‘I cannot afford to live’: Gen Z is full of financial angst despite inheriting a golden job market
CNN
Analysis by Allison Morrow, CNN
New York (CNN) — Gen Z is coming into the workforce and — in one of the grand traditions of what Millennials cringe-ily called “adulting” — they’re complaining about how much easier older generations had it.
Before all the Boomers and Slackers throw their tablets across the room, let me note that Gen Zers — folks born between the late 1990s and early 2010s — are entering adulthood during one of strongest job markets in US history. Compared with Millennials, especially, who entered the workforce in 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 that anybody can remember,” Brendan Duke, senior director for economic policy at the Center for American Progress, tells me. Their wages have gone up faster than inflation overall, and more quickly than any other age cohort, he added.
See here: Last year, the unemployment rate for 16-to-24-year-olds was 7.9% — the lowest it’s been since 1953, and far better than the — wait for it — 18.4% unemployment rate for that age group in 2010, coming out of the recession.
But Gen Z isn’t having an easy go of it either.
Like all of us (hi, elder Millennial here), they’re struggling with an onslaught of inflation that pushed prices rapidly higher over the past three years. The essentials have been particularly expensive: Food prices surged during the pandemic, and companies haven’t been shy about keeping them elevated even as supply chains recovered. Shelter costs ballooned when the Federal Reserve jacked up interest rates, leading Boomers (or anyone with a less-than-3% mortgage) to stay in the homes they might otherwise have downsized out of. We can’t seem to build homes fast enough to meet demand. It’s a mess.
“Housing is a huge challenge for younger workers,” Duke said. “I think that’s the part of the economy where we’ve seen the least progress when it comes to bringing down inflation, and that’s the part of the economy where younger workers bear the brunt.”
Surviving inflation gets a lot easier if you own property. Homeowners can take out equity loans, or count on getting a chunk of change when they sell. Gen Z hasn’t had a chance to get a foot in the door.
It’s important to remember, Duke tells me, that younger workers are always starting out at a disadvantage when they enter the workforce. You start at an entry level wage, gain experience, and, typically, you see your wages go up. Of course, the long view is little comfort when you’re 23 and slurping bodega ramen with your six roommates.
‘I can’t afford to live’
One giant difference between now and any other moment in history: Gen Z is entering adulthood armed with a menagerie of social platforms where they can publicly broadcast their financial angst, or, conversely, gawk at peers who are having a better time thanks to generational wealth.
Last week, a TikTok user posted an angry rant about the cost of living that’s since been viewed 5 million times on the platform, with tens of thousands of comments and shares.
“I make over three times the federal minimum wage and I cannot afford to live,” he shouts into the camera. “It is embarrassing to come out and say that it is a struggle to survive right now but I know so many people are struggling.”
Later, he concludes: “The American Dream is dead.”
Like much of the financial analysis on TikTok, the video goes a little off the rails. But the anger and despair point to a real and growing ennui that’s taken root among younger people.
Gen Zers are reporting 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 out medical care for those conditions because behavioral health care is too expensive. “Many Gen Zers also indicated their first step in managing behavioral-health challenges was going to TikTok or Reddit for advice,” the report said.
It’s hard to blame them: Many in Gen Z had their formative school years blown up by a global pandemic. Now the oldest ones are grappling with an adulthood that may not permit them the benefits of homeownership, a comfortable income or a stable climate.
That fatalism is particularly problematic when it comes to inflation, which becomes harder to fight when consumers expect prices to keep running hot. A recent Bloomberg analysis based on UK data found that inflation expectations among people 16 to 24 have risen more than any other age group since the pandemic — a fact that researchers said can have a scarring effect.
Millennials turn things around
It’s not exactly sunny in Millennial-ville: We’re running up huge piles of debt, and many share the feeling the American Dream is out of reach.
But distressed Gen Zers can take a bit of solace from the Millennial experience.
Many of us had no job prospects to speak of straight out of college, and slogged through 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 flocked to graduate school, taking on even more debt that’s become a massive drag on economic mobility. (That’s another benefit of a strong labor market, Duke notes: You end up with fewer hapless young people taking on grad school debt that’ll come back to haunt them.)
It took a long time, but Millennials have, in some ways, caught up. We’re outpacing Gen X in retirement savings as of 2022, according to Charles Schwab. And, since 2019, workers under the age of 40 saw wages go up 14% on average.
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