Every generation tends to regard its successor as something of a disappointment. Now, as members of the Gen Z cohort (those born between 1997 and 2012) enter the workforce globally, it is their turn in the spotlight.
Gen Z’s apparent scepticism about work, wealth and financial institutions is widely regarded as evidence that they are entitled, lazy or emotionally fragile — and altogether ill-equipped for the demands of the modern workplace.
Yet behavioural economics offers a simpler explanation. What looks like apathy could, in many cases, be a rational response.
As the first generation raised entirely in the internet era, these “digital natives” have, unsurprisingly, taken to social media to vent their frustrations with the economic realities they have inherited. Their embrace of trends such as “quiet quitting” and “acting your wage” is less a rejection of ambition than a recalibration of effort in a world where the traditional rewards for hard work feel increasingly out of reach.
It’s not just a Western phenomenon. In the years since the pandemic, China’s “lying flat” (tang ping) movement has emerged as a quiet form of resistance to intense social and economic pressure. Japan has its “Satori Generation” and South Korea its “N‑po Generation”. Around the globe, these trends share a common thread: a retreat from traditional ambitions such as marriage, parenthood and home ownership — milestones now widely viewed as unrealistic, if not entirely unattainable.
Historically, adulthood tended to follow a predictable script. You studied, worked hard and were rewarded with a secure job, rising wages and a steady career progression. This would be achieved with a single long‑term employer or across a series of employers over the course of a career. Work represented more than a source of income. It was also widely viewed as the primary engine of upward mobility. Milestones such as moving out of your parents’ home, buying a house and starting a family were seen as desirable and predictable outcomes.
For previous generations, home ownership provided the cornerstone of financial security and the primary route into the middle class. (Even though, for most, the ownership was illusory — for those who took out mortgage bonds, the bank owned the house for years). The implicit promise was simple: diligence would translate into progress, stability and eventually a comfortable retirement.
However, today’s young adults are finding that the foundational bargain has changed. While still facing unchanged requirements — study and work hard — the returns on these efforts seem to have dwindled. While work still delivers an income, though not necessarily one that keeps pace with the cost of living, it is proving increasingly ineffectual in delivering financial security.
The cost of living in general, and housing costs in particular, have decoupled from earnings
Over the past two decades, the cost of living in general, and housing costs in particular, have decoupled from earnings. Job security has evaporated and the promise of linear career progression has morphed into contract work, stagnant real wages and a perpetual hustle to stay afloat.
Retirement funding has shifted from defined-benefit to defined-contribution schemes, replacing institutional guarantees with individual risk. This is not a technical adjustment but a symbolic withdrawal of protection, a transfer of uncertainty onto households and a blow to the belief that playing by the traditional rules will be rewarded.
The same is true of medical aid cover, which is increasingly confined to hospital insurance plans. Even then, there is the growing need for gap cover — additional insurance to cover the shortfall between specialists’ fees and what medical schemes will pay.
While every generation has lived through some measure of change in the workplace, the environment confronting today’s young adults is radically different. The labour market they are entering is the product of fundamental structural shifts. Technology has automated and reconfigured many areas of mid-skill employment (from travel agents to bank tellers and call centre staff), pushing new entrants into a labour market that offers fewer career paths, lower-paid service work and far more competition for the remaining stable roles.
While older workers can use established skills and institutional knowledge to harness AI to boost their productivity, younger workers are increasingly being denied the opportunity to gain that experience. Instead, they are vulnerable to being displaced by technology.
Recent announcements of layoffs by US corporate giants such as Amazon (about 30,000 jobs in 2025/2026) and UPS (78,000 jobs in 2025/2026) show how quickly AI‑driven efficiencies are reshaping headcounts, as automation takes over tasks once performed by people.
South Africa is experiencing similar trends, with banks closing branches as customers migrate online, retailers and logistics companies expanding automated stock management systems and even the public sector adopting automated assessments and digital submissions.
Yet the fundamental shift in the workplace experienced by young workers — notably the erosion of pay, stability and loyalty — reflects the consequences of a wide range of factors beyond the impact of technological innovations such as AI.
Over the past two decades there’s been a series of seismic economic shocks: the global financial crisis (2007-2009), the eurozone sovereign debt crisis (2010-2015), the pandemic (2020-2023) and the ensuing inflation shock (the fastest global surge in 40 years), culminating in the convulsive Trump-driven rupture of the global world order we are now witnessing.
This constant series of upheavals has prompted companies to restructure via aggressive cost-cutting and automation. In part this reflects the speed of the structural shift towards shareholder primacy that has accelerated since the 1980s.
Historically, large companies operated under the “managerial capitalism” model in which control was exercised by professional, salaried managers rather than the owners (shareholders). With dispersed ownership and limited shareholder oversight, managers prioritised long‑term growth, stability and organisational survival. Firms typically balanced the interests of employees, communities and customers alongside profits, which was just one of several objectives.
