How Younger Generations are Leading Social & Economic Recovery

An aptitude and hunger for technology and creativity amongst younger generations are fueling an economic recovery in America as industries institute morphing sales strategies during and after a global pandemic. 

The CEO of American Express, the popular credit card, sales Gen Z and Millenials are spending more now than they were pre-pandemic as they fill job positions opened by a shrinking workforce. In fact, Business Insider reports that younger Americans are spending 25 percent more than they were pre-pandemic which is driving America’s economic recovery. 

Economic forecasters will offer varying assessments of what this means for the long-term economy, but young Americans welcome adoption of technology to drive commerce is a good sign for an economic system increasingly reliant on a digital commerce revolution. 

Millennials are now America’s wealthiest generation, so their spending habits offer signs of hope that the country will have a K-shaped recovery capable of growing the world’s largest economy. 

Barclays surveyed business leaders about their attitude toward the shift toward younger generations driving consumer spending, and they offered optimism that such a trend would engender a healthy American economy. Thirty-four percent of business leaders were aware of the significant role that…”the younger generation in particular will play in helping businesses survive and thrive in a post-Covid-19 world. The most common reasons why they believe this are their energy and enthusiasm (51 percent), aptitude for technology (46 percent), and creativity (40 percent).”

Younger Americans are also returning to the skies to realize their dreams of traveling, but business travel still lags behind pre-pandemic levels. Gen Z and Millennial spending is helping bridge the gap left by the significant amount of corporate travel and convention spending that is not currently happening -- or at best, lagging far behind pre-pandemic levels. 

American Express continues to join other credit card companies in offering incentives for spending on travel and dining. Their gamble is that those are two areas Americans are ready and willing to spend in again. 

The increase in spending among younger Americans does not mean that they have not felt economic upheaval as well. The National Women’s Law Center suggests there are nearly a million fewer Millennial women in the workforce now compared to pre-pandemic levels. The generational wealth gap that the Great Recession exacerbated was not fully fixed pre-pandemic, so those without jobs now face economic pressures born of two of their generation's greatest stressors. 

The Federal Reserve Bank of St. Louis found in their research that millennials’ average wealth in their early 30s ($140,600) lagged behind Gen Xers ($152,000) and baby boomers ($221,100) when they were around the same age.

However, Americans opting to go to a new job or leave the workforce altogether has opened the door for Gen Z and Millennials to fill the void left in the workforce and experience faster wage growth than before the pandemic. That is partly responsible for their new spending habits. Early retirements left a throng of open positions that would have come open more slowly had the pandemic not forced some Americans’ hands. 

This change in the workforce drives America’s economy forward with innovation, creativity and a batch of fresh ideas. In both the workforce and at the cash registers, America’s economic recovery lies in the hands of its youngest adult generations. 

Perhaps more than anything, Gen Z influences how and where Americans spend their money. Their preferences are quickly pushing the world further into the digital age where access to goods and services lies at your fingertips, whenever and wherever you want it.