Workers born in the late 1990s and early 2000s are experiencing a pay boost, with earnings at age 24 surpassing those of millennials at the same age, according to fresh analysis from the Resolution Foundation. In some cases, these younger workers are earning more than any generation dating back to the 1950s.
Pay Recovery for Gen Z
The think tank's examination found that real weekly pay at age 24 for people born in the late 1990s stood 12% higher than for those born in the late 1980s. More remarkably, people born in the early 2000s are now earning more at age 24 than any equivalent age bracket spanning more than seven decades.
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. By age 25, Gen Z workers were earning more than anyone born since the 1950s were at that age."
Millennials vs. Gen Z
Millennials, typically classified as those born between the early 1980s and mid-1990s, became the first generation in contemporary history to fail to achieve higher disposable incomes than their parents. Their careers commenced during the 2008 financial crash and the extended period of stagnant wage growth that ensued. However, the Resolution Foundation stated that recently available data suggests Gen Z's early career trajectory has, thus far, proved more promising, benefiting from a modest recovery in pay following the economic damage caused by the financial crisis.
Threats to Progress
Nevertheless, the think tank cautioned that this improvement may be temporary. It noted that elevated energy prices and diminished economic growth connected to Middle East tensions threaten to trigger another period of household financial pressure, with real wage increases in the private sector already declining since last autumn.
There is also growing anxiety about the number of young people not in employment, education or training (NEETs). The figure for 16 to 24-year-olds in this category exceeded one million earlier this year, according to the Foundation, highlighting the difficulties facing a substantial proportion of younger Brits. Mr McCurdy said: "But this good news story for Gen Z is already threatened. For a start, the higher prices and weaker economic growth resulting from war in the Middle East are threatening a fresh squeeze on pay packets. Even more worryingly, a million 16-24 year olds are currently not in employment, education or training. Getting to grips with Britain's NEETs crisis is crucial for getting the careers of more Gen Z workers off the ground, and ensuring that they too can outperform their millennial predecessors when it comes to wages and wider living standards."
