A generation splitting between those earning more and those earning nothing
For the first time since the postwar generation, young workers in Britain are beginning their careers on firmer financial ground — a quiet but meaningful reversal of the millennial wage stagnation that followed the 2008 collapse. Research from the Resolution Foundation finds that Gen Z workers at 24 earn 12% more in real terms than millennials did at the same age, lifted in part by successive minimum wage increases. Yet this progress is uneven and precarious: inflation and weak growth threaten to erode the gains, while roughly one million young people remain entirely outside work, education, or training — a shadow cohort for whom the rebound has not arrived at all.
- After two decades of wage stagnation that hollowed out millennial living standards, Gen Z's early earnings represent the strongest generational start since the 1950s — a genuine, if fragile, turning point.
- The gains are sharpest at the bottom: the lowest-earning workers saw real pay jump 36% between 2012 and 2025, driven by steep minimum wage rises that began in 2016 and disproportionately lifted young people.
- Inflation, weak economic growth, and geopolitical instability are already pressing against these gains, raising the prospect that the rebound could be reversed before it fully takes hold.
- Behind the headline progress lies a deepening fracture — approximately one million 16-to-24-year-olds are not in employment, education, or training, and that figure could rise 25% to 1.25 million by the early 2030s without intervention.
- Economists and former ministers are calling for urgent government action, warning that celebrating the pay rebound without addressing the Neet crisis risks mistaking a partial recovery for a generational one.
A 24-year-old entering the workforce today earns 12% more in real terms than a millennial did at the same age — the strongest career start for any generation since the 1950s, according to new research from the Resolution Foundation. It marks a striking reversal after nearly two decades of wage stagnation that defined the millennial experience.
Millennials were the first generation in modern memory to earn less than their predecessors, their timing catastrophic: they entered the job market as the 2008 financial crisis unfolded and never fully recovered. The decade that followed brought growth so sluggish that disposable incomes flatlined rather than climbed.
Gen Z's experience has been measurably different. The gains have been sharpest at the bottom of the income ladder — workers in the lowest 10% of earners saw real pay jump 36% between 2012 and 2025, driven largely by successive minimum wage increases, particularly the steep rises beginning in 2016. Senior economist Charlie McCurdy called it a "mini pay rebound" for a generation many feared would repeat the millennial pattern.
Yet the optimism carries a sharp caveat. Real wages face downward pressure from inflation and weak growth, conditions worsened by geopolitical instability, and the gains of recent years could easily evaporate.
More troubling is the shadow side of the picture. Around one million young people aged 16 to 24 are currently outside employment, education, or training. Without urgent intervention, that figure could surge 25% to 1.25 million by the early 2030s. The Resolution Foundation warns that for a significant share of younger Gen Z members, careers have not got off the ground at all.
The story is ultimately one of divergence — a generation splitting between those earning more and those not working at all. The pay rebound that headlines will celebrate masks a deeper fracture, and addressing it, the Foundation argues, must become a top government priority.
A 24-year-old entering the workforce today is taking home a paycheck that would have seemed impossible to their millennial counterparts at the same age. New research from the Resolution Foundation reveals that young workers born in the late 1990s are earning 12% more in real terms than those born a decade earlier—the strongest start to a career for any generation since the 1950s. It's a striking reversal after nearly two decades of wage stagnation that defined the millennial experience.
The millennials, those born between the early 1980s and mid-1990s, became the first generation in modern memory to earn less than their predecessors. Their timing was catastrophic: they entered the job market just as the 2008 financial crisis was unfolding, and they never fully recovered. The decade that followed brought wage growth so sluggish it barely moved. By the time the economy stabilized, an entire cohort had already lost ground they would never regain. Disposable incomes that should have climbed with age instead flatlined.
