“By many metrics, Gen Z is doing better than past generations“
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According to an analysis from the US Federal Reserve, the median 25-year-old zoomer made over $40,000 a year in 2022, after inflation, taxes, and transfers are taken into account. That is 50 percent more than the typical boomer earned at the same age.
Wealth data tells a similar story. As of 2023, Americans born between 1990 and 1999 — in other words, young millennials and older zoomers — had a median net worth that was 39 percent higher (in inflation-adjusted terms) than previous generations boasted at the same age.
Likewise, the median wealth of Americans under 35 in 2022 was the highest on record.
Generation Z is doing well economically. AI could change that. | Vox
Vox is a publication that targets Gen Z (and some millennials) and much of its content creator workforce is Gen Z and is distributed through online channels targeted at Gen Z (TikTok, X, YouTube, podcasts). In other words, Vox is a Gen Z oriented publication.
Gen Z influencers often have little grasp of history which leads to incorrect conclusions: How to show you know nothing of history without saying you know nothing of history – Social Panic
Many people compare today to an imaginary past.
A simple illustration – in the 1960s and 1970s, new homes were, on average, half the size of today’s homes, and had 1/3d the square footage per occupant as today’s homes have. In the 1950s and 1960s, not only were homes small, but the typical home had 1 bathroom and a single car garage and was poorly insulated if insulated at all.
When they compare home costs from the 1960s to today, they leave out that the homes back then have little in common with today’s homes.
Today’s expectation is they should be able to buy a nice home – yet the US has mostly not built smaller starter homes for decades – that’s a big problem! Today, the average new home is 2400 sq ft with a 2-car garage, 2.5 to 3 baths, insulated 2×6 wall construction and triple paned windows.
Today’s homes are really expensive, in part, because they are much larger, are better constructed, and have many amenities that did not exist in the past. In 1970, less than 1 in 5 homes had a kitchen dishwasher, and nearly all of those were “portable” dishwashers that were wheeled over to the sink and hooked up temporarily, when washing dishes.
The expectation that the past was identical to today has led to the adoption of claims and falsehoods that are then used to launch intergenerational attacks. Nothing good comes from this. Unfortunately, some of this may be deliberate – the new socialist mayors of New York City and Seattle have both made generational claims and have used those claims to create intergenerational conflict to support their political choices (namely socialism and government control over much).
Social media becomes an amplifier as those who know nothing of history then share this widely on TikTok, IG and X.
Note – housing is the primary issue facing Gen Z. Home prices where I live are down -10% to -12% as prices are likely to regress to the long running average price curve. Obviously, you do not wish to have bought at the peak and then have to sell. We once had to do that and took about a -15% haircut when we had to move.
But market clearing prices go up and down over time.
The economy is not a steady state. Gen Z has only known low interest rates, which were historically atypical. They think 3 to 4% mortgage rates are normal – but they are not. But since it is all they have known, this leads to incorrect assumptions about the past – and Generation bashing.
Additionally, the government and public health’s response to Covid was an utter disaster. Since 2020, the M2 money supply has gone up by 42%. Blowing up the money supply leads to high inflation, which is what happened.
Homes, being a real asset, retain their value in terms of deflated dollars. Thus, it takes more deflated dollars to buy a home today. Further, since the The Great Recession of 2008-2010, home building in the US took a nosedive as we stopped building. This created a very difficult housing market for new buyers, especially. With prices potentially sliding, pricing may revert to the long running mean – we hope.
