Millennials are the first generation since 1950s to not have enjoyed higher disposable incomes. This setback was partly driven by the 2008 financial crisis, and the long stagnation in real wage growth since. But it seems there’s more for Millennials to gripe about when it comes to Gen Z. Turns out; Gen Z’s early careers are far more financially rewarding than those of Millennials when they first set foot in the corporate world.
A new report by the Resolution Foundation found that Gen Z workers are earning more in their early careers than any other generation going back to those born in the 1950s. At the age of 24, those born in the early 2000s, earned 12% more in real weekly pay than millennials born in the late 1990s.
Why Millennials fell behind
Millennials entered the workforce at a time when the world was shattered by the 2008 Financial Crisis. Their careers were left limping by years and years of weak wage growth and economic certainty that followed the next decade.
A report by the Resolution Foundation found that Gen Z workers are earning more in their early careers than any other generation going back to those born in the 1950s.
Charlie McCurdy, senior economist of 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.”
Gen Z’s pay gains come warning bells
This reversal of generational wage stagnation is largely driven by a tight labor market and steady minimum wage hikes. Today’s 24-year-olds are commanding the highest early-career pay for any cohort since the 1950s.
Economists, however, warn that Gen Z income gains could be threatened by high inflation, global economic volatility and rising unemployment rates due to artificial intelligence (AI).
Inflation and geopolitical tensions aside, housing affordability still remains a major challenge for this particular demographic. Higher earnings haven’t translated into wealth accumulation or homeownership.
The report also found that the lowest paid (those in the bottom 10% of earners) enjoyed the biggest hike in pay due to a rise in minimum wage, especially since 2016. Their gains rose by 36% in real terms between 2012 and 2025.
As for median earnings, those ages 22-29 saw their hourly pay increase by 15% over the same period compared to 4% for those in their 30s and 11% for all employees.
“For a significant share of younger members of gen Z, their careers have not got off the ground at all,” the Resolution Foundation added. “Britain’s Neet crisis presents a huge, long-term challenge for gen Z, and tackling it should be a top priority for the government.”
Gen Z still remains a bigger concern for HR leaders
Employers need to revisit and change their assumptions that Gen Z is far worse economically than millennials. It’s not too far-fetched to assume that strong starting salaries have raised Gen Z’s expectations around compensation and fulfilling careers. And perhaps, the bigger challenge may not be wages but the growing discontent from work and education.
Companies investing in internships, reskilling and entry-level opportunities need to level up to prevent long-term disengagement.
If Gen Z is outearning millennials, why do so many young workers today feel disconnected from the workplace? The answer may not lie in their paychecks, but in the widening gap earnings and the cost of building a fulfilling career.
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