Gen Z to Flood Employers With Raise Requests

Employees are seen at their desks. As overall inflation remains sticky, with a current rate of 3.1 percent, coupled with skyrocketing housing prices, the financial pressures on young Americans are mounting.

Generation Z workers in the United States are gearing up for a year of salary negotiations amid persistent inflationary pressures and economic uncertainty.

According to a survey issued Monday by the American Staffing Association (ASA) and Harris Poll, two-thirds—66 percent—of employees aged 18 to 27 intend to request a raise in 2024, a determination that mirrors a broader sentiment of financial resilience among younger workers navigating economic challenges with an assertive approach.

The findings, drawn from a sample of over 2,000 U.S. adults, reinforce a survey run by Redfield & Wilton Strategies for Newsweek in December which found that Gen Z workers were the least likely to consider $74,000 a “middle-class salary,” with just 41 percent thinking this.

Their perspective of that salary, in the poll of 1,500 eligible American voters, contrasted with older generations’ view of it: 50 percent of millennials, 61 percent of Gen X, and 73 percent of baby boomers aligned with that traditional economic marker.

The reevaluation by Gen Z and subsequent preparedness to ask for a raise this year comes at a time of concern, according to Richard Wahlquist, CEO at the ASA. The backdrop of worker sentiment is marked by a consumer price index (CPI) that rose more than expected in January, largely driven by stubbornly high shelter prices which rose 0.6 percent month over month and 6 percent year over year.

As overall inflation remains sticky, with a current rate of 3.1 percent, coupled with skyrocketing housing prices, the financial pressures on young Americans are intense.

“The data may project a soft landing for the economy, but the bank accounts of America’s workers are telling a different story,” Wahlquist said in a statement shared with Newsweek by email.

It’s Not Just Gen Z

In an economy grappling with evolving labor dynamics and persistent inflation, workers outside of Gen Z are confronting the reality of paychecks that struggle to keep pace with the cost of living. Sixty-seven percent of millennials, 51 percent of Gen X, and 42 percent of boomers also intend to ask their bosses for a raise this year, according to the ASA.

“U.S. workers are stressed about the adequacy of their paychecks and their ability to save for their future,” Wahlquist said in the statement.

The data echoes a broader narrative of economic pressure, where interest rate hikes by the Federal Reserve aim to temper inflation but simultaneously strain household budgets. Wage growth, while still positive, has slowed, ADP said, reporting a deceleration in wage increases for workers from 5.4 percent in December to 5.2 percent last month.

A large portion of all generations—50 percent of Gen Z, 53 percent of millennials, 41 percent of Gen X, and 40 percent of boomers—believe their paychecks are not keeping up with inflation, according to the ASA, suggesting that the American workforce is struggling to secure wages that match rising prices.

While the Fed’s efforts to tame inflation with its monetary policy adjustments have largely worked, rates continue to exceed its 2 percent target. That persistence of inflation, especially in housing and rental costs, compounds the financial challenges faced by many workers.

According to the Joint Center for Housing Studies of Harvard University, 50 percent of workers are spending 30 percent or more of their income on rent and utilities, and roughly half of that group are severely burdened by housing costs, with over half of their income dedicated to housing expenses.

“At a time of significant macroeconomic and geopolitical uncertainty, employers must be very strategic when it comes to alleviating worker concerns over their long-term professional and financial goal,” ASA’s Wahlquist said.

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