[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]The primary concern of Gen Z when it comes to work has always been money, and they have often been dissatisfied with their earnings. Recent data indicates that as Gen Z enters and progresses in the workforce, they are particularly motivated by pay, possibly more so than any other generation at present.
Although the emphasis on pay is not entirely new – a 2016 study from a job site called Monster revealed that 70% of American Gen Zers considered salary as their top work motivator, along with health insurance – experts argue that economic difficulties have made these young workers even more focused on wages. Over the past year, surveys have shown a significant increase in their salary expectations, with many aspiring to six-figure incomes early in their careers.
This strong emphasis on pay can be attributed, in part, to the unique circumstances in which Gen Z finds themselves compared to previous generations. They have observed their parents, who mostly belong to Gen X, grappling with financial challenges during economic downturns. Now that they have entered their own turbulent economic environment, they are concerned about securing their futures. Consequently, they are demanding higher compensation from their employers and are even willing to seek better-paying opportunities at earlier stages in their careers. Experts suggest that many young workers are prepared to leave their current jobs for better pay.
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While some may view Gen Z as excessively focused on salaries, it is important to consider the reasons behind their intense drive for higher earnings. Older generations may find it difficult to comprehend why young workers place such a significant emphasis on pay. Corey Seemiller, an educator, researcher, and TEDx speaker on Gen Z, explains that older individuals, at the same age as Gen Z, worked 40 hours a week and earned enough to buy houses and enjoy leisure time. On the other hand, Gen Z works 50 hours a week in their jobs and an additional 20 hours on side hustles, yet struggle to cover their rent expenses.
However, the Gen Z quest for higher salaries encompasses more than just the desire to maximize income. Additionally, their pursuit of better pay could have positive outcomes for everyone involved.
The majority of Gen Z individuals, typically born between 1997 and 2012, have experienced multiple global recessions and economic downturns throughout their upbringing. For many of them, instability has been a constant presence.
According to Corey Seemiller, Gen Z has been exposed to their parents’ discussions about financial struggles, such as not having enough money, home repossessions, and depleted savings. While money-related stress may have been observed through their parents’ experiences, Gen Z has personally experienced the economic instability of recent years as they entered the workforce.
The Covid-19 pandemic further exacerbated their financial concerns. Graduating into a challenging job market, Gen Z faced professional setbacks, limited opportunities for salary growth, and increased vulnerability to layoffs compared to other generations. These experiences have deeply influenced their values, and the fear of not having enough financial security is deeply ingrained in them.
Additionally, Gen Z is entering the workforce during tough economic times and earning entry-level salaries, which further compounds their financial worries. The rising cost of living, inflation, and the burden of student loans have intensified their financial struggles. Data from Bank of America in 2022 revealed that a significant portion of Gen Z reported difficulties in saving and paying off debt in the current economic climate.
Their financial concerns surpass those of other generations. A survey by Cigna showed that 39% of Gen Zers considered financial insecurity as their top stressor, compared to 34% of millennials and 29% of individuals aged 50 to 64. Younger workers are particularly anxious about the increasing cost of living and its impact on their future.
According to Sam Chen, the Gen Z founder and CEO of job-matching site Fetti, Gen Z workers not only desire fair compensation and recognition for their value in the workplace but also seek stability. A survey by early-career jobs community Handshake in 2022 revealed that 74% of US graduates prioritize stability and salary over other factors when considering employers.
In essence, Gen Z’s pursuit of higher salaries is driven by their desire for financial security rather than greed. They aim to earn enough to cover their expenses and not worry about financial obligations. Studies indicate that Gen Z prioritizes happiness, fulfillment, and a comfortable standard of living in their ideal careers, rather than seeking immense wealth and global travel opportunities.
It is worth noting that workers in high-cost living areas, predominantly major cities, are particularly inclined to seek higher pay. For instance, estimates suggest that in late 2022, the average entry-level salary for US workers was $55,260, but a single adult living in San Francisco would need to earn over $74,280 after taxes to meet their expenses.
Gen Z, unlike older generations, is facing financial insecurity and less stability in terms of their financial future. Unlike millennials who entered the workforce earlier and accumulated more wealth, Gen Z is not likely to have a comparable level of financial stability as they start their careers. The circumstances they are facing as young adults are unique, and their financial prospects may not be as promising.
However, there are some positive signs indicating that Gen Z may be able to achieve the higher pay they desire. Despite the cooling of hiring since the peak of the pandemic, the job market is still favorable for job seekers in many countries, giving workers the power to negotiate and make demands regarding their pay. This competitive job market has made Gen Z more confident in seeking higher salaries, with studies showing that they are optimistic about meeting their financial needs while finding fulfilling work.
Nevertheless, there is a caveat. Some data suggests that businesses may struggle to sustain the current pace of wage increases. While many young people are hopeful about receiving higher pay, they may ultimately find their employers’ offers disappointing.
To obtain higher salaries, many Gen Z employees may need to switch companies. Additionally, some Gen Zers are taking matters into their own hands by seeking additional sources of income. They are more likely than older generations to take on second jobs or increase their working hours to cope with inflation, according to a report by Randstad.
Interestingly, the pursuit of higher salaries by Gen Z may have a positive impact on older generations as well. Gen Z’s emphasis on fairness and equity in pay can draw attention to these issues and empower workers from other generations to demand fairer compensation, greater flexibility, or more suitable working hours. Many companies are already feeling the effects of these changes and recognize the potential benefits of meeting the needs and expectations voiced by younger employees, as indicated by a survey of UK business leaders.
Ultimately, salaries are becoming increasingly important to all generations. Gallup surveys in the US have shown that salary has risen from the fourth highest priority to the top priority for job seekers since 2015. While Gen Z may prioritize happiness, meaning, and fulfillment over a high salary for its own sake, they remain highly focused on equity and will continue to speak up if they believe they are not being adequately compensated.[/vc_column_text][/vc_column][/vc_row]
