comments and shares.
“I earn three times the federal minimum wage and I have no money to live on,” he shouts to the chamber. “It’s embarrassing to come out and say it’s a struggle to survive right now, but I know a lot of people are struggling.” She later concludes, “The American dream is dead.”
Like much of the financial analysis on TikTok, the video goes a little off the rails. But anger and despair point to a real and growing boredom that is taking root among younger people.
Gen Z reports higher rates of anxiety, depression and distress than any other age group, according to a 2022 McKinsey study. The same study found that Gen Z was the least likely cohort to seek medical care for these conditions because behavioral health care is very expensive. “Many Gen Zers also indicated that their first step to managing behavioral health challenges was to go to TikTok or Reddit for advice,” the report said.
It’s hard to blame them: Many Gen Zers saw their formative years destroyed by a global pandemic. Now, older people are facing an adult life that may not allow them the benefits of home ownership, a comfortable income or a stable climate.
This fatalism is particularly problematic when it comes to inflation, which becomes more difficult to combat when consumers expect prices to continue to rise. A recent Bloomberg analysis, based on data from the United Kingdom, revealed that inflation expectations among people aged 16 to 24 have risen more than for any other age group since the pandemic – a fact that, according to researchers, can have a healing effect.
“I don’t have money to live”
There is a big difference between the current moment and any other moment in history. Gen Z is entering adulthood armed with a suite of social platforms where they can publicly broadcast their financial distress or, conversely, look up to their peers who are having a better time thanks to generational wealth.
A TikTok user posted an angry rant about the cost of living that has since been viewed 5 million times on the platform, with tens of thousands of comments and shares.
“I earn three times the federal minimum wage and I have no money to live on,” he shouts to the chamber. “It’s embarrassing to come out and say it’s a struggle to survive right now, but I know a lot of people are struggling.” She later concludes, “The American dream is dead.”
Like much of the financial analysis on TikTok, the video goes a little off the rails. But anger and despair point to a real and growing boredom that is taking root among younger people.
Gen Z reports higher rates of anxiety, depression and distress than any other age group, according to a 2022 McKinsey study. The same study found that Gen Z was the least likely cohort to seek medical care for these conditions because behavioral health care is very expensive. “Many Gen Zers also indicated that their first step to managing behavioral health challenges was to go to TikTok or Reddit for advice,” the report said.
It’s hard to blame them: Many Gen Zers saw their formative school years destroyed by a global pandemic. Now, older people are facing an adult life that may not allow them the benefits of home ownership, a comfortable income or a stable climate.
This fatalism is particularly problematic when it comes to inflation, which becomes more difficult to combat when consumers expect prices to continue to rise. A recent Bloomberg analysis, based on data from the United Kingdom, revealed that inflation expectations among people aged 16 to 24 have risen more than for any other age group since the pandemic – a fact that, according to researchers, can have a healing effect.
‘Millennials’ turn things around
The city of Millennials isn’t exactly sunny: We’re racking up huge debts and many share the feeling that the American dream is out of reach. But distressed Gen Zers may take some comfort from the Millennials’ experience.
Many of us had no job prospects right out of college and spent a decade of stagnant wages (all while the Boomers, who blew up the economy, shamed us for living at home and eating avocado toast). Other jobless Millennials went to graduate school, taking on even more debt that became a huge impediment to economic mobility. (That’s another benefit of a strong job market, Duke notes: We end up with fewer hapless young people taking on college debt that will haunt them.)
It took a long time, but Millennials, in some ways, have already caught up. We’re surpassing Gen X in retirement savings starting in 2022, according to Charles Schwab. And since 2019, workers under 40 have seen wages rise by 14% on average.
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