Is Gen Z earning higher than millennials at same age?
What's the story
A recent study by the Resolution Foundation has revealed that Generation Z (Gen Z) workers born in the late 1990s are earning more at age 24 than any other cohort since those born in the 1950s. The research shows that these young professionals are witnessing a mini-rebound in their pay packets, unlike their millennial counterparts who faced economic challenges when entering the job market.
Economic hurdles
Millennials's pay predicament explained
The Resolution Foundation study highlights that millennials, those born between the early 1980s and mid-1990s, are the first generation not to have higher disposable incomes than their predecessors. This setback was partly driven by their careers kicking off at around the time of the 2008 financial crisis and the long stagnation in real wage growth that has taken place ever since.
Pay rise
Mini pay rebound for Gen Z
The latest numbers show that at age 24, those born in the late 1990s are earning 12% more than their peers born in the late 1980s. The study also found that at age 24, early 2000s-born workers are making more than any other generation since the 1950s. Charlie McCurdy, a senior economist at the Resolution Foundation, said this is a "mini pay rebound" for Gen Z after years of stagnation for millennials.
Wage boost
Pay rise for lowest-paid workers
The study also found that the lowest-paid workers, those in the bottom 10% of earners, have seen their pay rise by 36% in real terms between 2012 and 2025. This is largely due to an increase in minimum wage rates since 2016. For median-earning workers aged between 22 and 29 years, hourly pay has grown by a whopping 15% during this period.
Future concerns
Challenges ahead for Gen Z
Despite the positive trend, the Resolution Foundation warns that Gen Z's pay rebound could be jeopardized by rising prices and slower economic growth due to geopolitical tensions in the Middle East. The study also highlights a growing number of 16- to 24-year-olds who are not in employment, education or training (NEETs), which could pose a long-term challenge for this generation if not addressed by government intervention.