Great Recession Is Great Downer for Generation Z
You could say members of Gen Z are pragmatic. They grew up after 9/11. They’ve seen reports of school violence and the fallout of the Great Recession. They’re more aware of troubling times, and as a result, they’ll be wary with their money, according to this Forbes article. So why so gloomy?
(Photo credit: BrohoofTheWorld)
Those in Generation Z, age 17 and younger, expect to make a modest $36,900 annual salary for their first job out of college, according to a recent study by TD Ameritrade Holding Corporation. That’s a couple thousand less than what the National Association of Colleges and Employers said is the starting salary for graduates in 2012: $44,000. And even less than the typical Generation Y salary in PayScale’s “Gen Y on the Job” Report: $39,700.
“After seeing their parents lose jobs and their older siblings move back home, this generation will avoid debt,” the article’s author, Emily Anatole, writes. “They’ll be diligent researchers, always considering what’s a good investment, and less likely to make impulse purchases.”
They might buy a post-apocalyptic video game here or there, but this is shaping up to be a generation of savers. More indications:
- They don’t need instant gratification. A quarterly report on young consumers by The Intelligence Group, a youth-focused, research-based consumer insights company, found that 57 percent of Zs said they would rather save money than spend it immediately.
- They’re thinking about retirement earlier than previous generations.The TD Ameritrade study found that 28 is the age that Gen Z members, on average, plan to start saving for retirement. (Another TD Ameritrade survey found that Baby Boomers, on average, started saving at age 32.)
Yet Gen Z is no group of scaredy-cats, waiting for the sky to fall. Only six percent in The Intelligence Group’s study reported being fearful about the future.
“They’re already offering suggestions, solving problems, and proving their savvy, demonstrating how prepared they are for stressful and uncertain times,” Anatole writes.
Gen Z is more realistic than their Generation Y predecessors — those now ages 18 to 34. Gen Y’s characteristic optimism appears to be translating to higher paying jobs compared to the more realistic Gen Z view. According to PayScale’s “Gen Y on the Job” report, Gen Y is more likely to choose neuroscience and bioengineering as college majors, relative to all U.S. workers. Those professions’ salaries, respectively, are $39,186 and $60,400, compared to the $36,900 that Gen Z college grads in the TD Ameritrade study plan to make.
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