Are Gen Z wealthier than millennials?
Despite their reputation for being plagued by anxiety, depression and other mental health disorders, data show that Gen Z or Zoomers, born from 1997 to 2012, and who make up the majority of the workforce around the world today, are—surprisingly—financially wealthier than previous generations at the same age.
Citing findings by Kevin Corinth of the American Enterprise Institute and Jeff Larrimore of the US Federal Reserve, The Economist states: “Millennials [born from 1981 to 1996] were somewhat better off than Gex X [born from 1965 to 1980] when they were the same age. Zoomers, however, are much better off than millennials were at the same age. The average 25-year-old Gen Zer has an annual household income of over US$40,000, more than 50 percent above the average baby boomer [born from 1945 to 1964].”
Current global wages reflect this upward trend. “In America, hourly pay growth among 15- to 24-year-olds recently hit 13 percent year on year, compared with 6 percent for workers aged 25 to 54,” reports The Economist.
“This was the highest ‘young person premium’ since reliable data began [in the US]. In Britain … in 2023, people aged 18 to 21 saw average hourly pay rise by an astonishing 15 percent, outstripping pay rises among other ages by an unusually wide margin. In New Zealand, the average hourly pay of people aged 20 to 24 increased by 10 per cent, compared with an average of 6 percent,” it adds.
It is often believed that Gen Z in the US are hurting disproportionately, due to the undue burden of college debt and soaring housing prices that make good homes out of reach of young people.
On the contrary, The Economist rattles off these figures: “In 2022, Americans under 25 spent 43 percent of their post-tax income on housing and education, including interest on debt from college—slightly below the average for under-25s from 1989 to 2019. Their home ownership rates are higher than millennials at the same age. They also save more post-tax income than young people did in the 1980s and 1990s. They are, in other words, better off.
Article continues after this advertisementCaveat: Filipino surveys of Gen Z show that young people generally do not feel financially secure, though those who went to Taylor Swift’s concerts, shelling out hefty ticket prices, airfare and accommodation, were mostly Gen Z. We need more accurate studies that measure the actual wealth of Zoomers versus previous generations—rather than surveys on what people feel.
Article continues after this advertisementGlobal findings appear to bolster popular generational tropes. Many millennials started their careers in the precarious years of the late 2000s, when the world was hit by the financial crisis. They found it hard to get high-paying jobs, so they generally were deferential to the higher-ups and took great care to please them.
However, instead of viewing a job as a privilege, Gen Z treats it as a right. “Quiet quitting” and “bare-minimum Monday” became Gen Z catchphrases. The Economist cites data that “support the memes,” such as a paper from the International Monetary Fund on young people’s working hours.
“In 2022, Americans aged between 15 and 24 spent 25 percent less time on ‘working and work-related activities’ than in 2007 … Not long ago, young people wanted to work a lot more than older people. Now they want to work less. According to an analysis by Jean Twenge of San Diego State University, the share of American 12th-graders who see work as a ‘central part of life’ has dropped sharply.”
Fewer Gen Z are likely to become entrepreneurs or innovators. According to Russell Funk of the University of Minnesota, youngsters today do not file as many patents as before. The Economist predicts that barely one percent of those in their 20s in the European Union will create their own business. The Forbes richest people list also reveals similar findings. In the not-too-recent past, more than one percent on the list were millennials, such as Mark Zuckerberg of Meta and Evan Spiegel of Snapchat. These days, less than half a percent on the list are Gen Z.
“Who can name a famous Gen Z start-up founder?” The Economist asks. Or even a famous songwriter. Taylor Swift is a millennial, and in 2008, 42 percent of hits on the Billboard 100 were sung by millennials. In 2023, only 29 percent of hits were done by Gen Z
Disruptions due to political conflict, artificial intelligence, a climate change can disturb Gen Z’s financial advantages. But notwithstanding their constant anxiety and fear of taking risks, “for now, though,” concludes The Economist, “Gen Z has a lot to be happy about.”
Queena N. Lee-Chua is on the Board of Directors of Ateneo’s Family Business Center. Get her print book “All in the Family Business” at Lazada or Shopee, or e-book at Amazon, Google Play, Apple iBooks. Contact the author at [email protected].
