Gen Z is expected to become the world’s largest and wealthiest generation by 2035, according to a recent report by Bank of America. The youngest working-age group is projected to earn $74 trillion in income by 2040, driven by wage growth and a massive intergenerational wealth transfer.
The report said Gen Z, currently navigating economic challenges such as high rent and student debt, had an estimated income of $9 trillion two years ago. That figure is expected to rise to $36 trillion by 2030 before more than doubling over the next decade.
Bank of America said Gen Z’s income growth will outpace other generations as they inherit a portion of the $84 trillion expected to pass down from baby boomers and older generations by 2045.
Despite being overeducated and underemployed, the report noted that Gen Z saw an 8 percent increase in wage growth in February as more members enter the full-time workforce. Still, the group faces a tough labor market, with youth unemployment up 32 percent year over year.
Many Gen Z workers have delayed major life milestones such as home ownership and starting families due to rising costs, choosing instead to prioritize spending on rent, education, and lifestyle. Global spending by Gen Z is forecast to grow from $2.7 trillion this year to $12.6 trillion by 2030.
Businesses are expected to adjust to Gen Z’s spending habits, with sectors such as e-commerce, luxury, wellness, and pet care among those likely to benefit. The generation’s interest in fintech, gaming, and digital platforms is also expected to influence future market trends.
“It’s likely they will be among the most disruptive generations to economies, markets, and social systems,” the report said.