Comparing the costs of generations

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Gen Z faces tough financial road and mediocre pay

It’s common for older generations to say they had things harder than “kids these days.” But that old adage doesn’t align with the data, especially when you compare the cost of living for Gen Z with that of baby boomers when they were in their twenties.

To find out just how much tougher Gen Z has it in terms of cost of living, we analyzed data from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, the National Association of Realtors and the Education Data Board and determined how prices have changed relative to inflation since 1970. As it turns out, avocado toast isn’t the only reason younger generations may struggle to make ends meet and save for the future.

Buying power decline over decades

Young Americans in 2022 face many financial challenges, but chief among them is the standard cost of living against today’s rate of pay. Despite wages increasing since 1970, they haven’t even come close to keeping up with the massive increase in the cost of goods over the last 50 years.

The American dollar went a lot further in 1970 than it does today. With inflation adjustments to the average wages in 1970, the typical American income in today’s dollars was $24,600 per year, but that generation had a low average consumer price index (CPI) of 38.8. Wages steadily rose over the next 30 years until the average annual income jumped to $38,700 in 2000, amounting to a 57% increase in average pay.

Americans have enjoyed an 80% increase in wages since 1970. However, these gains haven't been enough to keep up with ever-inflating living costs. Gen Z dollars today have 86% less purchasing power than those of baby boomers when they were in their 20s.

Meanwhile, the price of goods had skyrocketed in this time: The average CPI more than quadrupled from 38.8 to 172.2. This trend only worsened as time went on.

Wages declined by 7.5% between 2000 and 2010, and the CPI rose by over 25% as the country dealt with the 2008 economic recession. Incomes couldn’t keep up with the cost of living, which hindered young people’s ability to save money and make typical purchases for their stage of life.

To put it in terms of a dollar’s worth, Gen Z’s money has 86% less buying power than baby boomers’ did at the same age. As of 2022, the national CPI has increased by over 500% since 1970, while wages have only increased by 80%. And though unemployment fluctuated quite a bit over that time, the rates were still lower in the 2020s than in the 1970s.

Housing breaks the bank

The cost of American housing rose rapidly over the last few years, reaching a boiling point in 2022. Coupled with recent rises in inflation, this uptick in prices led the Federal Reserve to raise interest rates several times, leaving homebuying costs out of reach for many Americans. But that doesn’t mean houses were comparatively affordable in previous years, either; they’ve been trending toward unaffordability for some time.

In today's dollars, Gen Zers and millennials are paying nearly 100% more on average for their homes compared with what baby boomers paid in the 1970s.

Although apparently Gen Z would rather own a home than rent, they face a much tougher homebuying market than baby boomers did in the 1970s. The median home price in 2022 — $370,600 — is nearly double that of 1970 ($185,600, adjusted for inflation). This trend could be partly due to the rising CPI, but some argue that baby boomers are causing a supply issue by staying in their homes longer than other generations.

Americans priced out by high housing costs and increasing interest rates are forced to stay in rentals that are becoming just as costly, if not costlier, than a mortgage. The median rent is up 150% from 1970, and spending so much money on rent makes it difficult to save for a home — and even though housing prices dropped between 2005 and 2010 during the Great Recession, the median rent didn’t decrease.

These circumstances have created an endless struggle for Gen Z: They’re having to pay unreasonably high rent while trying to save for homes that are becoming increasingly more expensive.

Tuition costs rise faster than pay

Housing prices aren’t the only factor deterring younger generations like Gen Z and millennials from homebuying; many are also saddled with student loan debt. College tuition rates have risen much faster than income rates over the last 50 years, contributing to one of the biggest debt crises in the U.S., with over $1.7 trillion owed by former students in 2022.

The price for one year of tuition at a public four-year college has gone up 310%, from $2,768 on average in the 1970s to $11,360 in 2021.

When it comes to a private four-year college, the price for one year of tuition has gone up 245% from $12,078 on average in the 1970s to $41,646 in 2021.

The percentage of students graduating from college has increased by 254% since 1970.

A college degree has become both less valuable and more expensive recently. As of 2021, the number of graduating students had increased by 254% since 1970 (when many baby boomers were in college), arguably making a degree less valuable in terms of standing out from the crowd. And while the annual cost of public tuition is up 310% (private tuition is up 245%), these degrees are now more expected than they once were, with most employers requiring them.

Younger generations also face higher stakes; boomers were among a much smaller group of college-educated Americans, making their degrees more valuable in the job market.

Many Gen Z college students go into debt to pay for college, only to graduate into a saturated job market offering rates that fall short of the cost of goods and housing. The prospect of meeting milestones like getting a degree, finding a job, owning a home and someday retiring can seem far-fetched at best.

Prices at the pump skyrocket

Salaries have failed to keep up with the cost of other goods, like gasoline, as well. With most American employees driving themselves to work, this necessary cost cuts into earnings and makes saving money harder on Gen Z than it was on older generations.

Gen Zers and millennials are paying 57% more per gallon of gas than baby boomers did in their 20s.

Historically, gas prices have fluctuated based on demand and several other factors. Although prices were fairly high in 1980, they stayed relatively stagnant for most of the 1980s and 1990s until spiking in the early 2000s. In 2022, gas prices experienced a meteoric rise due to the Russian invasion of Ukraine and the increased demand stemming from the global easing of COVID-19 pandemic lockdowns.

As a result, Gen Z and millennials are paying nearly 60% more than baby boomers did in their twenties for gasoline.

Spikes in regular expenses like gasoline have caused anxiety among Americans and made it difficult for many to get ahead financially. When coupled with inflation, cost of goods and high rent and home prices, increased gas prices can be especially stressful for young people trying to support themselves and reach financial milestones.


The factors we’ve discussed affect most Americans’ wallets, but they can be especially hard for young people going out on their own for the first time. High living expenses and comparatively low incomes create difficult hurdles for them to overcome.

Despite a low unemployment rate in 2022, those who manage to get decent-paying jobs are burdened by debt from their expensive educations — whether public or private — and face increasingly high-price goods and housing costs.

Also, we live in a more expensive world than that of the 1970s, one that (nearly) requires a high-end cell phone and internet service in order to get by. Today’s youth must get creative or work harder to get ahead. As social media users say: The struggle is real.


For this campaign, we pulled data from the following sources to explore how prices and the average life of baby boomers in their twenties (1970s) compared to the life of the average American in their twenties today:

We used the CPI Inflation Calculator from the U.S. Bureau of Labor Statistics to adjust every dollar value to that of today.

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