Despite the somewhat arbitrariness of these generational age ranges, there is a certain culture and life philosophy that drives each generation to prioritize things differently than their predecessors.
Gen Z is no exception. In this post, we’ll define who exactly is Gen Z, why we care, and whether they’ve got it good or got it bad compared to the Boomers, Millennials, and everything in between.
Let’s first define Gen Z
Prior to getting the name Gen Z, several contenders including iGeneration, Post-Millennials, and Homelanders were considered, but ultimately Gen Z caught on. This was solidified by the fact that Google Trends showed the term Gen Z to be the most searched out of all the previous candidates.
Despite the simplicity in its name, Gen Z is a hard one to define. Contrary to popular belief, the generational definition isn’t static; it changes as we learn more and more about how our culture shifts over time. A traditional way of looking at generations is to consider each 20-year time period a generation of its own. However, it is severely lacking in its consideration of the events and struggles that usually define the people of a particular generation.
Millennials age range
In order to define an age range for Gen Z, we first have to look at what defines the age range for Millennials. According to Pew Research Center, Millennials include anyone whose lives have been shaped by:
- the 9/11 terrorist attacks
- the wars fought in Iraq and Afghanistan
- entering the workforce during and around the 2008 financial crisis
If we take that into account, the age range that defines Millennials is roughly between 26 and 41 years old (born anywhere from 1981 to 1996).
Gen Z age range
That helps shed some light into the cutoff point for Gen Z, which would start (or end) at 25 years of age. For Gen Z, the defining characteristic or shared commonality amongst them would be:
- an always-on tech world, as a commodity to Big Data
- racial and ethnic diversity, inclusivity
- entering the workforce during and around the COVID-19 pandemic
Taking these things into account, the age range that defines Gen Z is roughly between 10-25 years old (born anywhere from 1997 to 2012).
How do the economic conditions differ for Millennials and Gen Z?
There isn’t much debate that the Millennials and Gen Z grew into a less-than-ideal economic situation. Compared to the Baby Boomer generation, there is much more of a disconnect in terms of wages and cost of living. Real wages, which is defined as your wage after accounting for inflation, has been stagnant for the better part of the last two decades. In other words, purchasing power has declined significantly for the younger generations. Pensions and matching contributions to 401(k)s, which were a common occurrence of Baby Boomer job packages, are becoming increasingly non-existent in Millennial and Gen Z job packages.
Let’s take a deeper diver into the unique challenges Millennials face when it comes to economic outlook vs. Gen Z.
Millennial economic outlook
As Millennials were entering the workforce during and around the 2008 financial crisis, their economic outlook was grim mainly in terms of job prospects. If you were a Millennial and landed a job during that time, you would be ecstatic at your luck. Not everyone was so lucky, and professional growth was interrupted for many in the years to come.
However, one thing that Millennials can flaunt is the fact that they are the highest educated generation as of yet. But remember, with that education, they also accrued the most debt out of any generation.
Gen Z economic outlook
Gen Z was unlucky enough to have been hit by the pandemic during their debut into the workforce. They, just like Millennials, also had to deal with stagnant wages. However, a differentiating factor in the economic outlook between the two generations is the fact that Gen Z entered at a time of plentiful jobs, however crappy they may have been. At the moment, there are almost two jobs looking for each one person. And Gen Z knows how in-demand they are, as opposed to Millennials who practically begged for jobs.
That’s not to say that Gen Z has it easy. Not at all. As of the end of 2022, we’re looking into another possible recession looming over the horizon, one that will potentially be induced by the Fed themselves. That’s quite scary.
How much does the average Millennial make vs. the average Gen Z’er?
How much do Millennials make? Here are the stats:
- Millennial salary average is about $47k
- Millennial household income average is about $69k
- Millennial household income median is about $71k
This is quite impressive considering that Millennials were held back in terms of the 2008 recession taking a huge financial toll on them. According to the Young Invincibles, the 2008 financial crisis cost Millennials around $22k in earnings, which is significant when you consider that money could have been invested in one of the longest bull runs ever following the recession.
Gen Z income
Let’s compare that to Gen Z. Here are the stats:
- Gen Z salary average is about $32k
- In terms of Gen Z household income, it’s incomplete info at best considering that not too many 10- to 25-year-olds are heading households for income. Not to mention, fewer Gen Z’ers are getting married overall or are getting married later.
If you’re interested in seeing a breakdown of Gen Z salaries by state, check this post out.
How much debt does the average Millennial owe compared to Gen Z’ers?
Millennials have taken about 300% more student debt than their parents. The average student debt comes to around $38k. Let’s take a look at more stats:
- Millennial student debt averages $38k
- Millennial auto loan debt averages $19k
- Millennial personal loan debt averages $12k
- Millennial credit card debt averages $4k
Gen Z debt
Gen Z’ers have less student debt than Millennials thus far but seem to have the fastest rate of debt growth out of all generations. Let’s take a look at some stats:
- Gen Z’ers student debt averages $17k
- Gen Z’ers auto loan debt averages $15k
- Gen Z’ers personal loan debt averages $6k
- Gen Z’ers credit card debt averages $2k
Gen Z’ers have caught on that college tuition costs may be exorbitantly inflated and are smart to avoid taking on the same amount of debt as their predecessors. Also, as a trend, each generation seems to become more and more financially savvy, and that’s very true with Gen Z as a whole becoming more financially literate than all of the previous generations. With more and more people opting for community college for the first two years, and taking on many side hustles as soon as they can.
Get more information about student loan forgiveness here.
Gen Z wasn’t born into the best economic situation. However, as a generation, they are very promising for the future of our nation. They’ve learned from past generational mistakes, including learning to avoid massive amounts of debt and becoming more and more financially literate as a whole. On top of that, they’ve become more inclusive and have a way with being proactive in changing our current state of events.
Hopefully, we’ll see more of what Gen Z can do as they mature and tackle the numerous challenges that need fixing in this day and age.