America’s two-track economy is indeed leaving Generation Z (Gen Z) behind, perpetuating wealth and income disparities that have been growing over the past several decades. This phenomenon is characterized by significant differences in economic outcomes between the wealthiest and the poorest segments of the population, particularly among younger generations like Gen Z.
Wealth Inequality
Wealth inequality in the United States has been increasing steadily since the 1960s. The wealthiest families have seen their wealth grow significantly faster than that of middle-class and lower-income families. For instance, between 1963 and 2022, the wealthiest families saw their wealth increase more than sevenfold, while those near the bottom of the wealth distribution went from having $23 in debt to $450 in wealth. This widening wealth gap is attributed to various factors, including the massive transfer of wealth from the middle class to the wealthiest families, as well as systemic barriers to wealth accumulation faced by marginalized communities.
Income Inequality
Income inequality is another significant issue in the United States. The richest 1 percent of households have seen their income grow significantly faster than that of the bottom 20 percent. In 2020, the richest 1 percent averaged 104 times more income than the bottom 20 percent, according to the Congressional Budget Office. This trend is attributed to various factors, including the decline of labor unions, the erosion of fair taxation, and the increasing power of those at the top to rig economic rules in their favor.
Impact on Gen Z
Gen Z, born between 1997 and 2012, is particularly affected by these economic trends. They are more likely to face limited job opportunities, lower wages, and reduced access to wealth-building mechanisms such as homeownership and retirement savings. As a proportion of the young labor force, the youth unemployment rate represents the number of jobless individuals aged 15 to 24 and has been a persistent issue in many countries, including the United States. This can lead to reduced economic mobility and increased financial insecurity for Gen Z.
Policy Solutions
To address these issues, policymakers can implement various solutions. These include:
- Sustained, High-Quality Employment: Providing stable and well-paying jobs throughout a person’s life can help reduce income and wealth disparities.
- Education and Training: Supporting educational and training opportunities can help bridge the skills gap and increase economic mobility.
- Combatting Wage Discrimination: Implementing policies to detect and combat wage discrimination can help reduce income disparities.
- Federal Job Guarantee: Ensuring anyone who wants a job can access one can help reduce unemployment and increase economic security.
- Sector-Based Skills Training: Offering training in in-demand jobs can help Gen Z develop valuable skills and increase their employability.
- Baby Bonds and Reparations: Implementing policies like baby bonds or reparations for Black American descendants of slavery can help address historical wealth disparities and promote greater economic equity.
Conclusion
America’s two-track economy is leaving Gen Z behind, perpetuating wealth and income disparities that have been growing over the past several decades. To address these issues, policymakers must implement comprehensive solutions that promote sustained employment, education, and training opportunities, as well as combat wage discrimination and ensure greater economic equity.