In the 1980s, corporate governance began to shift towards shareholder primacy — the belief that a company’s primary purpose is to maximise returns to its owners. This was driven by deregulation, the growing power of financial markets and the spread of Chicago School economics, with its faith in free markets, minimal government intervention and the disciplining force of competition.
This shift has been reinforced by the rise of equity-based executive pay and globalisation, which encouraged companies to minimise labour costs and prioritise quarterly performance. Employees were increasingly viewed as a cost centre to be contained rather than a long-term asset to be nurtured and developed.
Understanding that transition gives clarity to why work feels so different today. As companies become leaner, more flexible and more willing to shed staff, workers are forced to absorb — and adapt to — the resulting uncertainty.
Far from it being a lifestyle preference, many have been forced to adopt flexibility as a survival tactic
Faced with an endlessly volatile economy, young adults are adopting a new mode of work — shifting from a predictable single-employer career path to a portfolio career: a range of part-time roles, freelance contracts, gig work and entrepreneurial hustle. Far from it being a lifestyle preference, many have been forced to adopt flexibility as a survival tactic.
As the traditional milestones of financial stability, upward mobility and retirement slip further out of reach, and full-time work, disciplined saving and delayed gratification no longer deliver these milestones, young adults have lost faith in the entire economic bargain. If home ownership — one of the most important markers of adulthood — is unattainable, then the fundamental tenet that hard work leads to financial stability quickly begins to look like a fiction.
Faced with stagnant wages and insecure work, it is hardly surprising that many young adults are adopting a pragmatic, almost defensive mindset: focus on the present and invest in experiences and skills that offer immediate value. This should not be viewed as recklessness. but as an adjustment to shifting economic realities.
This trend has been highlighted in a recent paper by two US-based economists, Seung Hyeong Lee (Northwestern University) and Younggeun Yoo (University of Chicago). Their research suggests that young people are in fact responding in an entirely rational manner.
The paper, Giving Up: The Impact of Decreasing Housing Affordability on Consumption, Work Effort, and Investment, is based on a study of card transactions, wealth and attitudes of Americans. It concludes that increased leisure spending, reduced work effort and investment in risky financial assets — including crypto — are all disproportionately common among young adults facing little to no real prospect of owning a home.
Their research suggests that as the prospect of attaining home ownership declines, households’ behaviour undergoes a systematic shift. Consumption rises relative to wealth, work effort declines and the appetite for riskier investment increases. These responses compound over the life cycle, resulting in far wider wealth gaps between those who retain hope of home ownership and those who have given up.
According to Lee and Yoo’s research, young adults who already own a home — or stand a reasonable chance of purchasing one — tend to take fewer risks and apply themselves more diligently at work.
The shift in behaviour of those with little prospect of home ownership has been described by US-based media entrepreneur and financial analyst Demetri Kofinas as “financial nihilism” — essentially a profound loss of faith in the intrinsic value of traditional financial systems and conventional investment practices. It is fuelled by the belief that the traditional path to financial security has collapsed.
The financial strain is now spilling into new forms of behaviour. One striking example is the expansion of Polymarket, a cryptocurrency‑based prediction market, into real estate. The platform allows users to speculate on daily movements in US housing prices using real-time indices. Analysts see this as a symptom of deepening financial nihilism: when ownership becomes unattainable, speculation becomes the only remaining way to engage with an asset class that has slipped beyond reach.
Late last year, a Financial Times reporter extended Lee and Yoo’s analysis to the UK, revealing a strikingly similar pattern. Young British renters with little chance of saving for a deposit on a home purchase showed a greater appetite for financial risks — including online betting — compared to those who are already on, or within reach of, the housing ladder.
This dynamic is also increasingly visible among young South Africans. Young adults enter a labour market in which unemployment among under-24s reached 58.5% in the third quarter of 2025 and where stability and upward mobility are increasingly rare.
According to the 1Life Generational Wealth Youth Survey (2024), more than half of young earners do not know how to build a financially secure future. About 45% of young South Africans are relying on social media for financial information. The Eighty20 Credit Stress Report shows similar strain: 40% of all credit defaulters are under 35, despite this group holding only 17% of total credit. This behaviour is not due to apathy, but because long‑term planning feels futile in the face of rising living costs and stagnant wages.
Yet this does not mean that most young South Africans are financially reckless. Encouragingly, research from the Standard Bank Youth Barometer, Old Mutual’s Savings & Investment Monitor and 1Life’s Generational Wealth Survey all point to a Gen Z cohort who are cautious with money, inclined to save when they can and wary of taking on debt. However, where financial risk-taking does emerge, it is often linked to emerging investment trends such as crypto, and to spending on personal image — which many young people view as an economic asset in an intensely competitive labour market.
Growing financial pessimism among South Africa’s young adults is also fuelling a surge in online gambling. Industry data shows double-digit annual growth in online betting, with youth uptake rising faster than in any other group. Universities report more students seeking help for gambling-related distress, much of it linked to sports betting. Research from the South African Responsible Gambling Foundation indicates that many young people gamble not for entertainment but rather as a coping mechanism for financial pressure – a pattern consistent with rising financial nihilism.
