Gen Z Is Now Out-Earning Millennials at the Same Age, Here's Why

A new analysis from the Resolution Foundation, reported by The Guardian, found that Gen Z is now out-earning the millennials who came before them at the same age. Real weekly pay at age 24 for people born in the late 1990s was 12 percent higher than for those born in the late 1980s, and by 25 this cohort was earning more than any generation born since the 1950s. The reasons are a tighter labour market and a decade of minimum wage hikes, not luck. At Metaintro, we track what these shifts mean for your paycheck and your next negotiation. Here is why early-career pay is climbing, and the big catch behind the headline.

What Did the Resolution Foundation Actually Find?

The Resolution Foundation is a UK think tank focused on living standards for low and middle income households, and its latest research, summarized in a 21 June 2026 press release from senior economist Charlie McCurdy, lands a genuinely surprising headline. For years the story about young workers has been one of stagnation and bad luck. This research flips part of that narrative. It found that real weekly pay at age 24 for those born in the late 1990s, the older edge of Gen Z, was 12 percent higher than for cohorts born in the late 1980s. Put plainly, today's mid-twenties workers are starting from a higher base than the millennials directly ahead of them.

The numbers go further. By age 25, Gen Z workers were earning more than any cohort born since the 1950s did at that age, once you adjust for inflation. That is a striking reversal, because millennials are described in the same analysis as the first generation not to have enjoyed higher disposable incomes than the generation before them. Their careers kicked off around the 2008 financial crisis, and the long real-wage stagnation that followed scarred their early earnings for years. We have written about how a weak first job market can dent graduate pay for years, and millennials are close to a textbook case of that scarring effect. Gen Z, by timing and policy, has so far avoided the worst of it.

Why Is Gen Z Out-Earning Millennials Right Now?

The single biggest driver is the minimum wage. Over the past decade, the UK has pushed up its wage floor aggressively, and that lands hardest on young workers who are clustered in lower-paid roles. The National Living Wage rose to 12.21 pounds an hour in April 2025, and again to 12.71 pounds in April 2026. The increases for the youngest workers have been even sharper. The rate for 18 to 20 year-olds jumped 16.3 percent in 2025, from 8.60 to 10.00 pounds, worth roughly 2,500 pounds a year to a full-time worker on that rate, before climbing again to 10.85 pounds in 2026. When the floor rises that fast, the people standing on it see the biggest gains.

The second driver is a tighter post-pandemic labour market. When employers compete harder for workers, entry-level pay rises faster, and young people who are early in their careers feel that pull most. The Resolution Foundation also points to broad-based gains at the bottom. The lowest tenth of earners saw real pay climb 36 percent between 2012 and 2025, and workers aged 22 to 29 on median earnings recorded a 15 percent rise in hourly pay over the same period. None of this is about Gen Z being smarter negotiators, although that matters too. It is about the structural conditions, the wage floor and the demand for labour, that surrounded their first jobs. That is the same logic behind why real wages began shrinking in other developed economies when those conditions reversed.

Does Education or Sector Explain the Gap?

It is tempting to credit Gen Z's edge to more degrees or hotter sectors, but the research points mainly at policy and labour-market timing rather than a sudden leap in qualifications. Each generation has entered work more educated than the last, and that long trend supports pay, but it does not explain a 12 percent jump at age 24 on its own. The minimum wage and the tight labour market do the heavy lifting. What education does change is the floor under your expectations. A more credentialed cohort knows roughly what its skills are worth, which feeds into how confidently it asks for pay. For a sense of how today's youngest workers think about that first offer, our look at what the class of 2026 wants from their first job is a useful read.

Sector mix matters at the margins. Young workers concentrated in hospitality, retail, and care saw the most direct benefit from minimum wage rises, because those industries sit right on the wage floor. Workers who moved early into higher-paying fields rode the tight labour market instead. The point for your own planning is that the generational average hides huge variation. A nominal headline that Gen Z out-earns millennials does not mean your specific role or region is keeping pace, which is exactly why knowing your market rate matters more than knowing your generational average. If you are mapping your own field, our guides on what software engineers earn by level and city and what registered nurses earn by state and specialty show how wide those ranges run inside a single job title.

What Is the Big Catch Behind the Headline?

Higher pay does not mean an easier life, and this is where the cheerful headline needs a heavy asterisk. The same young workers earning more are also facing some of the steepest costs in a generation. Cost of living has been the top concern for Gen Z and millennials for five years running, according to Deloitte's 2026 Gen Z and Millennial Survey. In the UK, around 40 percent of both generations report living payslip to payslip, and globally about 47 percent of respondents say they live paycheck to paycheck. A bigger number on the payslip gets eaten by rent, food, and bills before it ever becomes savings. We have covered how Gen Z and millennial money anxiety is quietly draining productivity, and the data behind this study is exactly why that anxiety persists even as wages rise.

Housing is the sharpest edge of that catch. Higher earnings have not kept pace with the cost of getting a foot on the housing ladder, so the pay gains feel thinner than they look on paper. The research also flags fresh threats ahead. Higher prices and weaker economic growth, driven in part by global conflict, are threatening a renewed squeeze on real wages, and private-sector real pay growth had already started slipping. So the Gen Z advantage is real, but it is fragile. It rests on a tight labour market and a rising wage floor that could both soften. Understanding that fragility helps explain why so many young workers feel broke despite earning more than the generation ahead of them, a tension we unpack in our piece on why your 2026 life is on subscription and what it does to your salary math.

Who Is Being Left Out of the Gen Z Pay Story?

