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Understanding Gen Z's Potential in the Economy
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Gen Z is known for being the first real digital natives. While some think that because they're digital natives, that they prefer everything be digital, there are other sources that says that Gen Z prefers to go back to the ways of the past. One example of this is the fight over remote work vs working at the office. The consensus thinks that Gen Z prefers remote work but Fast Company finds that Gen Z prefers to come to the office. For dating, the consensus says that Gen Z would rather meet people virtually and chat with them virtually through a dating app than meet and talk to them in-person. NBC News finds that some Gen Zers see Instagram as the preferred middle ground between meeting people virtually and in-person and another source finds that Gen Z has a negative view of online dating compared to Millennials.

Even as a member of Gen Z, it's difficult to find understand what the consensus among Gen Z is. In K-12, by paying attention to what the popular kids were doing, you can generally get an idea on where the rest of the generation is leaning towards. For example, if they would choose to drive Teslas to school or start eating the more expensive but healthier meals, the rest of the people within the school will start thinking that electric vehicles are cooler than Ford Mustang's and Jeep Wranglers and that it's cooler to eat a salad from Sweetgreen $SG than eat a burger from McDonald's $MCD. At college, it gets difficult to see what people's preferences are as there is no set of popular kids. The fraternity and sorority people, who are suppose to resemble the popular kids of the school, have a small influence on the rest of their class. Everyone else is going in completely different directions and living life the way they want to. Outside of college, when entering the workforce and working closer with your colleagues, your preferences and your colleagues's preferences start to merge and your preferences start to change. Overall, you have a better idea on Gen Z's preferences by surveying them when they're in high school and when they're in the workforce. Survey results are the least reliable when they're in college.

Here are the things that researchers say about Gen Z that I can confirm are true:
  • mental health is emphasized more than ever
  • we use our electronics for most of the day
  • we review our purchases by reading various articles and watching various Youtube videos before buying it
  • we flock to corners of the internet to discuss our passions and interests
  • we are the most pessimistic generation for many things (future earnings, finding love, retirement, fulfilling basic social needs)
  • we are thinking more on how our purchases affect the environment as our earnings power grows
  • we value ease of use
  • we like both shopping in stores and having a great online shopping experience at the same time
  • we're use to ads everywhere
  • we prefer to spend on things that improve our daily lives than on luxuries
  • we like to spent on things that give us access rather than ownership (i.e. music streaming and content streaming subscriptions) while also liking to spend on things that give us ownership (a house, car, furniture, books, electronics, etc.)
  • we don't like school but see it as our only path towards a better life
  • social awkwardness is a norm and it's one of the big reasons why it's difficult to make friends in the first place
  • we're very accepting of different people and their struggles
  • we are big on donating

Economic Outlook for Gen Z

There's debate over whether Gen Z has a brighter future than previous generations. Some say it's one of the best times to be alive because of Generative AI, social media, the internet, robotaxis, better medicine, fintechs, electric vehicles, and more. And there are reasons for why Gen Z would have a dull future compared to previous generations, like the high likelihood for WW3 to happen, more competition for jobs due to technology reducing the number of jobs, and being in a world of gender imbalances (where the issue is much worse in India and China).

In terms of homeownership, they're doing better than Millennials and Gen X. Redfin $RDFN, the organization that published the report of homeownership rates by age for each generation, has this to say:

"Younger homebuyers need less money than their older counterparts because they tend to buy cheaper homes with smaller down payments. That’s partly because people under 25 may be more flexible about home size and location than an older person who’s more likely to have children and places more value on proximity to certain schools and their office."

It's also important to note that many members of Gen Z took advantage of the low mortgage rates during the pandemic and saw their wages grow fast as a result of the tight labor markets.

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In terms of job outlook, the Class of 2023 entered one of the strongest job markets in 70 years. With Gen Z being more willing to pursue an education than previous generations, it's assumed that Gen Z will have more earnings power than previous generations and thus have a brighter future.

Members of Gen Z that graduated and entered the workforce are saving more money than previous generations. Also, members of Gen Z have started investing at a younger age than previous generations. The compounding and increased investment/saving aspects of Gen Z are what will bring compound interest in their favor. As interest rates increase, it can be assumed that the returns that they will receive from their investments will increase as well.

At the same time, with Gen Z being some of the most frequent traders on Robinhood and other investing platforms, it remains to be seen whether they can strike riches or see their money evaporate overtime. This can be related to Gen Z being the most entrepreneurial generation ever. Combining their high frequency of trading stocks, options, and crypto with them being more likely to start a business or do freelance work, we can conclude that Gen Z is more willing to strike out on their own.

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I can't comment on how Gen Z will do with marriage, dating, etc. There are still plenty of unknowns and an immense number of contradicting evidence on whether Gen Z wants to get married or doesn't want to get married. The pandemic has hindered the social skills of most members of Gen Z. It will take a long time for those members to regain the social skills that they once had from pre-pandemic times. Salon published an article about this concern and mentioned that formerly incarcerated people would choose to self-isolate because they don't feel comfortable around other people because they've been isolated for a long time. With teens having missed out on years of socializing because of the pandemic, they're entering college and the workplace with less developed social skills, making it harder for them to relate to or communicate with their peers. It's most likely why here in 2023, Gen Z is being known for struggling to make and keep friendships.

If they struggle to make and keep friends, how can anyone expect them get into and maintain a relationship? I'm curious to hear your thoughts in the comments.

It's reasonable to expect Gen Z to get married much later than Millennials. Besides it being a long time trend of people getting married at later ages, Gen Z will want to also take more time with developing their social skills. The majority of Gen Z saw a disruption in their social skills because the pandemic happened during the prime of their social development stage in life. It's harder to develop one's social skills when you're older than when you're a teenager. How long it will take people to develop their social skills throughout adulthood varies. While internet sources say it takes 1-3 years to develop or improve your social skills as adults, realistically, that can only happen when you have daily opportunities to interact with people. Since adulthood can be more lonely than people realize, and there's the possibility that most people in Gen Z will work remotely, having fewer opportunities to socialize with people means needing a longer time to develop those social skills.


Like Millennials, the future prospects for Gen Z are mixed. in terms of earnings power and wealth, there are plenty of reasons to be optimistic about it. They're doing better than Gen X and Millennials in terms of homeownership and are more educated than previous generations. Being born in a time where technology reduces barriers, Gen Z is investing early and is more financially savvy than previous generations. However, issues with socialization will affect the marriage prospects of this generation and thus one cannot expect Gen Z to reverse the long term trend of declining birth rates.

For businesses that empower entrepreneurs and produce goods that make daily life better, the growing earnings power of Gen Z will cause those businesses to grow. Luxury goods companies will need to change their marketing campaigns to attract Gen Z customers as accessible luxury is considered more appealing. For travel companies, more business is coming their way.

The paradigm shifts that Gen Z is bringing to the world will be big.
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