Gen Z Faces Financial Anxiety Despite Strong Job Market

Gen Zers are facing financial anxiety despite entering one of the strongest job markets in U.S. history. Compared to those who entered the job market during the Great Recession or millennials who entered during a recession, Gen Zers have it easy on the surface, one might argue. However, it looks like these unsettling feelings may have a lot to do with the slow progress in house prices coming down.

Brendan Duke, senior director for economic policy at the Center for American Progress, said, “Housing is a huge challenge for younger workers. I think that’s the part of the economy where we’ve seen the least progress when it comes to bringing down inflation, and that’s the part of the economy where younger workers bear the brunt.”

Younger workers have had the benefit of their wages going up more rapidly than overall inflation and more quickly than other generations in the past. Duke said, “This is the best economy we’ve seen for younger workers that anybody can remember.”

In 2023, the unemployment rate for 16-to-24-year-olds dropped to 7.9%, marking its lowest level since 1953. This is a significant improvement from the 18.4% unemployment rate for the same age group in 2010 during the recession recovery period.

However, despite this improvement, Gen Z isn’t having a smooth ride either.

The younger demographic is grappling with a surge in inflation that has significantly escalated prices in the last three years. Essential items have become more costly, especially food, which saw a dramatic spike during the pandemic, with companies maintaining hiked-up prices even as supply chains recovered. Shelter costs rapidly shot up after interest rates increased by the Federal Reserve, leading to Boomers, or anyone with a mortgage rate under 3%, to stay in their homes instead of downsizing. The housing market struggles to match demand, leading to a problematic situation.

Property owners find it easier to navigate inflation by leveraging equity loans or expecting substantial returns when selling their properties. However, Gen Z is encountering challenges trying to enter the housing market altogether.

Regarding these issues, a TikTok user ranted frustration in a post last week on the cost of living. The video was viewed over 7 million times on the platform, with tens of thousands of comments and shares.

In the post, he screams into the camera, “I make over three times the federal minimum wage and I cannot afford to live. It is embarrassing to come out and say that it is a struggle to survive right now but I know so many people are struggling.”

The video ends with, “The American Dream is dead.”

Although the video goes slightly off track like many of the financial analyses on TikTok, the frustration and despair reflect a genuine and escalating sense of disappointment among younger individuals.

A 2022 McKinsey report revealed that Gen Zers are experiencing higher rates of depression, distress, and anxiety compared to other age groups. The study also brought to light that Gen Z is the least likely generation to seek medical care for these conditions due to financial concerns.

The report said, “Many Gen Zers also indicated their first step in managing behavioral-health challenges was going to TikTok or Reddit for advice from other young people, following therapists on Instagram, or downloading relevant apps.”