Is It Harder for Gen Z To Reach the Upper Class Than It Was for Past Generations?
According to the latest data from the Pew Research Center, America's upper-class households earn upwards of $169,000. In contrast, the Census Bureau reported that the median household income in the U.S. is $83,730 — that’s middle-class territory. Do the math and you'll notice something uncomfortable: You need to earn roughly double the median just to crack the upper tier.
That gap isn't new. But for Gen Z, it's wider, and the climb to close it is steeper than it was for their parents or grandparents. Higher costs, tighter margins and a few less obvious culprits (hello, social media) are all conspiring to make "upper class" feel further out of reach than ever.
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Here's what's actually working against Gen Z — and, more importantly, what still works in their favor.
The Math Doesn't Work Like It Used To
Start with housing, because the numbers alone tell most of the story. Per data from the Federal Reserve Bank of St. Louis (FRED), the median sales price of U.S. homes was $403,200 in the first quarter of this year. Twenty years ago, it was $247,700. Go back another 20 years to 1986, and the median sales price was just $88,000.
As Cody Schuiteboer, president and CEO of Best Interest Financial, explained it, the median cost of homeownership 40 or so years ago was three times the median salary. Now, it’s more like six or seven times as much.
In major cities where salaries run higher, home prices climb right along with them, erasing much of that income advantage.
Education isn't offsetting the gap, either. A four-year degree can still lead to a strong starting salary, but getting there costs more than it ever has.
The difficulty of reaching upper class is “compounded by the skyrocketing prices of education that young people have to pay in order to get decent jobs,” Schuiteboer said. “Members of Generation Z pay $10,000+ annually in tuition at state colleges and universities, while their boomer parents could afford it with less than a few hundred dollars per year.”
In the 21st century alone, the average cost of a four-year college education has more than doubled, per the Education Data Initiative. Students today can expect to pay an average of $38,270 annually.
And even after clearing that hurdle, the payoff isn't immediate. The real median personal income today is $45,140, according to FRED. Even with time, the right skills and possibly that expensive degree, most people are still looking at years before upper class comes into view.
It's Not Just the Money
Housing and tuition are the obvious villains. But according to the experts, there's a subtler force working against Gen Z's wealth-building that has nothing to do with interest rates or sticker prices.
"I see borrowers across generations daily, and it's clear that while the generation gap has always been significant, it's currently bigger than ever when it comes to wealth building and reaching the upper classes," Schuiteboer said. "It's significantly harder for Gen Z than for baby boomers."
Part of that gap comes from something Matt Miller, certified financial planner and founder of financial planning firm Upleft, called the "envy-industrial complex" — the nonstop scroll of other people's wins, upgrades and highlight reels.
“It is hard to build wealth while drowning in the 24-hour swirl of online content,” Miller said. “The people selling the dream of putting a new Lamborghini in your garage by being another content creator are working against the long-term success of their audience.”
Seeing what other people are accomplishing can be motivating in small doses. But that same content is often more distracting than inspiring, and it's competing for attention at the exact moment Gen Z also has to navigate a brutal job market. Pair the two, and the path to upper class gets harder before a single dollar is even spent.
Reaching Upper Class Is Still Possible
Being born in the 21st century doesn’t mean you can’t reach the upper class. The path just looks a bit different than it did for previous generations.
“Reaching the upper class is still possible but only if you forget all your preconceptions about the journey to wealth,” Schuiteboer said.
First, Gen Z should focus on earning more, not on spending more.
"Concentrate on raising income instead of spending more every year," Schuitboer said, "and purchase property outside the pricey metropolises.”
Miller takes it a step further, pushing back on one of the most repeated pieces of career advice out there.
“I recommend young people consider, even if temporarily, casting aside the romanticized advice to ‘follow your passion,’ but rather ruthlessly follow the path of their skills and talents,” Miller said. “Focus on what you're good at to maximize income and aggressively guard against avoidable leaks in your cash flow.”
None of this makes the climb easy, but "harder" isn't the same as "impossible." Gen Z isn't short on opportunity. The ones who tune out the highlight reels, get ruthless about what they're actually good at and let income — not appearances — do the heavy lifting are the ones who'll get there first.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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