The world is suffering a cost of living crisis as inflation has surged and disposable incomes have been squeezed. The full impact on young adults has been highlighted by a new survey.
Consultants Deloitte polled 22,000 Gen Z and millennial respondents in 44 nations about the effect of soaring prices on their lives and found that the cost of living was the number one concern for both groups, ahead of worries about losing their jobs, climate change and mental health.
Deloitte’s 2023 Millennial and Gen Z Survey is the 12th annual snapshot of the lives of Generation Z (Gen Z) – people born between January 1995 and December 2004 – and millennials – people born between January 1983 and December 1994.
The study found that many were feeling the financial squeeze so acutely they had taken second jobs to help make ends meet and were pessimistic about their ability to enjoy benefits taken for granted by previous generations, like homes and families.
One young woman from New Zealand summed up the feelings of many when she told the survey: “I’m unable to afford to start a family and have had to take on a second job, which is affecting my health.”
The World Economic Forum’s Future of Jobs 2023 report says the economic fallout from the COVID-19 pandemic has “disproportionately impacted young workers”, urging business and political leaders to invest to create better jobs and opportunities for all.
Since the pandemic and Russia’s invasion of Ukraine, inflation has surged, particularly for food, which has seen price increases outstripping other commodities.
In the worst affected countries, the price of food rose by triple-digit percentages, according to World Bank data.
Asked by Deloitte about the sources of stress in their lives, young people cited worries about their longer-term financial futures, day-to-day finances and the health and welfare of their families.
“The cost of living is getting higher and higher. I have concerns about not being able to pay my bills and not giving my children the education and life they deserve,” a woman from Brazil added.
One Gen Z man put it like this: “My main financial concern will be ensuring I can have a comfortable work-life balance, as at present I am struggling to maintain this due to picking up a lot of overtime to make ends meet.”
A third of those surveyed fear that if the current economic climate persists, it will become harder to ask for more flexibility at work to improve their work-life balance and 15 per cent think it will become impossible.
More than half of both millennials and Gen Zs think the current financial situation makes it impossible to ask for a raise or a promotion.
Even so, the quarter of Gen Z and 13 per cent of millennials who plan to quit in the next year say pay is the top reason for changing jobs.
Money was cited as the main reason for taking on a second job, with 46 per cent of millennials and 38 per cent of Gen Z saying they needed extra work to stay afloat.
The most popular second jobs were selling online and gig work, such as for food delivery or ride-sharing apps.
As well as second jobs, young people are also changing their behaviour to save money, according to Deloitte, with popular steps including shunning fast fashion and buying second-hand clothes, not driving a car and switching to vegetarian or vegan diets.
Almost two-thirds believe owning their own home will be harder or even impossible in the future, and half of Gen Z and 47 per cent of millennials say starting a family is going to be out of reach or very hard.
Over half of both groups say they exist from one payday to the next with no margin, an increase of five percentage points on the previous survey in 2022.
However, two-fifths of Gen Z and a third of millennials expect their financial situation to improve over the next year.
While online and digital media has provided new sources of income for some, it has also become a source of financial anxiety for others, the survey found.
Over half of Gen Z and 43 per cent of millennials say social media makes them want to buy things they cannot afford.
The cost of living crisis is also testing their commitment to shopping sustainably. Six in 10 of both generations say they are willing to pay more for sustainable products and services, but more than half say they won’t be able to afford to if the economic situation does not improve.