Gen Z's early careers are more financially rewarding than those of millennials, according to research by the Resolution Foundation. Those typically born between 1997 and 2012 are experiencing a mini-rebound in pay packets, in contrast to how the previous generation entered the job market.
Millennials' setbacks
Millennials – those born between the early 1980s and mid-1990s – are the first generation not to have enjoyed higher disposable incomes than previous generations, the thinktank found. This setback was partly driven by millennials' careers starting around the 2008 financial crisis and the long stagnation in real wage growth since.
Gen Z pay rebound
A preview of a report due on Thursday shows that real weekly pay at age 24 for those born in the late 1990s was 12% higher than for cohorts born in the late 1980s. At the same age, those born in the early 2000s are earning more than any other generation back to the 1950s.
Charlie McCurdy, senior economist at the Resolution Foundation, said: “The living standards stagnation of the millennial generation has been well documented over the past decade. Many have speculated that the breakdown of generational progress has continued for gen Z too. But with the oldest members of gen Z now several years into their working lives, the good news is that they’ve enjoyed a mini pay rebound.”
Minimum wage impact
The report found that the lowest-paid – those in the bottom 10% of earners – enjoyed the biggest lift in pay due to an escalation in the minimum wage, especially since 2016. Their pay rose 36% in real terms between 2012 and 2025. Further up the pay scale, workers aged 22-29 on median earnings saw hourly pay grow by 15% over the same period, compared to 4% for those in their 30s and 11% for all employees.
Threats to progress
The study cautioned that the “good news story for gen Z is already under threat”, as real wages may fall due to pressures including higher prices and weaker economic growth from the war in the Middle East. Additionally, the number of 16- to 24-year-olds not in employment, education or training (Neets) has reached about 1 million. Former Labour minister Alan Milburn warned last month that Britain risks a 25% rise in Neets to 1.25 million by the early 2030s without urgent government action.
The Resolution Foundation added: “For a significant share of younger members of gen Z, their careers have not got off the ground at all. Britain’s Neet crisis presents a huge, long-term challenge for gen Z, and tackling it should be a top priority for the government.”