Gen Z's experience has been measurably different. Those born between 1997 and 2012 have benefited from a modest but real rebound in pay packets. The gains have been sharpest at the bottom of the income ladder. Workers in the lowest 10% of earners saw their real pay jump 36% between 2012 and 2025, driven largely by successive increases to the minimum wage, particularly the steep rises that began in 2016. Young workers aged 22 to 29 on median earnings saw hourly pay grow by 15% over that same period—a far cry from the 4% growth experienced by those in their 30s or the 11% average across all workers.
Charlie McCurdy, senior economist at the Resolution Foundation, described the finding as "good news" for a generation that many feared would repeat the millennial pattern. "The living standards stagnation of the millennial generation has been well documented," he said. "Many speculated that breakdown would continue for gen Z. But with the oldest members now several years into their working lives, they've enjoyed a mini pay rebound."
Yet the optimism comes with a sharp caveat. The report warns that this nascent recovery is already fragile. Real wages face downward pressure from inflation and weak economic growth, conditions exacerbated by geopolitical instability in the Middle East. The gains of the past few years could easily evaporate if those headwinds intensify.
More troubling still is the shadow side of the Gen Z employment picture. Roughly one million young people aged 16 to 24 are currently outside employment, education, or training—a category known as Neets. That figure alone represents a significant portion of the generation. But the trajectory is worse. Alan Milburn, a former Labour minister, warned last month that without urgent government intervention, Britain could see the Neet population surge 25% to 1.25 million by the early 2030s. The Resolution Foundation echoed the alarm, noting that "for a significant share of younger members of gen Z, their careers have not got off the ground at all."
The story, then, is one of divergence. Some young people are experiencing genuine economic progress. Others have fallen out of the system entirely. The pay rebound that headlines will celebrate masks a deeper fracture: a generation splitting between those who are working and earning more, and those who are not working at all. Addressing that split, the Foundation argues, should be a top government priority. Without action, the gains for some risk becoming a footnote to a much larger crisis.
Citações Notáveis
The living standards stagnation of the millennial generation has been well documented. Many speculated that breakdown would continue for gen Z. But with the oldest members now several years into their working lives, they've enjoyed a mini pay rebound.— Charlie McCurdy, senior economist, Resolution Foundation
For a significant share of younger members of gen Z, their careers have not got off the ground at all. Britain's Neet crisis presents a huge, long-term challenge for gen Z, and tackling it should be a top priority for the government.— Resolution Foundation
A Conversa do Hearth Outra perspectiva sobre a história
Why does Gen Z's pay bump matter if we're talking about a generation that's still in its 20s? Isn't it too early to know if this is real?
Fair question. But the age 24 benchmark is actually significant—it's when career trajectories start to solidify. If you're already 12% ahead at that point, compound that over 40 years of work. The millennial generation never caught up from their early setback. This could be the difference between a generation that builds wealth and one that doesn't.
But you mentioned the gains are already under threat. How real is that threat?
Real enough that the researchers felt obligated to flag it prominently. Inflation and weak growth are already eating into wages. If the Middle East situation worsens or spreads economically, those gains could reverse quickly. We're not talking about a structural fix—we're talking about a window that might close.
What about the million young people not working or in school? How does that fit into the story?
It's the other half of the picture. You have some Gen Z workers doing better than their parents did at the same age. But you also have a million young people completely outside the system. They're not earning 12% more—they're earning nothing. And the projection is that number could grow by a quarter in the next few years.
So the headline is misleading?
Not misleading exactly, but incomplete. It's true that Gen Z at 24 is earning more. But it's also true that a significant chunk of Gen Z isn't earning at all. Both things are happening simultaneously. The question is whether the government treats the pay gains as a reason to relax, or as a reason to urgently address the million young people falling through the cracks.
What would actually fix the Neet problem?
The research doesn't prescribe solutions—it just says the crisis needs to be a top priority. But implicitly, you're looking at education access, job training, mental health support, maybe incentives for employers to hire young people with gaps in their work history. The fact that it's projected to get worse suggests current policy isn't working.