Wages in the United States have been largely stagnant since the 1970s, especially when compared with productivity. As a CNBC article from last year notes, “Between 1979 and 2020, workers’ wages grew by 17.5% while productivity grew over three times as fast at 61.8%.”
This gap between earnings and productivity is felt especially hard by young people. Despite having more education, millennials tend to earn less than generations that came before them—and among Gen Z, 53% see the high cost of living “as a barrier to financial success,” writes author Lorie Konish.
These issues were compounded by both the 2008 financial crisis and the fiscal, physical, and mental shock that was the COVID-19 pandemic.
As noted by The Economist, “These two big shocks have fostered pessimism among the young people who experienced them. A study by McKinsey, a consultancy, published in 2022, found that a quarter of Gen Zs doubted they would be able to afford to retire. Less than half believed they would ever own a home.”
However, these low wages haven’t stopped millennials and Gen Z from spending. That same piece in The Economist notes how spending habits have changed. Young people are more likely to buy products they’ve discovered on social media as well as using buy-now-pay-later services. Additionally, travel took up a good portion of young people’s expenses.
Seeing this spending, some in older generations may wonder why young people aren’t appearing to be saving money. Now, a user on TikTok has gone viral after sharing her answer.
In a video with over 978,000 views as of Sunday, TikTok user Maria Melchor (@firstgenliving) details why young people can be seen with nice things or taking trips while not having much money to spend.
“When older people ask me how young people are affording nice things that they wouldn’t even buy for themselves, I tell them it’s because we can’t afford anything else,” she states.
“Homeownership or starting a family is so out of reach that we’re using that down payment or kid money on whatever it is we can’t afford that’ll bring us a semblance of the kind of adulthood we were promised,” she continues. “When houses are a million dollar plus and an older couple will likely outbid us anyway, we’re gonna relinquish any lingering delusions about homeownership.”
Instead, she jokes that young people will use their limited funds to “give our dogs the most enriched puppyhood they can have.”
@firstgenliving #zillennial #dink ♬ original sound – Maria Melchor | FirstGenLiving
In the comments section, users largely agreed with her assessment.
“We’re all doom-spending now,” summarized a commenter.
“My mother asking me when I’m gonna stop traveling and buy a house. I can’t afford a house but I can travel,” shared another.
“Future is not guaranteed, is crumbling before our eyes,” explained a third. “Enjoying what we have while we can is the way to go.”
“Lol spent $2000 on a couch bc I live in a studio as a 28 yr old full time attorney bc it’s all I could afford,” admitted a further TikToker.
The Daily Dot reached out to Melchor via email.
