Know what is the In thing now

Is a $74,850 Salary Really “Middle Class” for Gen Z?

Gen Z, salary, middle class, societal standards, income perception, Newsweek survey, Pew Research Center, millennials, Gen Xers, Baby Boomers, viral conversation, Orlando-based realtor, TikTok video.

An Orlando-based realtor, Freddie Smith, ignited a viral conversation on TikTok when he shared a study that revealed Gen Z’s perspective on what constitutes a “middle-class” salary.

Based on a Newsweek survey of 1,500 participants, the study found that only 41% of Gen Z respondents believed that a $74,850 annual salary could be classified as “middle class.” This figure, deemed sufficient for previous generations, falls within the range of $38,133 and $114,400, as defined by the Pew Research Center.

The video has gained over 8 million views and has sparked a broader discussion among different generations regarding the evolving concept of “middle class” income. While millennials (50%), Gen Zers (61%), and Baby Boomers (73%) were more likely to agree with the traditional notion, Gen Z’s contrasting viewpoint highlights the changing dynamics of economic perception and societal standards.

Is $74,000 Enough for Financial Stability?

Freddie Smith, the Orlando-based realtor whose TikTok video sparked a discussion on the perception of “middle class” income, noted that despite the fact that $74,000 is higher than the average Gen Z salary, it may not be sufficient for achieving financial stability.

According to a SmartAsset analysis of Bureau of Labor Statistics data from the third quarter of last year, the median salary of a 25-to-34-year-old in the US was $52,156. Smith then proceeded to break down the monthly expenses of a “financially responsible” Gen Zer who earns an annual salary of $74,000. After taxes, health insurance, and 401K investments, the monthly take-home pay is approximately $4,300. Smith factored in estimates for rent, groceries, student loans, car payments, phone bills, and leisure expenses.

The result was a mere $650 left over at the end of the month, making home ownership an unattainable goal for most Gen Zers.

Rising Expectations and Financial Realities

Commenters on TikTok expressed their dismay at the perceived discrepancy between income and living costs, reflecting the rising expectations of Gen Z regarding salary. One commenter wrote, “100k is the new 45k,” highlighting the increasing cost of living. Another viewer shared their own experience, saying, “I’m 23 and making 73k, reflect on this often.” 

They went on to mention how their father was able to raise three children, own a house, and go on vacations with a slightly higher salary, emphasizing the contrast between previous generations’ lifestyles and current financial realities. These comments echo the sentiment that many Gen Zers believe that their income is not sufficient for achieving financial stability and the traditional markers of success.

This study is not the only one shedding light on Gen Z’s rising salary expectations. Another study conducted last year concluded that Gen Zers feel the need to make $125,000 per year in order to feel like they have “made it.” However, some individuals interviewed by Business Insider disagreed with this figure after considering additional expenses such as childcare and housing. This highlights the complex factors that contribute to Gen Z’s evolving financial expectations and sheds light on the challenges they face in establishing financial security and achieving their definition of success.

You might also be interested in

Get the word out!