Gen Zs have a well paid but overworked career ahead

The first cohort of Gen Z uni grads is now entering the workforce. Let’s think through what kind of career Gen Zs will live through.

Art: Emilia Tortorella

The first cohort of Gen Z uni grads is now entering the workforce. Let’s think through what kind of career Gen Zs will live through.

There are so few Gen Zs in the workforce that those who are there have unparalleled bargaining power for the rest of their careers.

The current low unemployment rate means that even inexperienced recent graduates can demand high wages. The simple logic of supply and demand. It is workers, not jobs, that are in short supply.

Gen Z enters the workforce at a time when the unemployment rate stands at super low 3.5%. A decade ago, in 2012, Millennials entered the workforce while unemployment stood at 5.2%. The youngest Gen Xers entered the workforce in 2002 when unemployment was at 6.4%. Anyone entering the workforce in 1992 had it even tougher (10.7%).

This creates a phenomenon called wage inflation. As soon as a business starts paying higher starting salaries to their graduates, current staff will demand more pay too. Wages within a firm need to be structured in a fair way according to experience and performance. An inexperienced newbie must earn less money than experienced staff. If businesses don’t follow that logic, they stand to lose their older staff. 

As the small cohort of Gen Z enters the workforce, the large Baby Boomer generation is retiring. This further increases the desperation in understaffed businesses to attract young talent. 

Isn’t Australia a migration nation?

Can’t we import workers from overseas? After all, this seems to have worked in the past? 

The problem is that the world is slowly running out of humans. According to the United Nations, which produces the gold standard in population forecasts, the global human population will peak in 2086. Other population institutions are more bearish and think we might see peak humanity as soon as the 2060s. Even if we listen to the more bullish UN data, as soon as 2039 we will see the relevant global population of migration age (18-39) peak. 

For Gen Z that means the global pool of migrants is drying up as they progress in their careers. Consequently, Gen Z will face much less competition in their job searches than any generation before them. This will put them in an excellent negotiating position throughout their whole career.

We might even go as far as to speculate whether Gen Zs ascent to the top (they will take over top leadership positions in the 2050s) will lead to the end of competition.

Financially, Gen Z should face a secure future since they will work in an environment dictating high wages.

Decentralised but cooperative

Gen Z is the first generation that grew up with iPhones in their hands. Independence is at the core of the way Gen Zs operate, having always had the ability to learn for themselves with ease. 

They are used to thinking about global issues like climate change. Big systemic challenges can’t possibly be solved through simplistic siloed thinking, according to Gen Zs who grew up on the internet and have been exposed to challenging ideas and attitudes from so many walks of life.

Gen Z is coming of age in an Australia where strong efforts were made to lift Australia as a whole rather than people fighting just for themselves - even if it felt to some the latter prevailed. The young generation is experiencing the pandemic, lockdowns, remote education, and increased geopolitical uncertainty in their formative years. 

If there is any generation that stands a chance to integrate a multitude of perspectives into their worldview, that is intellectually equipped to tackle big systemic issues, it is Gen Z.

This might well be the end of zero-sum worldview. Metaphors of viewing the world as a complex machine will be phased out in favour of viewing the world as a complex ecosystem where everything must be in balance.

Under the leadership of Gen Z in the 2050s society’s goal might be the balance and prosperity of the system rather than just one’s own prosperity.  

Pursuing your whole career in times of relative labour shortage isn't all positive.

The most obvious way for an economic system to increase worker productivity is always to have the current workers put in longer hours. While I am super optimistic about the economic outlook for Gen Z, I am not at all optimistic that they will achieve their high-minded goals regarding work-life balance.