Gen Z Is Outpacing Millennials In Their Careers, Here’s Why - Newsweek

Gen Z workers are entering the workforce under very different conditions than millennials did, and new data suggests that is paying off for many of them.

Despite lower labor force participation rates, Gen Z adults are earning more and facing lower unemployment than millennials experienced at the same age, according to a new labor market report from resume platform Zety.

This, in some ways, flips the narrative of Gen Z as a lazy generation on its head, experts say.

“Every generation remembers how hard we worked when we were young. We remember the long hours and the struggle. Somehow we’re a little less good at remembering all the complaining we did at 22,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek.

“Gen Z isn’t lazy. They’re different. They’re more willing to question whether the old bargain of ‘work hard, keep your head down and eventually you’ll be rewarded’ still makes sense.”

The new data challenges a common narrative that younger workers are falling behind previous generations economically.

While Gen Z has frequently been portrayed as struggling with high housing costs, student debt and an uncertain job market, the report suggests that those who are finding work are, on average, securing better wages and encountering fewer barriers to employment than millennials did in the mid-2000s.

Zety's Early Career Labor Market Report analyzed U.S. Bureau of Labor Statistics data covering adults ages 20 to 24 during two comparable periods: millennials from 2005 to 2008 and Gen Z from 2021 to 2024.

The report found that Gen Z workers earned substantially more than millennials did at the same age after adjusting for inflation. Median weekly earnings for full-time Gen Z workers averaged about $756, compared with $674 for Millennials, a difference of roughly 12.3 percent.

“One could argue that with fewer Gen Z workers participating in the traditional workforce, the lower supply of available workers means wages have to be a bit higher to attract them, thus leading to higher pay when adjusted for inflation,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.

At the same time, Gen Z experienced a lower unemployment rate. Among adults ages 20 to 24, unemployment averaged 7.5 percent between 2021 and 2024, compared with 8.9 percent for Millennials from 2005 to 2008, a gap of 1.4 percentage points.

“For years, we've heard a repeated stereotype from older Americans that Gen Z doesn't want to work, but this data suggests otherwise,” Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek.

Gen Z's advantage comes despite their lower overall workforce participation. The report found that Gen Z's labor force participation rate averaged 71.1 percent, compared with 74.5 percent for millennials at the same age. Gen Z’s employment-population ratio also trailed millennials, averaging 65.8 percent versus 67.9 percent.

This essentially means a smaller share of Gen Z is working or actively seeking work. But among those who do participate in the labor market, their outcomes tend to be better than millennials during their early careers, experts say.

“Gen Z has allowed themselves to fight back against lower-than-average wages and, in some cases, will accept going into debt or forgoing purchases rather than chasing materialism simply for the sake of it,” Thompson said.

“I don't think that means they are unmotivated. Their motivation just doesn't seem to be centered around money in the same way it may have been for previous generations.”

Several factors may explain the generational shift.

Unlike millennials, who entered the workforce during the run-up to the Great Recession, Gen Z benefited from a historically tight labor market in the years following the COVID-19 pandemic. Employers were facing persistent labor shortages across industries, giving younger workers greater leverage in hiring and wage negotiations.

“Some of that advantage reflects very different economic circumstances. Millennials entered adulthood around the Great Recession, while Gen Z benefited from a post-pandemic labor market that produced unusually strong wage growth,” Beene said.

“Gen Z isn't necessarily working harder or millennials less effectively. Young people are approaching a fundamentally different labor market, and those succeeding in it are doing considerably better financially than the familiar ‘lazy Gen Z’ narrative would suggest.”

Gen Z is also entering a workforce that increasingly values digital skills. Many members of the generation grew up using technology and social media, which may align well with employer demand.

At the same time, there are larger demographic changes in the workforce. As Baby Boomers retire, employers are competing for younger workers to fill vacancies, which creates more favorable conditions for those new to the workforce.

“Give any cohort of workers a tight market and they'll command, and get, higher pay. Hand them a recession and they'll spend a decade, or a lifetime, digging out,” HR consultant Bryan Driscoll told Newsweek. “The only variable that matters here is the balance of power between employers and workers, and employers spend billions doing everything they can to keep it tilted their way.”

The data findings do not necessarily mean Gen Z faces fewer economic challenges than millennials, experts say.

Many younger workers continue to grapple with soaring housing costs and higher living expenses. And affordability and career stability are major concerns for the younger generation, even when their wages are higher than previous generations' earnings after inflation.

However, based on the report, at least during the earliest stages of their careers, Gen Z workers are generally finding jobs more easily and earning more money than millennials did at the same age.

“Gen Z has lower unemployment among people participating in the labor force, but fewer young adults are participating or employed overall. So this isn’t a clean victory lap,” Ryan said.

“To me, the bigger lesson is that generations respond to the economy they’re handed. Millennials adapted to one labor market. Gen Z is adapting to another.”

The question now is whether Gen Z's early career advantage will persist.

A cooling labor market could make it harder for younger workers to maintain their gains, and advances in artificial intelligence may reshape entry-level employment opportunities in the coming years.

“I'm seeing the tide move,” Driscoll said. “The market is cooling and employers are clawing back, spending more on lobbying than what it would cost to just pay people more and cover benefits. What we're seeing is the reality of concessions, extracted under pressure, now retreating. Workers only keep what we can defend.”