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A recent report by Bank of America projects that Generation Z—those born between 1997 and 2012—will become the richest generation in the world within the next decade. According to the report, Gen Z is expected to accumulate over $74 trillion in income by 2040, marking a major shift for a generation that has faced significant financial struggles in recent years.
A Generation Grappling with Economic Hardships
Gen Z has grown up in an era of economic uncertainty, much like Millennials before them. High unemployment, a stagnant job market, and rising living costs have hindered their ability to achieve traditional financial milestones such as homeownership. According to Bank of America’s survey, nearly one-third (32%) of Generation Z respondents feel they are financially behind where their parents were at the same age.
With limited savings, Gen Z has developed a reputation for prioritizing spending on experiences such as vacations and concerts, as well as indulging in their pets. The report characterizes them as “a generation of spenders,” noting that their spending growth—both on essential and non-essential items—outpaces that of the broader population. This trend is expected to make them “one of the most disruptive generations” in terms of their impact on global economies, markets, and social systems.
Gen Z Facing an Uncertain Job Market
The labor market has proven challenging for Gen Z, especially following the economic disruptions caused by the COVID-19 pandemic. In February, the number of Generation Z households receiving unemployment benefits surged by nearly 32% compared to the previous year. Additionally, unemployment among new workforce entrants—largely comprising Generation Z—rose by 9% year-over-year, continuing an upward trend observed since 2023.
Bank of America describes Gen Z as “overeducated and underemployed.” The report highlights that in 2022, 57% of Gen Z individuals aged 18 to 21 who were no longer in high school were enrolled in two-year or four-year college programs. In contrast, 53% of Millennials were enrolled in higher education at the same age in 2003, while only 43% of Gen Xers pursued college education in 1987.
Gen Z Road to Wealth: Higher Wages and Inheritance
Despite current economic difficulties, Gen Z is already experiencing faster wage growth than other generations. Bank of America’s deposit account data shows that in February, Gen Z’s wage growth increased by nearly 8% compared to the previous year—double the median wage growth across all age groups.
Beyond employment earnings, Gen Z is expected to benefit significantly from the upcoming Great Wealth Transfer. As Baby Boomers pass down their accumulated assets, an estimated $84 trillion will be inherited by Gen X, Millennials, and Generation Z by 2045, according to a 2021 report by Cerulli Associates.
Bank of America researchers predict that the combination of rising wages and inherited wealth will transform Generation Z into a dominant economic force within the next decade. In 2023, Gen Z’s total income stood at $9 trillion, but that figure is expected to quadruple to $36 trillion within five years, before surpassing $74 trillion by 2040.
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