Today’s young people are doing better than ever in terms of employment and wages, so why don’t they feel that way? And why do they still depend on the Bank of Mom and Dad? That’s the question raised by a new study from the Pew Research Center, which raises the enigma of Generation Z, which is better off financially, but still faces difficulties.
Data shows that Gen Z is doing much better than young people in the 1990s when it comes to wages, and since Gen X was largely responsible for the creation of Gen Z, this means that many children are outperforming their parents . In 2023, for example, the average salary for a person between the ages of 18 and 24 was about $20,000, compared to $15,462 in 1993, adjusting for inflation. And those between the ages of 25 and 29 earn nearly $10,000 more than young adults did 30 years ago.
As more women enter the workforce, employment numbers for young people in the US have also increased. About 70% of adults ages 25 to 29 had a full-time job in 2023, compared with 65% three decades ago, according to Pew.
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Gen Z may appear to be doing just fine on paper, with better wages thanks to higher levels of education and a tendency to change jobs, but they still say they are struggling to keep up as they face widely publicized mental health issues, while at the same time as it popularizes the discourse on the importance of the topic, especially in the workplace.
The Pew data suggests there’s a simple economic aspect behind this: While wages are higher, many young people are being held back by higher costs that didn’t affect previous generations as drastically — and that’s hitting right at the age when reach certain milestones in life. Simply put, it’s disheartening for Gen Z to not be able to afford aspects of normal life like their parents did.
Indebted for longer, getting married later
Less than half of adults in their 25s had outstanding student loans in 2023, compared to just under a third in 1993. The average amount of debt has also jumped from four to five figures as the cost of college has become increasingly increasingly inaccessible to some. Still, college enrollment increased last year for the first time in a decade.
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In recent years, the Fed’s interest rate hikes have helped push Gen Z out of the housing market, but rising prices have also contributed. And those young adults who do buy a home are saddled with higher mortgage debt than previous generations — although a recent Redfin study found that Gen Z is struggling to reverse that, with a surprisingly high homeownership rate in compared to previous generations, even baby boomers.
Adjusted for inflation, an 18- to 24-year-old in 2022 had an average mortgage debt of $117,000, compared with $39,367 for those in the same bracket in 1992, according to Pew. The same trend applies to those ages 25 to 29, who had average adjusted mortgage debt about $60,000 higher than their peers in the 1990s.
Consequently, many young adults have postponed major life events that used to define adulthood, such as moving out of their parents’ home and getting married. The study found that 57 percent of adults ages 18 to 24 lived with their parents, compared to 53 percent in 1993. The pattern holds true for slightly older adults in their 20s.
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The average age for getting married and having children has also increased, following the trend in other developed nations. While in 1993 half of adults in their 25s were married, less than a third were in that situation last year, and even fewer had children.
