Compared to whom?
Gen Zers have grown up amidst endless economic and political crises — fallout from September 11, the financial collapse of 2008, the Great Recession, the Covid-9 pandemic, January 6, etc. — that led to a grimmer view of their futures. Axios reports that their struggles have pushed them right while setting impossibly high expectations for financial security:
Catch up quick: Financial services company Empower surveyed more than 2,200 Americans in September and the Gen Z respondents — born between 1997 and 2012 — said they would need to make more than $587,000 a year to be “financially successful.”
That’s three to six times the amount reported by other age groups surveyed, and almost nine times the average U.S. salary tracked by the Social Security Administration.
So what’s going on here?
- Angst: “Many people feel they’re coming up short — with half believing they’re less financially successful compared to others around them,” Rebecca Rickert, head of communications at Empower, tells Axios. “The majority think prosperity is harder to achieve for their generation, which factors into the magic number people attach to success.”
- Persistently high costs: “Sure, groceries, student loan payments, the cost of going out to restaurants and bars all matter — but ‘feeling successful’ when you have to have a roommate to afford rent undermines all capacity for consumption,” David Bahnsen, whose California-based Bahnsen Group manages $6.5 billion in assets, tells Axios.
- The influence of influencers: “These macro trends are exacerbated by social trends. Influencers portray false versions of reality that suggest wealth building being easy and hard work being outdated,” says David Laut, CIO of Abound Financial in California. “It is widely known that comparison is the thief of joy, and this leads the next generation to feel discouraged, setting higher and higher bars as a prerequisite for happiness.”
- Mismatched expectations: “They’re concerned about increased costs of living, hyper-aware that their money isn’t going as far as it used to even few years ago. Our hypothesis is this is having a major impact on what they think it takes to be ‘financially successful’ in our current climate,” Julia Peterson, director of consumer marketing at youth marketing agency Archrival, tells Axios.
Costs are certainly up, especially housing costs. People living with their parents into their late 20s or needing rommates just to get by certainly influences one’s sense of economic stability.
But the statement above about “influencers” stands out. Is their presence on social media leaving the impression that fame and fortune are just one TikTok away? Or is that just generational prejudice by us oldsters? Or is it another edition of that familiar, old American fantasy that everyone is just one lottery tickey or NBA contract from being fabulously wealthy and a life of leisure? I don’t know. Nor do I know how representative is the Gen Z cohort in Empower’s survey of 2,200 Americans.
Cara Michelle Smith writes at Salon citing Eric Arzubi, a child and adolescent psychiatrist at the Yale Child Study Center:
More than 90% of Gen Zers regularly use social media. And as anybody with even one social media account knows, apps like TikTok and Instagram offer glimpses into the (often meticulously curated) lives of individuals who, frankly, seem like they’re living our fantasy. A perfectly innocent, five-minute scroll sesh can bombard you with irrefutable evidence that there are people living in nicer apartments than you rent, buying pricier skincare products than you can afford and wearing clothes you couldn’t dream of splurging on — making you, by comparison, feel a little less satisfied with your weekend road trip now that you’re comparing it to another couple’s two-week retreat in the Maldives. This can redefine what success looks like.
“That’s what people naturally do, right? You index yourself against other people. That’s just kind of human nature,” Arzubi said. “We all know that the level of happiness doesn’t necessarily correlate with what people are seeing online, but that doesn’t matter.”
There’s a name for this phenomenon: upward comparison. It’s the flipside of downward comparison, in which individuals compare themselves to those with fewer resources. Downward comparisons can translate to feelings of gratitude, while upward comparisons can leave individuals feeling dissatisfied with their lives, though research also suggests upward comparison can motivate individuals to create positive changes.
My Gen Z friends are doing better, I suspect. But their cohort’s right lean won’t help any of us in the end.
(h/t DJ)