Why 68% of Gen Z Can’t Perform at Work (It’s Not What You Think)

The narrative is everywhere: Gen Z workers are entitled, lazy, uncommitted. They job hop constantly. They don’t want to work hard. They’re killing workplace culture.

But here’s what almost nobody is talking about: 69% of Gen Z workers are living paycheck to paycheck, up from 57% just two years ago. They’re not underperforming because they lack ambition. They’re struggling because they’re drowning financially, and it’s destroying their ability to function at work.

When you’re choosing between groceries and gas, when you can’t afford an unexpected $400 expense, when your monthly student loan payment is $526, your brain literally can’t focus on optimizing that quarterly report. This isn’t about work ethic. This is about survival mode.

By the end of this article, you’ll understand the real numbers driving Gen Z’s workplace struggles, why this isn’t a character flaw but an economic crisis, and what both workers and employers can do to address the actual problem.

The Numbers Tell the Real Story

Let’s start with the paycheck-to-paycheck crisis. According to PYMNTS Intelligence research, the share of Gen Z consumers living paycheck to paycheck leaped from 57% in January 2023 to 69% in January 2025. That’s a 12 percentage point increase in just two years.

This puts Gen Z significantly higher than the overall population, where 66% live paycheck to paycheck. And it’s not because they’re making poor financial choices. Half of Gen Z workers earn hourly wages, making their income inherently unstable month to month due to unpredictable shifts and fluctuating business needs.

Interview Guys Tip: If you’re currently living paycheck to paycheck and need to make a career change, don’t wait until you have a “comfortable” financial cushion. It might never come. Instead, focus on strategic moves that increase your earning potential without requiring you to quit your current job first. Side skills, certifications, and networking can all happen while you’re still employed.

Deloitte’s 2025 Gen Z and Millennial Survey reveals that 48% of Gen Zs report feeling financially insecure, up dramatically from 30% in 2024. Among those living paycheck to paycheck, 80% cite both long-term financial stability and everyday spending as primary sources of stress.

The Entry-Level Job Drought Compounds Everything

Here’s where the crisis deepens. As we documented in our analysis of how 29% fewer starting positions are forcing Gen Z into career workarounds, entry-level job postings have plummeted.

According to the World Economic Forum’s analysis of 126 million global job postings, entry-level roles have fallen by 29 percentage points since January 2024. This isn’t a minor correction. Nearly one-third of starting positions have simply vanished.

The result? Gen Z is settling for jobs that don’t align with their career goals. Almost half say their current role doesn’t fit their long-term ambitions. They’re moving between jobs faster than any previous generation, with an average tenure of just 1.1 years in their first five years of work, compared to 1.8 years for millennials.

This isn’t flakiness. It’s desperation. When traditional entry points don’t exist and the jobs that do exist don’t pay enough to live on, you have to keep moving to survive.

Student Debt Hits Gen Z Hardest

The financial pressure doesn’t stop at low wages and limited opportunities. Student debt is crushing this generation in ways previous cohorts never experienced.

Gen Z workers pay an average of $526 per month in student loans, according to Empower’s research. That’s nearly double the overall average payment of $284. For context, that’s often more than a car payment, and it’s money that could otherwise go toward building an emergency fund or saving for a home.

While Gen Z’s average debt balance is lower than older generations at around $22,948 per BestColleges data, their debt is growing faster than any other generation at a 6.72% compound annual rate. They’re graduating into a world where college costs have risen dramatically, but starting salaries haven’t kept pace.

13.1 million Gen Zers carry student loan debt, representing 43.5% of Gen Z adults. Among borrowers under 30, 61% report experiencing stress or anxiety related to their student debt. This isn’t background noise. This is a constant mental burden affecting every financial decision.

The Mental Health Crisis at Work

Here’s where financial stress and workplace performance collide. When you can’t pay your bills, your brain literally can’t perform at its best. This isn’t weakness. This is neuroscience.

According to research from Seramount, 72% of Gen Z workers report experiencing at least one symptom of burnout, such as exhaustion or feeling unmotivated. The Deloitte survey found that 40% of Gen Zs feel stressed or anxious all or most of the time, with 35% citing their job as a significant contributor.

But here’s the critical finding: 48% cite their longer-term financial future as the most significant contributor to their stress.

It’s not the work itself that’s burning them out. It’s the crushing reality that they’re working hard and still can’t get ahead. They can’t save. They can’t plan for the future. They’re stuck in survival mode.

Among Gen Z workers with positive mental well-being, 60% report being satisfied with their lives. Among those with poor mental well-being, only 28% report life satisfaction. The difference? Financial security.

