Generation Z and Their Expectations – An Expert Deems the Claim ‘Very Bold’
Can Generation Z afford less than their parents, or do they simply have higher expectations? A political scientist provides insights.
Unlike in previous generations, where one parent often stayed home, many young families today rely on both parents working, yet still struggle to afford yearly family holidays. This has led to a perception that Generation Z cannot afford as much as their parents could.
However, this impression might be misleading. A financial analysis highlights that real median wages have increased significantly over the years. Between 1992 and 2022, real wages—the income workers have after adjusting for inflation—rose substantially. This suggests that the average household can afford more than it could in the early 1990s. Yet, the perception of affordability has shifted due to changes in what is considered a “normal” standard of living.
Generation Z and Their Expectations – A Bold Claim
Marius Busemeyer, a professor specialising in comparative political economy, believes this claim about Generation Z’s expectations is bold, especially when presented without nuance. He notes that while real wages have increased over the decades, it doesn’t necessarily mean people can afford significantly more.
Real wages tend to rise when economies grow. The critical question, however, is how much of the economic growth translates to increased wages and who benefits most from it. “Real wages stagnated for a long time and only rose gradually, despite consistent economic growth,” he explains. This means the benefits of economic growth haven’t always been evenly distributed.
Has the Situation for Workers Improved or Worsened?
While real wages have risen, the share of economic growth reaching workers has, in some ways, declined. The share of GDP allocated to wages and salaries, as opposed to capital gains, has decreased over the years. Furthermore, wage growth has disproportionately favoured higher-income groups, with modest gains for lower earners in recent years due to policy changes like minimum wage increases.
When examining living standards, some aspects of life today may seem more luxurious compared to the past. Dining out frequently or taking long-haul trips, for instance, have become more common. However, the cost of essential needs like housing has risen significantly. While the average person now lives in larger spaces, homeownership has become increasingly unattainable for many, with ownership rates declining steadily. Housing was much more affordable relative to income in the past, highlighting a key area where affordability has worsened over time.
Conclusion
Although Generation Z may appear to live in greater comfort compared to previous generations, this is often due to shifting societal standards and differing priorities. Rising housing costs and income inequality continue to shape the financial realities of younger generations, challenging the notion that they live in outright luxury.
