Stop complaining, Zoomers – you’re rich

In 2012-14, more than half of Spanish youngsters who wanted a job could not find one. Greece’s youth unemployment rate was even higher. Britney Spears’ Work Bitch, a popular song released in 2013, had an uncompromising message for young Millennials: if you want good things, you have to slog.

Best since 1991

Gen Z-ers who have left education face very different circumstances. Youth unemployment across the rich world – about 13 per cent – has not been this low since 1991. Greece’s youth unemployment rate has fallen by half from its peak. Hoteliers in Kalamata, a tourist destination, complain about a labour shortage, something unthinkable just a few years ago. Popular songs reflect the zeitgeist.

In 2022, the protagonist in a Beyonce song boasted, “I just quit my job”. Olivia Rodrigo, a 21-year-old singer popular with American Gen Z-ers, complains that a former love interest’s career “is really taking off”.

Many have chosen to study subjects that help them find work. In Britain and America, Gen Z-ers are avoiding the humanities, and are going instead for more obviously useful things like economics and engineering. Vocational qualifications are also increasingly popular. Young people then go on to benefit from tight labour markets. Like Beyonce’s protagonist, they can quit their job and find another one if they want more money.

In America, hourly pay growth among 16 to 24-year-olds recently hit 13 per cent year-on-year, compared with 6 per cent for workers aged 25 to 54. This was the highest “young person premium” since reliable data began.

In Britain, where youth pay is measured differently, the average hourly pay of people aged 18 to 21 rose by an astonishing 15 per cent last year, outstripping pay rises among other age groups by an unusually wide margin. In New Zealand, the average hourly pay of people aged 20 to 24 increased by 10 per cent, compared with an average of 6 per cent.

Strong wage growth boosts family incomes. A paper by Kevin Corinth of the American Enterprise Institute, and Jeff Larrimore of the US Federal Reserve, assesses Americans’ household income by generation after accounting for taxes, government transfers and inflation.

Millennials were somewhat better off than Gen X – those born between 1965 and 1980 – when they were the same age. Zoomers, however, are much better off than Millennials were at the same age. The typical 25-year-old Gen Z-er has an annual household income of more than $US40,000 ($61,900), more than 50 per cent above Baby Boomers at the same age.

Gen Z’s economic power was on display at a recent concert by Rodrigo in New York. The mostly female teenagers and 20-somethings in attendance had paid hundreds of dollars for a ticket. Queues for merchandise stalls, selling $US50 T-shirts, stretched around the arena.

Rodrigo will have no trouble shifting merchandise in other parts of the world as her tour moves across the Atlantic. That is in part because Gen Z-ers who have entered the workplace are earning good money.

In 2007, the average net income of French people aged 16 to 24 was 87 per cent of the overall average. Now it is equal to 92 per cent. In a few places, including Croatia and Slovenia, Gen Z-ers are now bringing in as much as the average.

Some Gen Z-ers protest, claiming that higher incomes are a mirage because they do not account for the exploding cost of college and housing. After all, global house prices are near record highs, and graduates have more debt than before.

In reality, though, Gen Z-ers are coping because they earn so much. In 2022, Americans under 25 spent 43 per cent of their post-tax income on housing and education, including interest on debt from college – slightly below the average for under-25s from 1989 to 2019. Bolstered by high incomes, American Zoomers’ home ownership rates are higher than Millennials’ at the same age (even if they are lower than previous generations).

‘Girlbosses’

What does this wealth mean? It can seem as if Millennials grew up thinking a job was a privilege, and acted accordingly. They are deferential to bosses and eager to please. Zoomers, by contrast, have grown up believing that a job is basically a right, meaning they have a different attitude to work.

Last year, Gen Z-ers boasted about “quiet quitting”, where they put in just enough effort not to be fired. Others talk of “bare minimum Monday”. The “girlboss” archetype, who seeks to wrestle corporate control away from domineering men, appeals to Millennial women. Gen Z ones are more likely to discuss the idea of being “snail girls”, who take things slowly and prioritise self care.

The data support the memes. In 2022, Americans aged between 15 and 24 spent 25 per cent less time on “working and work-related activities” than in 2007. A paper published by the IMF analyses the number of hours that people say they would like to work. Not long ago, young people wanted to work a lot more than older people. Now, they want to work less. According to analysis by Jean Twenge, of San Diego State University, the share of American 12th-graders (aged 17 or 18) who see work as a “central part of life” has dropped sharply.

Another consequence is that Gen Z-ers are less likely to be entrepreneurs. We estimate that just 1.1 per cent of 20-somethings in the EU run a business that employs someone else – and in recent years the share has drifted down.

In the late 2000s, more than 1 per cent of the world’s billionaires, as measured by Forbes, a magazine, were Millennials. Pundits obsessed over ultra-young tech founders such as Mark Zuckerberg (Facebook), Patrick Collison (Stripe) and Evan Spiegel (Snapchat). Today, by contrast, less than 0.5 per cent on the Forbes list are Zoomers. Who can name a famous Gen Z start-up founder?

Gen Z-ers are also producing fewer innovations. According to Russell Funk, of the University of Minnesota, young people are less likely to file patents than they were in the recent past. Or consider the Billboard Hot 100, measuring America’s most popular songs. In 2008, 42 per cent of hits were sung by Millennials; 15 years later, only 29 per cent were sung by Gen Z-ers. Taylor Swift, the world’s most popular singer-songwriter, titled her most famous album 1989, after the year of her birth.

How long will Generation Z’s economic advantage last? A recession would hit young people harder than others, as recessions always do. Artificial intelligence could destabilise the global economy, even if youngsters may in time be better placed to benefit from the disruption.

For now, though, Generation Z has a lot to be happy about. Between numbers at Madison Square Garden, Olivia Rodrigo sits at the piano and counsels her fans to be thankful for all that they have. “Growing up is f---ing awesome,” she says. “You have all the time to do all the things you want to do.” The time and the money.

The Economist