Thin Wallets but Dominating the Global Economy in 10 Years... Emerging as the Wealthiest Generation [Segyeneun Zgeum]

Tough Times for Generation Z, Poised to Become the Wealthiest Generation
Generation Z's Total Income to Surge to $74 Trillion by 2040
Driven by Rapid Wage Growth and Inheritance of Parental Assets

Editor's NoteGeneration Z (those born from the late 1990s to the early 2010s) is gaining attention as a generation that leads culture and trends in a rapidly changing era, setting new standards across society. In [The World is Z Gold], we aim to shed light on the lives and values of Generation Z worldwide and explore how they are transforming society.

Based on high educational attainment and rapid wage growth, Generation Z is predicted to become the wealthiest generation and the main driver of consumption within the next decade. This contrasts with the current situation of Generation Z, who are experiencing economic difficulties due to high living costs and employment insecurity.

"Generation Z with Bright Future Prospects Will Shake the Global Economy"

Bank of America (BoA) forecasted in its report titled 'Generation Z: The New Economic Pillar,' published on the 14th of this month, that Generation Z will become the wealthiest generation within the next ten years. The report states that the number of Generation Z individuals will reach 30% of the total population within a decade, and their total income is expected to surge from approximately $9 trillion in 2023 to $36 trillion in 2030 and $74 trillion by 2040. It also highlights Generation Z's purchasing power, predicting their consumption will increase significantly from $2.7 trillion in 2024 to $12.6 trillion in 2030.

BoA added, "Generation Z may appear to be a 'consumption-driven generation' that spends more than it saves, but going forward, they will be a generation that redefines the value and methods of consumption," describing them as "the generation that will most profoundly shake the global economy and social systems."

BoA also noted that "there is hope for a bright future from Generation Z, despite their tendency toward 'Doom-Spending.'" 'Doom-Spending' refers to impulsive high-cost consumption driven by economic uncertainty, geopolitical tensions, and pessimism about the future, rather than saving. It has been pointed out that as Generation Z finds it difficult to plan for the future amid high inflation and employment insecurity, they are adopting a lifestyle focused on immediate happiness, leading to the spread of doom-spending.

Generation Z Set to Inherit Massive Wealth... "Unlimited Profit Opportunities"

There is a forecast that Generation Z will emerge as the wealthiest generation within the next 10 years. Pixabay

Factors supporting Generation Z's income potential include ▲high educational attainment ▲rapid wage growth ▲large-scale inheritance of assets from the parent generation. In particular, Generation Z has a higher level of education compared to other generations. As of 2022, 57% of 18- to 21-year-olds are enrolled in two- or four-year colleges after graduating from high school. This is higher than the 53% of Millennials (born 1980?1994) and 43% of Generation X (born 1965?1979).

High educational attainment is likely to lead to better job stability and wage increases. In fact, Generation Z's wage growth rate was 8% last year, the highest among all generations. The report analyzed, "Generation Z experiences faster wage growth compared to other generations," noting that "most are seeing rapid salary increases after entering the labor market for the first time."

Generation Z is also expected to inherit massive wealth from their parents. The U.S. financial research firm Cerulli Associates projected that by 2045, the Baby Boomer generation (born 1955?1964) will transfer approximately $84 trillion in assets to their children. A significant portion of this wealth is likely to be passed on to the Millennial and Generation Z cohorts. BoA forecasts, "Young generations will now be at the center of consumption, savings, and investment decisions."

Some also evaluate that Generation Z, being familiar with digital environments, can find new profit opportunities online. Financial education expert Amanda Francis told the New York Post in an interview, "Unlike previous generations, Generation Z has unlimited profit opportunities in e-commerce, AI-based businesses, and more," adding, "Those who embrace innovation will lead the upcoming economic boom." She continued, "The important thing now is the strategy of 'how to manage money,'" advising, "It is necessary to accumulate assets as investors, not just consumers. Developing the habit of making small, regular investments early on can form the foundation for building substantial wealth in the long term."