Our research on inside Gen Z workers’ shocking confidence collapse shows that this financial stress manifests as reduced workplace confidence, lower productivity, and higher turnover. When you’re worried about making rent, you can’t focus on career advancement.

The Perfect Storm: Why This Generation Is Different

Previous generations faced challenges, but Gen Z is navigating a unique convergence of crises:

• Rising costs without wage growth: Housing costs now consume 51% of after-tax income, up from 33% in 2000. Healthcare accounts for 16%, up from 10%. Food prices rose 25% between 2020 and 2024. Meanwhile, advertised wages in job postings grew just 2.5% year-over-year, running behind inflation.

• The AI job displacement: Entry-level positions that used to provide career ladders are being eliminated or automated. The grunt work that previous generations used to learn on the job is now handled by AI, removing the stepping stones to higher positions.

• Student debt at record levels: Total student loan debt now exceeds $1.7 trillion, and 12% of borrowers are currently in default. Gen Z is entering the workforce with more debt and fewer job opportunities than any generation before them.

• No safety net: 47.9% of Gen Z cannot cover a $1,000 emergency expense with cash. When unexpected costs hit, they turn to credit cards, payday loans, or simply go without, creating a cycle that’s nearly impossible to escape.

What This Means for Employers

If you’re an employer wondering why Gen Z seems “difficult” or “uncommitted,” consider this: you might be asking people who are barely surviving financially to perform at peak capacity.

When 61% of Gen Z workers say they would strongly consider leaving for a job with significantly better mental health benefits, they’re not being entitled. They’re being strategic. They need support that previous generations took for granted.

The companies that will win Gen Z talent are those that:

• Offer genuine financial wellness programs, not just token EAP access
• Provide clear, fast paths to salary increases and promotions
• Support flexible work that helps workers manage multiple income streams
• Create cultures where discussing financial stress isn’t taboo

What Gen Z Workers Can Do Right Now

If you’re living this reality, here are concrete steps that can help:

• Build any emergency fund, no matter how small: Even $500 gives you negotiating power. You can say no to exploitative job offers. You can leave toxic situations. Start with $25 per paycheck if that’s all you can manage.

• Pursue strategic career changes: Don’t stay in a dead-end job hoping things improve. Our guide on how to change careers in 2025 shows how to make transitions even when you’re financially strapped.

• Master salary negotiation: The difference between accepting the first offer and negotiating can be $5,000 to $10,000 annually. Use our salary negotiation email templates to advocate for yourself.

• Leverage your adaptability: Gen Z’s ability to learn quickly and embrace new technologies is valuable. Position yourself as someone who can work with AI, not compete against it. This is your competitive advantage.

• Network strategically: You can’t wait for perfect job postings to appear. Our guide on how to find a job fast explains how to tap into the hidden job market where opportunities exist before they’re posted.

• Prioritize mental health: You cannot pour from an empty cup. If your workplace offers mental health benefits, use them. If not, seek low-cost or free resources. Your ability to work depends on your mental health.

The Bigger Picture: This Isn’t About Entitlement

When we look at Gen Z workers struggling at work, we need to stop attributing it to character flaws and start recognizing the economic reality.

This generation is facing:

• 69% living paycheck to paycheck
• 29% fewer entry-level jobs than two years ago
• Student loan payments averaging $526 per month
• Housing costs consuming over half their income
• No realistic path to traditional financial milestones

And then we’re surprised when they can’t perform at work with the same focus as previous generations who had living wages, affordable housing, and actual career ladders to climb?

The data makes it clear: this isn’t an entitlement problem. This is a structural economic crisis affecting an entire generation’s ability to function at work.

Moving Forward

The good news? Recognition of the problem is the first step toward solutions. More employers are beginning to understand that financial stress isn’t a personal problem, it’s a business problem. Workers who are financially stable are more productive, more loyal, and more creative.

For Gen Z workers, understanding that your struggles aren’t personal failures is liberating. You’re not bad with money. You’re not lazy. You’re navigating an economic landscape that’s fundamentally different from what previous generations experienced.

The path forward requires both systemic changes and individual strategies. Employers need to pay living wages and create genuine pathways to advancement. Workers need to advocate for themselves, build financial resilience where possible, and make strategic career moves.

Most importantly, we need to stop pretending this is about avocado toast or poor work ethic. The data is clear: Gen Z is in financial collapse, and it’s destroying their ability to perform at work. Until we address the actual problem rather than blaming the victims, nothing will change.

If you’re struggling with this reality, know that you’re not alone. The system is broken, but that doesn’t mean you’re broken. Focus on what you can control, seek support where you can find it, and keep pushing forward. The financial collapse hitting Gen Z workers is real, but so is your resilience.

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