The current generation of the United States is experiencing a salary lifestyle in their early twenties – spending a lot on high rent and eating instant noodles of 99 cents. However, in just a decade, young Americans will be the most powerful economic force.
Just two years ago, US generation had accumulated $ 9 trillion in income, but by 2030 this number is expected to jump to $ 36 trillion. And until 2040, it should reach $ 74 trillion. A recent Bank of America report shows that this will put them as the richest generation – and the largest – by 2035, as this generation should represent 30% of the global population in the next decade.
Generation Z’s projected economic domain may seem far from its current situation. But there may be a light at the end of the tunnel as they rise in their careers and receive family inheritance.
Current Economic Difficulties of Generation Z in the US: No Home and No Children
Many young Americans have little money, leaving college directly to an uncertain job market. US generation members are refusing job opportunities because they cannot afford transportation costs. They are spooping their pets instead of having children, who have become too expensive to raise, and abandoning the dream of buying a house – unless they receive an inheritance.
They also face difficulties in maintaining a job. Young families receiving unemployment insurance increased by 32% in February, in the annual comparison, according to the report. But this is not due to the lack of effort, despite the critics.
The report states that these young people are “over -educated and underemployed”, and amid a difficult market for white collar professionals, unemployment among those who are now entering more than 9% in February. This leads to US generation to accept work for which they are superqualified or inadequate, which may have long -term career impacts.
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But in just 10 years, all this can change. Bank of America’s report notes that US generation salaries grew by 8% in February in the annual comparison. Part of this increase is due to the entry of this generation in the full -time job market, which leads to higher wages. But the biggest factor behind the financial increase is the great transfer of wealth, expected to reach generation Z bank accounts in the coming years.
The great transfer of wealth to the Z generation pockets
With the chances against them, the best bet of US young people to live comfortably is to inherit wealth.
It is estimated that about $ 84 trillion will be transferred from elderly and baby boomers to generation X, Millennials and Generation Z by 2045, according to a 2021 report from Cerulli Associates. Most money will go to generation X and millennials – but 38% of generation Z still believes it will receive an inheritance, according to another survey.
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The US Generation S slice, coupled with the significant increase in their salaries, will lead to explosive growth of their economic power. Even today, this generation is already a force to be considered. They have higher discretionary consumption habits than other generations, and their global expense is expected to reach $ 12.6 trillion by 2030, compared to $ 2.7 trillion in 2024. The growth of generation Z home spending also surpasses that of the general population, both essential and superfluous items, according to the report.
There are some reasons for generation Z to spend so much: they invest in high rents and education; They “spend the apocalypse” on essential items and small luxuries, rather than saving for larger investments that seem unreachable; and try to escape credit card debts and student loans.
But companies should pay attention: as soon as the US generation young people have money left, they will be in charge of the economy. Companies are already observing their preferences: luxury, e-commerce, well-being and beauty, and pets. This generation is also strongly involved with fintechs, new media, games and Big Tech, according to the Bank of America report. Your tastes will define which businesses will prosper in 2035.
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“Most likely they are among the most disruptive generations for economies, markets and social systems,” the report says. “Whether due to food changes, a reduction in alcohol consumption or new savings and housing standards, generation Z will redefine what it means to be a US consumer.”
