Gen Z enjoys pay rebound as earnings outstrip millennials

The early careers of people born from late 1990s onwards have got off to a better start than their millennial predecessors, new research has suggested.

The Resolution Foundation said its study showed the so-called Gen Z generation are experiencing a mini rebound in pay packets.

Millennials – those born between the early 1980s and mid-1990s – are the first generation not to have enjoyed higher disposable incomes than previous generations, according to the think tank.

This breakdown of generational progress has been driven in part by the careers of many millennials kicking off around the time of the great financial crisis and the long stagnation in real wage growth that has taken place ever since, said the report.

The research shows that real weekly pay at age 24 of those born in the late 1990s was 12 per cent higher than for cohorts born in the late 1980s.

At the age of 24, those born in the early 2000s are earning more than any other age cohort going back to those born in the 1950s, according to the study.

Charlie McCurdy, senior economist of the Resolution Foundation, said: "The living standards stagnation of the millennial generation has been well documented over the past decade. Many have speculated that the breakdown of generational progress has continued for Gen Z too.

"But with the oldest members of Gen Z now several years into their working lives, the good news is that they’ve enjoyed a mini pay rebound.

"By age 25, Gen Z workers were earning more than anyone born since the 1950s were at that age.

"But this good news story for Gen Z is already under threat. For a start, the higher prices and weaker economic growth resulting from war in the Middle East are threatening a fresh squeeze on pay packets."

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