The oldest Gen Zers have had money on the brain since they first entered the workplace –and many have been dissatisfied with their pay packets. Data shows that as Gen Z enter and rise through the workforce, they’re highly pay motivated – and perhaps more than any other generation right now.
The laser-focus on pay is not wholly new – 2016 data from jobs site Monster showed 70% of American Gen Zers named salary as their top work motivator, along with health insurance – but several years on, experts say the economic squeeze has made these young workers even more wage-conscious. In the past year, surveys show their salary expectations have skyrocketed: many are targeting six-figure salaries early in their careers.
This is in no small part due to the fact that Gen Z have found themselves in a unique position among generations. They’ve grown up watching their parents, largely Gen Xers, struggle with money amid economic downturns; now, they’ve graduated into their own economic turbulence, and are worried about securing their futures. As a result, they’re demanding more remuneration from their employers than ever, and at earlier stages in their career – and experts say many young workers are willing to walk for better-paying opportunities.
To some people, Gen Z may seem salary ‘obsessed’. In some cases, say experts, it may be hard for older generations to understand why young workers have such an intense focus on pay. “At Gen Z’s age, older people worked 40 hours a week, and made enough money to buy a house and barbecues on the weekend,” says Corey Seemiller, an educator, researcher and TEDx speaker on Gen Z. “Gen Z works 50 hours a week at their jobs, and another 20 hours a week side hustling, yet still make barely enough to cover rent.”
But there’s more to the story than just the human desire to make as much as possible. And what’s more: their quest for higher salaries could benefit everyone.
Largely, Gen Z is looking for stability so they can pay for essentials such as rent (Credit: Getty Images)
Downturns and turbulence
Most of Gen Z, generally defined as born between 1997 and 2012, grew up against a backdrop of multiple global recessions and economic downturns. For some, instability is all they’ve known.
“They were raised around their parents’ conversations about not having enough money and the bad things that happened because of that – homes were re-possessed, and savings decimated,” says Seemiller.
Although money stress may have been abstract to many of them, observed largely through their parents’ experiences, the economic instability of the past few years has hit them personally – and head on – as they’ve entered the workplace.
Many of these young workers graduated into the workforce or were in their very first roles during the Covid-19 pandemic. Along with being professionally stunted and unable to climb the salary ladder, they also became susceptible to layoffs – according to some data, more than other generations. “Such experiences have shaped their values, and that fear of not having enough runs deep,” says Seemiller.
They are also on entry-level salaries in extremely tough economic times, which has compounded their financial worries – and made them a feature of daily life. Spiking inflation has raised the cost of living; and as education costs have bloated, many young people are also carrying student loans. Bank of America data from 2022 shows a significant portion of Gen Z has reported the inability to save and pay down debt in the current climate.
In short, they’re extremely worried about their finances, and often more than other generations. A Cigna survey of 12,000 global workers showed 39% of Gen Zers cite financial insecurity as their leading stressor, compared to 34% of millennials and 29% of 50-to-64-year-olds. Younger workers are particularly worried about the rising cost of living and how it will impact their futures.
“Both from the data and anecdotally, Gen Z workers clearly want to be fairly compensated and recognised for the value they bring to the workplace, but also seek stability,” says Sam Chen, the Gen Z founder and CEO of US-based job-matching siteFetti. Indeed, a 2022 survey from early-career jobs community Handshake shows 74% of 1,400 2023 US graduates surveyed said they prioritise stability and salary from employers, outweighing factors including a known employer brand (41%), a fast-growing field (39%) or overall benefits (66%).
Essentially, says Seemiller, Gen Z are seeking high pay packets to ensure that security. “They want to be able to live off their salaries and not worry about paying their bills,” she says. “My studies have proved that being happy and fulfilled, and making enough to live comfortably top the most important features in Gen Z’s ideal careers – being rich and travelling the world don’t get a look-in.”
So, it’s not necessarily that Gen Z are greedy or money-grabbing; the majority, say experts, just want to cover their costs. Workers in locations with higher cost of living – mostly major cities – are particularly angling for higher pay; for example, by some estimates, the average entry-level salary for US workers in late 2022 was $55,260 (£44,627), yet a single adult living in San Francisco would need to be earning over $74,280 (£59,978) – after tax – to cover their costs.
As Gen Zers search for job opportunities, salary is top of mind (Credit: Getty Images)
While, of course, all generations are experiencing the cost-of-living strains, Gen Z aren’t as far ahead in life stages, and are therefore less secure. Millennials, for example, have been in the workforce longer, and made more money cumulatively, with some able to buy homes before prices surged and Covid-19-inflation hit.
“Gen Zers simply won’t be able to have a comparable life, in terms of financial stability, compared to older generations when they were entering the workforce,” says Seemiller. “Other generations, apart from perhaps millennials who entered the workforce during the recession, didn’t face these circumstances when they were young adults.”
The right conditions for pay rises?
Will Gen Z get the higher pay they want, then? In some cases, signs are positive.
Current job-market conditions are setting up a good situation for young workers. Although hiring has cooled since its pandemic high, the jobseekers’ market is still “red-hot” in many countries, which means workers still have the power to make demands on potential and current employers.
Experts say this means that Gen Z are more confident in demanding a higher pay packet; emboldened by the intense competition for talent, some studies show that they’re feeling positive about getting their needs met. The Handshake data shows that more than 80% of survey respondents believe they can find a job that pays well – and fulfils them personally, to boot.
There is a caveat, however. Data from recruitment-industry platform Sonovate, which surveyed 500 UK small- and medium-sized business owners that have increased salaries to get and keep talent, shows 54%doubt they will be able to keep up this pace of wage rises for long. Simply, even the most hopeful of young people may find themselves disappointed with their employer’s offer down the line.
Many Gen Z employees may instead have to move companies if they want higher pay. And some Gen Zers are also taking the drive to make more into their own hands, especially if they’re not going to get what they need directly from their employers. In the face of pay that fails to keep up with inflation, they’re seeking new sources of income at a higher rate than older generations, with Gen Z most likely to take on a second role (30%) and increase their hours (32%) – significantly higher than Boomers, at 17% and 13%, respectively, according to Randstad’s 2023 Workmonitor Report.
A rising tide
Seemiller says older generations may stand to benefit from this salary motivation. Yes, Gen Z are trying to shore up their financial futures, but Seemiller also believes their salary quest is largely linked to their fine-tuned radars for fairness and equity.
“They’re a generation who call things out, speaking up when they feel the work they’re doing isn’t fairly paid,” she says. “By doing this, they’re drawing attention to the issues and getting other generations to feel empowered to ask for a fairer share, greater flexibility or more suitable hours.”
Many companies are already feeling these changes. The April 2023 Beamery data shows 91% of 700 UK business leaders surveyed believe the needs and expectations vocalised by younger employees could have a positive impact onallgenerations.
Ultimately, even as some older workers grumble about Gen Z’s hefty pay demands, salaries are becoming more important to all generations. Gallup has been tracking American jobseekers’ priorities since 2015, and salary has climbed from the fourth highest priority (with 41% claiming it very important) to the number one priority (64%).
As for whether salary will continue to be a priority for Gen Z, Seemiller finds it hard to imagine them reneging or staying static once they reach a certain pay grade. “Our indicators point to a generation that cares about happiness, meaningfulness and fulfilment over a high salary just for the sake of it,” she says. “Either way, they’re hyper focused on equity and will continue to be the first to speak up if they’re not getting what they think should be.”