The averages only count people who are actually working, and that is a crucial blind spot. The Resolution Foundation flags that the number of 16 to 24 year-olds not in employment, education, or training has climbed to around one million, a level not seen in over a decade. For everyone in that group, the rosy pay headline is meaningless, because you cannot benefit from rising wages if you cannot get into a job in the first place. The gains are concentrated among those who cleared the hardest hurdle, the first role, and that hurdle has gotten higher for many young people. We have written about the uncertain job market facing young graduates in 2026 and why a brutal entry point can shape earnings for years.

This split is the real generational story. It is not simply Gen Z up, millennials down. It is a divide between young workers who got in and are riding strong wage growth, and young workers shut out of employment entirely. Entry-level roles have also been thinned by automation in some fields, a dynamic we track in our coverage of how AI is reshaping entry-level jobs. If you are still trying to land that first job, the pay story is a reason for optimism about what awaits once you are in, but it does not lower the barrier to entry. That is why the practical advice below focuses as much on getting hired as on getting paid.

How Should This Change Your Pay Expectations?

The most useful takeaway is about anchoring. If you are early in your career, the worst reference point for your salary is what an older colleague or relative started on, because the wage floor and the labour market have shifted underneath those numbers. A senior coworker who began at a far lower entry salary is not a guide to your worth today, they are a guide to conditions a decade ago. Anchor instead to current market rates for your role, level, and location. The data showing Gen Z out-earning millennials is, at its core, proof that starting pay is not fixed by tradition, it moves with the market, and the market right now favors workers who know their number.

That means doing the homework before you ever sit down to negotiate. Look up real ranges for your specific title and city, factor in the cost of living where you will actually work, and walk in with a number you can defend with evidence. Our guide on how to negotiate your salary and get a higher offer in 2026 walks through exactly how to build and present that case. One growing habit among workers worth copying is screening out employers who hide pay. A majority of candidates now skip job postings without a salary range, which forces transparency and saves you from undervaluing yourself before the first conversation even starts.

What Does This Mean for Your Career?

The Gen Z pay rebound is encouraging, but the real lesson is how to act on it rather than just feel good about it. Here is how to put it to work:

The headline gains came from structural forces, the minimum wage and a tight labour market, so treat your own pay as something shaped by conditions you can read, not a fixed value handed to you. When the market is hot for your skills, that is the moment to ask for more or to move, because the same forces lifting Gen Z averages can lift your specific paycheck if you act on them.

Do not let a strong generational headline make you complacent about cost of living. Earning more than the cohort ahead of you still leaves you exposed if rent and bills outrun your raises, so build the cost side into every pay decision, especially when comparing offers across different cities. A higher gross number in an expensive market can leave you worse off than a smaller number somewhere cheaper.

If you are shut out of the job market rather than inside it, focus your energy on clearing that first hurdle, because the wage gains are waiting on the other side of it. Building visibility, networking deliberately, and applying widely matter more than perfecting a negotiation for an offer you do not yet have. For workers already inside, the move is to keep your skills current and your market knowledge sharp, so that when the labour market shifts again, and it will, you are positioned to negotiate from strength rather than react from fear. Our breakdown of the salary expectation gap facing the class of 2026 is a useful reality check on where your number should actually sit.

Related Articles

• Why a Brutal First Job Market Can Dent Graduate Pay for Years, and How to Fight It
• How to Negotiate Your Salary and Get a Higher Offer in 2026
• The $24K Salary Gap, Why Class of 2026 Grads Expect Way More Than Employers Will Pay
• How Gen Z and Millennial Money Anxiety Is Quietly Draining Office Productivity
• The Uncertain Job Market Facing Young Graduates in 2026
• Real Wages Begin Shrinking Across Developed Economies in 2026
• 60 Percent of Workers Now Skip Job Postings Without a Salary Range
• What Software Engineers Actually Earn in 2026 by Level and City
• What Registered Nurses Earn in 2026 by State and Specialty
• Why Your 2026 Life Is on Subscription, and What That Means for Your Salary Math
• What the Class of 2026 Actually Wants From Their First Job
• AI Is Wiping Out Entry-Level Jobs in 2026, 7 Moves Early-Career Workers Are Using to Stay Ahead

People Also Asked

Q: Is Gen Z really earning more than millennials at the same age?

A: Yes, at least in the UK. Resolution Foundation analysis found real weekly pay at age 24 for people born in the late 1990s was 12 percent higher than for those born in the late 1980s, and by 25 this group earned more than any cohort born since the 1950s. The main drivers are steep minimum wage rises and a tight post-pandemic labour market, not a sudden jump in qualifications.

Q: If Gen Z earns more, why do so many feel broke?

A: Because cost of living has outrun the pay gains. Around 40 percent of young UK workers report living payslip to payslip, and housing costs in particular have climbed faster than wages. A higher gross paycheck gets eaten by rent and bills before it becomes savings, so a real pay rise can still feel like standing still, especially in expensive cities.

Q: How should this affect my salary expectations?

A: Anchor your number to current market rates for your role and location, not to what older colleagues started on years ago. The whole point of the research is that starting pay moves with the market, so research live ranges, factor in local cost of living, and negotiate from evidence rather than tradition or guesswork.

Wondering what you should earn in a market that is quietly shifting in young workers' favor? The Gen Z pay rebound proves that starting salaries are not fixed, and the workers who benefit most are the ones who know their number and ask for it. Join Metaintro for salary data, negotiation playbooks, and career insights from Metaintro that help you turn a hot labour market into a bigger paycheck.