Generation Z’s economic influence is growing. The country’s youngest cohort, which accounts for one-quarter of the U.S. population, has reached an estimated combined income of $1.1 trillion, leaving them with about $950 billion to spend after taxes. That compares with a combined income, including earnings from jobs, parental support and side hustles, of $360 billion just three years ago, according to a study released by research, training and advisory firm Gen Z Planet.
That is largely driven by the expanding presence of Gen Z workers in the full-time workforce. There are now 18.1 million full-time Gen Z employees, the report said. Part-time work also makes up a significant portion of income for younger Americans, with more than 9 million Gen Z workers in part-time jobs earning almost $107 billion in net income.
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“With more Gen Zers in the workforce, it’s no surprise this figure is growing fast,” said Hana Ben-Shabat, founder of Gen Z Planet. “But this big number tells only part of the story.”
The rest of the story is that many Gen Zers are having difficulty achieving financial independence. Forty-two percent of Gen Z adults still live with their parents, compared with 38% of millenials, 32% of Gen X and 29% of Baby Boomers who lived with their parents as young adults.
In addition, many Gen Zers are anxious about rising home prices, inflation and student loan debt. As a result, this generation is taking a more calculated approach to their finances, including saving, investing, purchasing cryptocurrency and digital assets, and even planning for retirement, the report said. They also tend to be value-driven shoppers and selective about where they spend money. Gen Z Planet noted that this generation of young Americans, roughly 16 to 26 years old, are highly optimistic and remarkably entrepreneurial.
While about 28% have sought financial advice from traditional financial institutions or professional advisors, most rely instead on family, friends and social media influencers for guidance, the report found. The number of Gen Zers who rely on TikTok, Reddit, podcasts and online courses for financial guidance is significant, said Gen Z Planet.
“This unprecedented access to financial information and advice allows Gen Zers to access diverse perspectives and strategies to enhance their knowledge and increase their return on investments,” said the report. “A growing number are now investing in the stock market (32% compared to 26% in our 2021 survey), and an impressive 16% are already preparing for retirement.”
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