Gen Z workers in the UK are now earning more than millennials did at the same age, according to new analysis by the Resolution Foundation. The study found that 22-year-olds in 2024 earned a median hourly wage of £15.50, compared to £14.20 for millennials at the same age in 2014, representing a 9% increase after adjusting for inflation.
Strong Wage Growth for Young Workers
The Resolution Foundation's report attributes the trend to a tight labour market and strong wage growth since the pandemic. Young workers have benefited from record low unemployment and competition among employers, pushing up starting salaries. The analysis shows that for those aged 22 to 29, median hourly pay in 2024 was £16.40, up 8% from £15.20 for the same age group a decade earlier.
However, the gains are not uniform across all groups. The report highlights that young men have seen larger wage increases than young women, and that those with degrees have fared better than those without. For 22-year-old men, median hourly pay rose 12% in real terms over the decade, compared to 6% for women.
Impact of Labour Market and Policy Changes
The Resolution Foundation notes that the National Living Wage increases and tight labour market have particularly boosted pay for younger workers. The foundation's economist, Hannah Slaughter, said: "The strong labour market and policy changes have helped young people get a better start in their careers than their predecessors. But it's not all good news – the cost of housing and other essentials has risen sharply, eating into these gains."
Despite higher earnings, young people still face significant financial pressures. The report points out that house prices and rents have grown faster than wages over the same period, making it harder for Gen Z to afford homes. Private rents for under-30s have increased by 15% in real terms since 2014, according to the analysis.
Regional Disparities
The study also reveals regional variations. Young workers in London and the South East earn significantly more than those in other parts of the UK, but also face higher living costs. In London, median hourly pay for 22-29 year olds was £19.50 in 2024, compared to £14.00 in the North East. The gap has widened slightly over the decade, the report says.
Overall, the Resolution Foundation concludes that while Gen Z's higher earnings are a positive sign, they do not fully offset the increased cost of living, especially housing. The foundation calls for policies to address housing affordability and regional inequalities to ensure that young people can translate higher pay into improved living standards.
