The Struggles Of Generation Z

While every generation faces unique challenges, Generation Z (born between 1997 and 2012) has grown up in an economic landscape that in many ways seems set against them. From skyrocketing house prices to a precarious job market, the dream of stability and prosperity is slipping out of reach for many young adults today. Below, we explore the factors contributing to the housing and employment hurdles faced by this generation.

House prices have soared beyond affordability

One of the most striking economic barriers for Generation Z is the astronomical rise in house prices. Over the last two decades, house prices in many countries have surged at rates far outpacing wage growth. For instance, in the UK, the average house price has increased by over 200% since 1999, while average wages have barely doubled.

What has caused this sharp increase? A combination of factors, including low-interest rates, restricted housing supply, and high demand from buy-to-let landlords, has driven house prices to record highs. For many Gen Z individuals, even basic homeownership feels unattainable, especially when weighed against the rising costs of rent and living expenses for those looking to save for a deposit.

Student debt is a crushing burden

Another financial weight Gen Z must bear is the growing burden of student debt. With more young people attending university than in previous generations, education costs have climbed steadily. Tuition fees in countries such as the UK and the US place young adults at a financial disadvantage from the moment they graduate.

High student debt leaves less disposable income for saving and investing, creating barriers to meeting even short-term financial goals, like renting their first flat, much less saving for a home. The dual challenge of high house prices and escalating student loans has profoundly impacted Gen Z's ability to invest in their futures.

The employment market is more competitive, yet precarious

Although Generation Z is one of the most educated cohorts in history, landing well-paying, secure jobs is no longer as straightforward as it was for earlier generations. While technology and globalisation have created new industries, they have also led to increased competition for roles, as well as a shift towards lower pay and job insecurity.

Entry-level positions often pay less in inflation-adjusted income than similar roles did for Gen X or Baby Boomers. Additionally, many young professionals are forced to take short-term contracts, internships, or gigs offering little by way of stability. Coupled with rising living costs, Gen Z workers frequently find themselves earning less relative to the resources they need to get ahead.

The pandemic further worsened their prospects

The COVID-19 pandemic has exacerbated existing inequalities for Generation Z. Lockdowns and economic slowdowns disproportionately affected industries that typically employ young workers, such as hospitality, retail, and entertainment. These sectors saw massive job losses, leaving many without income during key formative years.

Beyond immediate effects, the long-term implications of this disruption are concerning. Research shows that entering the labour market during a recession can have lasting impacts on lifetime earnings and career progression. For Generation Z, the pandemic’s economic scars may persist for years to come.

Rising inflation and stagnant wages compound challenges

Inflation has made matters worse for today’s young adults. From groceries to energy bills, nearly every aspect of living costs has increased—often dramatically. At the same time, wage stagnation has limited their purchasing power. This growing gap between expenses and income has placed immense financial strain on Gen Z, many of whom already face higher debt loads relative to previous generations.

Efforts to save money are routinely undermined by unexpected bills and rising inflation, making it particularly difficult to build the security necessary for long-term planning, whether it’s buying a home, starting a family, or investing in a retirement fund.

What needs to change?

Addressing these economic challenges will require meaningful policy interventions and societal shifts. Building more affordable housing, implementing fairer taxation systems, restructuring student debt, and raising wages in line with living costs are all steps that governments and industries must prioritise to ease the burden on Generation Z.

While this generation has displayed remarkable resilience and adaptability, their ability to thrive should not come at the cost of enduring systemic inequalities. Without significant changes, Generation Z risks becoming the first generation in modern history to be worse off financially than their parents.

The road ahead is difficult, but by understanding these issues and advocating for change, perhaps we can build a fairer economy with opportunities for everyone.