Gen Z may be facing tough times right now, but according to a new report from Bank of America, this generation is poised to become the richest in history by 2035. Despite grappling with high unemployment, soaring living costs, and a challenging job market, those born between 1997 and 2012 are expected to amass over $74 trillion in income by 2040, transforming them into a global economic powerhouse.

Struggling Today, Soaring Tomorrow

Today, Gen Z finds itself struggling to achieve traditional milestones, like homeownership and starting families. According to Bank of America, 32% of Gen Zers feel they are financially behind where their parents were at the same age. Many are burdened by student debt, rising housing expenses, and an increasingly competitive job market.

But despite these hurdles, Gen Z continues to spend heavily, often splurging on experiences, holidays, concerts, and pets rather than saving for homes or retirement. Bank of America’s report describes them as “a generation of spenders”, whose fast-paced consumption of both essential and discretionary items is already outpacing other demographics.

The Great Wealth Transfer & Wage Growth

Two major trends are expected to power Gen Z’s financial ascent:

1. Wage Growth

Gen Z has just begun entering the full-time workforce, and with it comes higher wages. Bank of America’s data shows that Gen Z’s wage growth was nearly 8% year-over-year in February, the fastest of any generation and double the overall median.

2. The Great Wealth Transfer

By 2045, an estimated $84 trillion will be passed down from Baby Boomers to Gen X, Millennials, and Gen Z. Of that, Gen Z is expected to inherit a whopping 38%, representing a massive shift in wealth that will further solidify their financial standing.

Overeducated, Underemployed—For Now

Despite high levels of education—57% of Gen Zers aged 18 to 21 were enrolled in college as of 2022, compared to 53% of Millennials at the same age—the generation is often described as “overeducated and underemployed.”

Unemployment among new labor market entrants, many of whom are Gen Z, was up 9% year-over-year in February 2025. Meanwhile, Gen Z households receiving unemployment benefits increased by 32% over the past year.

Still, higher education is expected to pay off in the long term, driving higher-paying careers and economic mobility as they age.

Gen Z’s Growing Spending Power

In 2024, Gen Z’s spending is projected to reach $2.7 trillion. By 2030, that figure is expected to skyrocket to $12.6 trillion, as their wages grow and their influence over consumer trends expands. They’re already reshaping industries with their preferences for:

  • Luxury goods
  • Tech gadgets
  • Personalized beauty
  • Wellness
  • Pet care
  • E-commerce platforms

Companies like Shein, Glossier, TikTok, Depop, and Chewy are thriving by catering to Gen Z’s evolving tastes.

“Gen Z will redefine what it means to be a U.S. consumer,” Bank of America researchers wrote. “Whether it’s due to changing diets, reduced alcohol consumption, or their approach to saving and housing, their economic impact will be profound.”

What’s Next?

As President Trump’s policies create uncertainty about the future of the U.S. economy, including fears of a potential recession, the short-term outlook for Gen Z could remain rocky. Rising unemployment and layoffs might continue to weigh on the generation in the near term.

But by 2035, Bank of America predicts Gen Z will overtake all previous generations in wealth, becoming a dominant force in economies, markets, and social systems worldwide.

Bottom Line:
Gen Z’s journey from a struggling, overeducated, and underemployed cohort to a financial juggernaut is already underway. With the twin engines of wage growth and intergenerational wealth transfer, they’re on track to rewrite the rules of global consumerism and economic power.

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