LONDON: Young Britons in Generation Z (Gen Z) are earning more in the early stages of their careers than millennials did at the same age, according to an analysis that may ease political fears of a so-called lost generation.
The Resolution Foundation found that those born between 1996 and 2000 have incomes 15% higher, before housing costs, than millennials born between 1986 and 1990 at the equivalent stage of their careers – effectively a £3,700 (US$4,870) a year boost. Improvements in living standards from one generation to the next have stalled in recent decades amid sluggish real wage growth and high housing costs.
Looking to explain the findings, the think tank pointed to steep increases in the United Kingdom’s minimum wage, helping Gen Z, and the fact that many millennials come of age in the aftermath of the financial crisis.
The career prospects of Gen Z have become a political concern after youth unemployment rose to its highest in over a decade, with more than a million 16 to 24-year-olds not in education, employment or training.
It prompted a government review by former minister Alan Milburn to warn of a “lost generation.”
Still, Gen Z is benefiting – financially at least – from more young people living at home with their parents rather than entering the property market. Some 63% of those aged between 20 and 24 still live at their family home, up 12% since 2011.
“Impracticably high rents and house prices have driven this boom,” said Lalitha Try, economist at the Resolution Foundation.
However, a separate report by the Institute for Fiscal Studies, also published yesterday, said many graduates are not reaping the rewards of going to university.
It warned that a quarter of graduates can expect to be worse off over their lifetime from going to university with many taking on large amounts of debt to pay for their education. — Bloomberg