Given how housing unaffordability has become so central to young people’s financial behaviour, it’s useful to examine the structural forces that have pushed ownership out of reach globally for so many young adults.
Home ownership has become increasingly unaffordable since the late 1990s and early 2000s, as easy credit, financial deregulation and the growing financialisation of housing (the transformation of homes from primarily being a place to live into a financial asset used to store and growth wealth) drove rapid house price inflation. As residential property became more attractive to investors and global capital markets, prices decoupled from local wages, leaving most households with incomes that failed to keep pace.
The global financial crisis, triggered by the implosion of a US housing bubble built on cheap credit and financial engineering, accelerated these trends. While the initial crash briefly depressed house prices, it ushered in a decade of ultra‑low interest rates, quantitative easing and asset inflation that drove housing costs sharply higher.
In many countries, home ownership became even more unattainable as cheap money fuelled investor demand and deepened the financialisation of housing. Though the precise timing varied across markets, the broad pattern of worsening affordability has been remarkably consistent worldwide.
International evidence shows that the deterioration in affordability since 2008 has been widespread as well as stubborn. IMF Global Housing Watch data indicates that price‑to‑income ratios (a widely recognised indicator of housing affordability) have worsened across most major economies, with the US, China, Germany and the UK now facing tougher affordability conditions than at the height of the pre‑global financial crisis boom.
Post‑pandemic interest rate hikes coincided with severe housing supply shortages, further tightening the squeeze. UN‑Habitat and the Global Housing Data Initiative highlight similar strains across Asia, Latin America and Africa, where rapid urbanisation continues to outpace the growth of formal housing stock. The picture that emerges is a synchronised global affordability crunch, fuelled by structural undersupply, elevated borrowing costs, and a widening disconnect between house prices and household incomes.
In the early 2000s, as house prices began to decouple from wage growth, parental assistance started to play a growing role in helping young adults enter the housing market. After the global financial crisis, when credit standards tightened and deposits surged, the “Bank of Mom and Dad” expanded into a major, shadow source of housing finance in many countries. By the mid-2010s, across markets such as the UK and Australia, it was effectively matching the lending volumes of many formal financial institutions. As affordability eroded and families stepped in to bridge the funding gap, homeownership became less about individual effort and more about inherited advantage.
South Africa is exhibiting similar strains, though the underlying forces differ somewhat from those driving the global squeeze. In many advanced economies, worsening affordability is being driven primarily by sluggish wage growth that is failing to keep pace with soaring house prices. Locally, the squeeze is shaped less by asset inflation and more by structural constraints: weak income growth, persistently high borrowing costs (partly a function of a higher inflation rate), entrenched inequality and a chronic undersupply of new housing — particularly in the affordable segment — which keeps ownership out of reach, even without the extreme levels of house price inflation seen in advanced economies.
South Africa also lacks the intergenerational wealth buffers that have softened the blow for young adults elsewhere. Few local families can replicate the role of the Bank of Mom and Dad in many advanced economies, given the extreme concentration of asset ownership. This further widens the divide between those with asset-rich parents and those without.
The scale of the housing supply shortfall in South Africa highlights the severity of the challenge. Since 2000, South Africa’s population has grown by about 18-million people (to an estimated 63.1-million people, according to Stats SA’s midyear estimate in 2025) but has built only about 2.3-million formal homes — roughly eight new people for every one new house. While planned building activity has rebounded from early 2025 lows, driven in part by a surge in entry-level homes in the Western Cape, total residential building plans passed last year remained nearly 4% below 2024 levels. This clearly continues to fall well short of the required pace of delivery.
Increasingly, the risks that were once shared across society have been shifted to individuals
Young adults face the steepest hurdles, amplified by an unemployment rate that remains among the highest globally. Stats SA’s General Household Survey points to increasing dependence on informal dwellings and overcrowded rentals — clear markers of affordability pressures and a persistent shortage of formal stock.
Recent research by market analytics company Lightstone underscores the severity of South Africa’s formal housing shortage. It estimates that there are nearly 12-million households, about 67% of the total, earning less than R13,000 a month. Assuming households spend no more than a third of their income on housing, there are fewer than 2.5-million properties they could afford. That equates to just one formal home for every 4.8 households in this income band.
Even when the income threshold is raised to R26,000 a month, the picture remains bleak: the ratio improves only to 3.3 households per available property. Lightstone’s analysis shows that more than 80% of South African households fall below the R26,000 income level. The shortage forces millions into backyard rentals, informal structures or traditional dwellings that are not formally registered and are often far from employment hubs and economic opportunity.
Long before Canadian Prime Minister Mark Carney warned at Davos of a rupture in the world order, the social contract had already begun to fray amid the slow unravelling of the belief that work, saving and discipline would reliably translate into financial stability. Increasingly, the risks that were once shared across society have been shifted to individuals, who now face the market with little systemic support.
As affordability erodes and mobility stalls, financial nihilism takes root: a quiet, corrosive belief that the system has stopped working and that its promises no longer hold.
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