A Generation Deferred?
Gen Z and Economic Milestones
Author: Kelsey Matzinger
Financial Literacy
Published:
Thursday, 22 Feb 2024
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Image caption: Escalating costs of housing, education, and healthcare, coupled with student loan debt, paint a challenging picture for young adults entering the workforce.
Every generation faces its unique set of challenges and hurdles on the path to economic stability and personal fulfillment. From the Greatest Generation's resilience through the Great Depression and World War II to Millennials weathering the storm of 9/11 and the 2008 financial crisis, each cohort navigates its own economic landscape. Today, as Generation Z comes of age, they confront a world shaped by the aftermath of the COVID-19 pandemic, technological advancements, and evolving societal norms.
Economic Milestones: A Generation Deferred?
Throughout history, economic milestones have marked significant achievements for each generation. However, for Generation Z, these milestones seem increasingly out of reach or delayed. Escalating costs of housing, education, and healthcare, coupled with skyrocketing student loan debt, paint a challenging picture for young adults entering the workforce. According to research from the Pew Research Center, today's 21-year-olds lag behind their Baby Boomer counterparts in terms of full-time employment and financial independence.
The "future of work" presents a paradigm shift for Generation Z, challenging traditional notions of career paths and job security. Remote work, the Great Resignation, and concerns over AI replacing human labor add to the uncertainty surrounding employment. Despite technological advancements, many Gen Z-ers find themselves questioning the value of work beyond mere financial sustenance.
Why Work Isn't Working for Many Gen Z-ers
Generation Z's transition into the workforce has been met with skepticism and challenges. Social isolation during the pandemic has hindered the development of interpersonal skills crucial for navigating professional environments according to research from Deloitte and PwC. Managers cite difficulties in working with Gen Z employees, attributing issues to a lack of motivation, distraction, and sensitivity. Moreover, many Gen Z-ers feel that their compensation is inadequate for maintaining a good quality of life, leading to concerns about job stability and financial security.
Dreams Deferred...or Denied?
Achieving financial milestones, such as homeownership and retirement, appears increasingly elusive for Generation Z. Pessimism regarding retirement and homeownership is widespread among young adults, fueled by job instability and financial insecurity. Rising healthcare costs, transportation expenses, and housing unaffordability further exacerbate concerns about the future. Economic realities, including inflated housing prices and mounting student loan debt, paint a bleak picture for Gen Z's financial prospects.
Our Response
Despite these challenges, there is hope for Generation Z's economic future. We at Junior Achievement (JA) aim to empower young people with financial literacy and career readiness skills. By providing education on budgeting, saving, and investing, JA equips students with the tools to navigate the economic landscape successfully. Collaborating with educational institutions and businesses, JA strives to ensure that young adults make informed choices that lead to greater career satisfaction and economic security.
What the Research Says
Our approach gives students the tools to increase their chances of achieving economic security as adults. Research results from Ipsos include:
- 73 percent of Junior Achievement Alumni who graduated college say they work in a field they studied in college. Research by the Federal Reserve Bank of New York shows only 27 percent of college graduates say the same.
- 69 percent of JA Alumni say they work in their “dream career.” Only 25 percent of Americans say the same, according to MidAmerica Nazarene College.
- 80 percent of JA Alumni say their careers are “extremely fulfilling.”
- 82 percent of JA Alumni agree they have a strong financial footing.
- 68 percent of JA Alumni between the ages of 18 and 29 say they are financially independent of their parents. According to the Pew Research Center, 30 percent of Americans in that age range say the same.
- The average age JA Alumni report paying off student loans is 30.
- JA Alumni report purchasing their first home at 29. The National Association of Realtors reports the average age Americans purchase their first home is 36.
Generation Z faces difficult challenges on the path to economic stability and fulfillment. However, Junior Achievement offers- hope by equipping young adults with the skills and knowledge needed to navigate the evolving economic landscape. By fostering financial literacy and career readiness, we can empower Generation Z to overcome obstacles and achieve their goals. As we look to the future, investing in the economic well-being of Generation Z is crucial for building a resilient and prosperous society.
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