Navigating Financial Struggles: Gen Z's Dilemma in a Booming Job Market

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Gen Z is starting to join the workforce and, following the trend of what Millennials referred to as “adulting,” they are expressing their frustration about how much simpler older generations had it.

Before we jump to conclusions, it's important to acknowledge that Gen Zers, born between the late 1990s and early 2010s, are coming of age in a robust job market in the US. Unlike Millennials who faced the challenges of the Great Recession, Gen Z is entering the workforce during a time of prosperity.

According to Brendan Duke, senior director for economic policy at the Center for American Progress, this is the strongest economy for young workers in recent memory. Gen Zers have seen their wages rise faster than inflation, outpacing other age groups.

Last year, the unemployment rate for 16-to-24-year-olds hit a record low of 7.9%, the best since 1953. This is a huge improvement compared to the high unemployment rate of 18.4% for the same age group back in 2010 during the recession.

However, despite the positive trend, Gen Z is still facing challenges in the job market.

Struggling with an onslaught of inflation that has caused prices to rapidly increase over the past three years is a common issue for many, including us elder Millennials. The cost of essentials, such as food, has sharply risen during the pandemic, and companies have not hesitated to keep prices high even as supply chains have recovered. Additionally, shelter costs have increased significantly due to the Federal Reserve raising interest rates, causing Boomers and others with low mortgage rates to stay in their current homes instead of downsizing. The demand for new homes is high, but construction is unable to keep up, creating a challenging situation.

According to Duke, housing presents a major challenge for younger workers in the economy. Progress in reducing inflation has been slow in this sector, and younger workers are the ones most affected by it. This highlights the ongoing struggle that younger generations face when it comes to finding affordable housing in today's market.

Surviving inflation is easier for property owners. They can take out equity loans or make a profit when they sell. However, Gen Z has not had the opportunity to enter the property market yet.

According to Duke, it is important to recognize that younger employees always start at a disadvantage in the workforce. Starting with an entry-level wage, gaining experience, and eventually seeing an increase in wages is the typical trajectory. However, this may offer little comfort when you are 23 years old and sharing bodega ramen with six roommates.

Young people today have a unique advantage compared to those in the past: they have access to various social media platforms where they can share their financial struggles or envy others who are enjoying a better lifestyle due to family wealth.

Last week, a TikTok user shared a video expressing frustration about the high cost of living. The video has gained significant attention, with 5 million views, along with tens of thousands of comments and shares.

In the video, the user, who makes more than three times the federal minimum wage, talks about how difficult it is to afford basic necessities. He emphasizes that it is tough to admit to struggling to survive, but he knows many others are facing similar challenges.

He later expresses his belief that "The American Dream is no longer achievable."

The video, like many financial analyses on TikTok, veers off track a bit. However, the frustration and hopelessness expressed in the video highlight a genuine and increasing sense of disillusionment among younger individuals.

Gen Zers are experiencing higher levels of anxiety, depression, and distress compared to other age groups, as highlighted in a recent 2022 McKinsey study. The study also revealed that Gen Z is the least likely to seek medical help for these issues due to the high cost of behavioral health care. Interestingly, many Gen Zers turn to platforms like TikTok or Reddit for advice on managing their behavioral health challenges.

It's understandable why Gen Zers feel this way. The generation had their schooling disrupted by a global pandemic, which has had a lasting impact on their formative years. Now, the oldest members of Gen Z are facing challenges in achieving milestones like homeownership, financial stability, and a secure climate in their adult lives.

Inflation can be difficult to control when consumers believe prices will continue to rise. Recent data from the UK shows that inflation expectations have increased the most among young people aged 16 to 24 since the pandemic. Researchers warn that this trend could have long-lasting effects.

Millennials are changing the game by being more proactive in managing their finances and investing wisely.

Millennials are facing financial challenges with increasing debt and a sense that the American Dream is hard to achieve. However, Gen Zers can find some comfort in seeing how Millennials have dealt with similar struggles.

After college, many of us struggled to find job opportunities and faced stagnant wages for a decade. Some Millennials were criticized by older generations for living at home and spending money on avocado toast. Others turned to graduate school, accumulating even more debt that hinders economic progress.

Despite the challenges, Millennials have made progress in various aspects. According to Charles Schwab, we are now ahead of Gen X in retirement savings as of 2022. Additionally, since 2019, workers under 40 have experienced a 14% increase in wages on average.

Editor's P/S:

The article highlights the challenges faced by Gen Z as they enter the workforce, despite the robust job market. While they are experiencing higher wages than Millennials, they are also struggling with inflation and housing costs. The pandemic has further disrupted their formative years, leading to increased anxiety and depression. Gen Zers are using social media platforms to express their frustrations and seek advice on managing their financial struggles.

It is important to recognize that younger generations always face challenges when entering the workforce. However, the challenges faced by Gen Z are unique and significant. Inflation, housing costs, and the lasting impact of the pandemic are creating a sense of disillusionment among younger individuals. It is crucial to provide support and guidance to Gen Z as they navigate these challenges and work towards achieving their financial goals.