Data shows Millennials and Gen Z have higher real wages than previous generations at the same age. Their economic anxiety stems from a perceived lack of clear career paths and a "vibe-cession" fueled by social media, not necessarily from worse economic data.
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Younger generations aren't inherently weaker; they are reacting to an unprecedented volume of external voices from social media. Previous generations contended with a few dozen key influencers (family, teachers), not the thousands that now amplify the inner critic daily.
The wealth divide is exacerbated by two different types of inflation. While wages are benchmarked against CPI (consumer goods), wealth for asset-holders grows with "asset price inflation" (stocks, real estate), which compounds much faster. Young people paid in cash cannot keep up.
The economy presents a confusing picture with acceptable GDP growth but virtually no job creation. This disconnect creates anxiety because for most people, job security, not GDP, is the primary measure of economic health. This leads to a feeling of being 'schizophrenic' about the economy's true state.
Young people feel a sense of betrayal after following the prescribed path—good grades, college—only to graduate with immense debt into a job market with few opportunities and an unaffordable housing market. This broken promise fuels their economic anxiety.
Young people face a dual crisis: economic hardship and a psychological barrage from social media's curated success. This creates a "shame economy," where constant notifications of others' fake wealth intensify feelings of failure, loneliness, and anxiety more than any other societal factor.
Managers misinterpret Gen Z's demands for flexibility and rapid promotion as laziness. In reality, new income streams, like earning $50,000 a year from TikTok brand deals, give them unprecedented leverage and options, forcing a necessary evolution in management and retention strategies.
Despite the best earnings season in four years for companies like Apple and Amazon, consumer brands like Chipotle, Shake Shack, and Crocs report slowing sales from 20-somethings. This demographic faces soaring unemployment and slowing wage growth, creating a hidden weak spot in an otherwise strong economy.
The distorted perception of one's financial health, or 'money dysmorphia,' is not exclusive to the financially insecure. A significant portion of Americans earning over $100k annually do not consider themselves wealthy, revealing a stark disconnect between financial reality and perception fueled by online comparisons to extreme wealth.
Historically, financial comparison was contained within socioeconomically similar neighborhoods. Social media removes these geographic and social barriers, constantly exposing individuals to global, hyper-affluent lifestyles. This distorts the perception of 'normal,' making luxury seem common and fueling widespread feelings of financial inadequacy.
Despite economic pressures, Millennials and Gen Z still desire traditional success milestones like homeownership. The key difference is that the path is no longer linear and the timeline has shifted. Financial planners must adapt their advice to this new, less predictable journey.
