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Study Reveals Gen Z Was Hit the Hardest by Inflation

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Study Reveals Gen Z Was Hit the Hardest by Inflation
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Study Reveals Gen Z Was Hit the Hardest by Inflation

Source: Pinterest

According to a new study, the high inflation rates that started after the COVID-19 pandemic affected Gen Z the most.

The COVID-19 Aftermath 

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The COVID-19 pandemic raged through the world, leaving a lot of death and economic damage in its wake. Many countries are still trying to recover from the aftermath of the pandemic. According to a new study conducted by some analysts, the inflation rise caused by the pandemic has affected Gen Z the most, and they may continue to feel these effects for a long time. 

The Gen Z Struggle

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Two recent reports by expert analysts have revealed that the inflation caused by the pandemic has hit Gen Z harder than all the other generations. The two reports were conducted by Moody’s Analytics and TransUnion, a credit reporting agency. According to both studies, the struggle with inflation can also be a significant hindrance to the future financial success of the members of the generation. 

Gen Z Need High Paying Jobs

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The reports have also shown that the high rate of inflation majorly affects Gen Z members from the moment they leave college and struggle to find good jobs that pay them well enough to survive. The recent decline in company hiring has undoubtedly added to this problem, making the job market much more competitive for Gen Z. 

Increased Prices

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The inflation over the past few years has affected not only Gen Z but all the other generations as well. Many people can no longer afford their basic necessities and grocery shopping has now become a very costly activity. This surge in prices has had a negative effect on the members of Gen Z, who are just starting their lives and are still trying to get on their feet. 

ALSO READ: Gen Z and Millennials’ Approach to Taking Time Off 

The Effect of Inflation on Gen Z

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The studies showed that Gen Z has felt the highest impact of the current inflation rates, mainly because they are just starting out in life. Most of them are working at entry-level jobs and are just beginning their careers as working-class citizens. Therefore, they do not have a lot of savings that can help with this inflation and are struggling to make ends meet. 

Gen Z’s Money Spending Pattern 

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Another reason why inflation has been a big problem for Gen Z is that this generation spends its money quite differently compared to the other generations. According to the reports, Gen Z often buys the goods and services that have been a major focus of inflation. A good example of this is Gen Z often buying fast food while the prices of most fast foods have increased greatly. 

POLL—Should the Government Increase Taxes on the Wealthy To Reduce Economic Inequality?

Rent

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The reports also show that Gen Z relies heavily on rent compared to other generations. As inflation has caused rent to increase dramatically in the past few years, so has rent. Therefore, the reports show that while an average American citizen spends 7% of their yearly income on rent, Gen Z spends a huge 20% of their income on rent. 

Car Insurance 

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Another sector that has been heavily impacted by the current inflation rate is the price of auto insurance. However, Gen Z has reported a higher affectation rate than most. This is because the younger generation has to pay higher premiums compared to millennials. This is also because companies believe that Gen Z is more likely to get into car accidents due to their younger age and high risk. 

Piling Credit Card Debt

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As the generation continues to struggle with inflation, many of them turn to credit cards to pay their bills. However, this debt is piling up significantly, causing Gen Z to have the highest credit card debt among all generations. The studies also found that Gen Z believes that they have time to pay back, unlike millennials, who seem more logical about their choices. 

ALSO READ: Gen Z Feels Left Out of Biden’s Debt Relief Plan

Hope for Gen Z

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However, the situation is not all bad for Gen Z members. According to the studies, this generation has seen the highest rate of increase in wages due to inflation over the past few years. Therefore, this could help them earn more and also manage themselves better as increased pay will give them better living and spending conditions. 

Gen Z’s Work Culture

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Several studies have also shown that Gen Z members are more likely to change jobs often than members of other generations. This can work to their advantage, as they can seek higher-paying jobs more readily than others. Furthermore, Gen Z’s ability to adapt to many different work conditions in a short period of time can also help them earn more in the future.

Possible Decline in Inflation 

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Many experts are hoping for the best and predicting that the constantly rising inflation rate will soon become lower with time. They believe that the next few months will mark a significant decrease in inflation, causing a huge drop in prices nationwide. This can benefit Gen Z members, as they will now spend less on their formerly overpriced items.

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