Young people today are doing better than ever when it comes to employment and wages, so why don’t they feel like it? And why are they still relying on the Bank of Mom and Dad? That’s the question posed by a new study from Pew Research Center, with the puzzle of Gen Z being better off and still somehow struggling.
The data shows that Gen Z is doing much better than young people in the 1990s when it comes to wages, and as Gen X was largely responsible for parenting Gen Z, that means that many children are outperforming their parents. In 2023, the median pay of a person between the ages of 18 and 24, for instance, was about $20,000, compared to $15,462 in 1993, when adjusting for inflation. And those between the ages of 25 to 29 make nearly $10,000 more than the young adults of 30 years ago.
As more women enter the workforce, employment numbers for young people in the U.S. have also increased. About 70% of adults in the 25-to-29-year-old category had a full-time job in 2023, compared to 65% three decades ago, according to Pew.
Gen Z may seem like they are doing great on paper, with better pay thanks to higher levels of education and a propensity to job-hop, but still say they are struggling to keep up, while Gen Z has well-publicized mental health issues, at the same time as they are mainstreaming discourse around the importance of mental health, especially in the workplace. The Pew data suggest that there’s a simple economic aspect to this: While wages are higher, many young people are hindered by higher costs that did not affect previous generations as drastically—and it’s directly affecting when they attain certain life milestones. Simply put, it’s depressing for Gen Z not to be able to afford the trappings of normal life as their parents did.
In debt for longer, getting married later
Just under half of adults in their mid-to-late twenties had outstanding student loans in 2023 compared to just under a third in 1993. The median amount owed has also jumped from four digits to five as the cost of college has become increasingly unaffordable for some. Still, college enrollment rose last year for the first time in a decade.
Over the past couple of years, the Fed’s interest rate hikes have helped put Gen Z on the real estate sidelines, but so have rising prices. And those young adults who do buy a home are straddled with higher mortgage debt than previous generations—although a recent Redfin study has pointed out that Gen Z is working hard to counter this, with a surprisingly high homeownership rate compared to previous generations, even baby boomers.
Adjusted for inflation, an 18-to 24-year-old in 2022 had a median mortgage debt of $117,000, compared to $39,367 for those in the same category in 1992, according to Pew. The same trend applies to those between the ages of 25 and 29, who had a median adjusted mortgage debt about $60,000 higher than their counterparts in the 1990s.
Consequently, many young adults have delayed major life events that used to define adulthood, such as moving out of a parents home and getting married. The study revealed that 57% of adults in the 18 to 24 range lived with parents, compared to 53% in 1993. The pattern holds true for slightly older adults in their 20s as well.
The median age for getting married and having kids has also increased, in line with the trend from other developed nations. While in 1993 half of adults in their mid-to-late twenties were married, less than a third were as of last year, and even fewer had kids.
If you are a young person who feels weighed down by increased costs for housing and education and has struggled to get ahead, Fortune wants to hear your story. Contact marco.quiroz-gutierrez@fortune.com and tell us more.
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FAQs
Unsurprisingly, Gen Z has the lowest average net worth of any generation. As they are just getting started on their careers and haven't had much time to accumulate wealth, this makes perfect sense. According to the Federal Reserve, individuals under the age of 35 have a median net worth of around $39,000.
How is Gen Z with money? ›
Gen Zers are having a harder time making ends meet, let alone building wealth. Roughly 38% of Generation Z adults and millennials believe they face more difficulty feeling financially secure than their parents did at the same age, largely due to the economy, according to a recent Bankrate report.
What generation are the parents of Gen Z? ›
Generation Z has been primarily raised by Generation X. But not me. My parents were born toward the end of the baby boomer years and had me, a Gen Zer, when they were both 43. It wasn't until I was older that I truly understood the age difference between my parents and those of my classmates.
Does Gen Z still live with their parents? ›
However, Gen Zers are also less likely to own a home, be married or have children. Additionally, about one-third still live with their parents.
Is Gen Z the richest generation? ›
The shift will see $90 trillion of assets move between generations in the U.S. alone, making affluent millennials “the richest generation in history” by Knight Frank's estimation. Separate figures show that Gen Z is set to cash in too.
Will Gen Z be wealthy? ›
Gen Z, the youngest generational cohort, recorded nearly $6 trillion in financial wealth—up from $2 trillion in 2019. While all generations saw their wealth increase, Millennials and Gen Zers in particular were aided by large increases in ownership of both stocks and retirement accounts.
Why is Gen Z struggling financially? ›
Gen Z faces unique financial challenges compared to older generations. College graduates earn 10% less compared to their parents, recent research found. High inflation — and affordability concerns among Gen Zers — extend beyond U.S. borders.
Are Gen Z financially minded? ›
According to recent data from a 2023 Pew Research Centre survey, Gen Z is more financially independent at a younger age than prior generations. While still in school, a sizeable proportion of Gen Zers work part-time, freelance, or have side hustles.
Is Gen Z generous? ›
Gen Z's Philanthropic Potential
The good news, however, is that this limitation doesn't deter them from contributing to causes they care about however they can. “[I]n 2022, Gen Z adults made an average of 5.3 donations — notably more than the 4.8 made by millennials and 4.7 made by Generation X.”
Is Gen Z aging faster? ›
April 18, 2024 – The explosive rise in skin care “influencers” hawking product after product on social media has led many young people to seek anti-aging products and procedures even as experts say there is no actual evidence that Gen Z is aging faster than normal.
Many of the theories online veer into the conspiratorial: One woman suggested that Gen Z looks older because the quality of food is getting worse, which results in faster wrinkles; another claimed that it's because food is getting better, and because millennials ate food with more preservatives in it than Gen Z, ...
What is Gen Z nickname? ›
A zoomer is, in the newest use of the word, a member of Generation Z, the generation of people born in the late 1990s and early 2000s. The zoomers follow the millennials (also known as Generation Y), who follow the Gen Xers, who follow the baby boomers.
Does Gen Z care about marriage? ›
The generation overwhelmingly said serious relationships were important to them. More than 40 percent are currently involved in serious relationships, while 27 percent are looking for one. And a clear majority, 93 percent, said they were interested in marriage if they weren't already in the process of getting married.
Is Gen Z monogamous? ›
Generation Z isn't convinced monogamy is the best relationship structure, and more than half of them are considering relationship styles long considered taboo in American culture.
Do Gen Z want babies? ›
Parenting is less important to Gen Z than any other generation. In today's society, the idea of having kids has become an increasingly complex decision, especially for Generation Z. The societal pressures toward starting a family and pursuing the so-called “standard” path of living have become less of a concern.
Which generation has the most wealth? ›
Boomers—born between 1946 and 1964—are currently the wealthiest generation on the planet.
Which generation has more wealth? ›
More Than Half of US Wealth Belongs to Baby Boomers: Will Other Generations Catch Up? Americans have roughly $156 trillion in assets, according to Visual Capitalist, but half of that wealth — $78.1 trillion — belongs to the baby boomers.
What generation has the most rich people? ›
U.S. wealth distribution 1990-2023, by generation
In the fourth quarter of 2023, 51.8 percent of the total wealth in the United States was owned by members of the baby boomer generation.
Is Gen Z financially stable? ›
While just over half of Gen Z (52%) feel confident that they're on track to meet their financial goals, fewer than half (48%) are fully or even mostly financially independent. However, Gen Z still feel able to handle everyday financial activities.
