Young people are rich and miserable

Is Gen Z's Doordash habit to blame for its economic woes?

Zoomers make more money at their age than any generation before them. Yet they’re also the most economically pessimistic.

On Monday, a clip of Canadian businessman Kevin O’Leary went viral after the Shark Tank star railed against Gen Z for buying $28 lunches rather than saving and investing.

Many commentators took the opportunity to engage in boomer-style “avocado toast” politics, bashing the younger generations and blaming all their woes on their lack of responsibility. “This is why you’ll never own a home” was a common refrain.

Others defended Gen Z, sometimes bizarrely: Leftist commentator Sean Padraig McCarthy insisted, with no evidence, that “lunch just costs $28 now,” while social media gadfly Taylor Lorenz claimed that younger people lack the time and capacity to cook for themselves.

The easy thing to do would be to point out how silly some of these defenses are, laugh, and move on. No, lunch does not cost $28. Please be serious. Yes, young people have the ability to cook for themselves, just like every other generation.

But if we look beyond the cheap dunks, the statistics behind the debate are more revealing than the noise emanating from social media blowhards. Gen Z does eat out (broadly defined as any food not prepared at home) more than any other generation — sources as varied as Canadian credit union reports, Bank of America internal data, and the Bureau of Labor Statistics all agree that zoomers spend a higher percentage of their food budget at restaurants. Notably, groceries, despite inflation, are more affordable than ever when compared to wages.¹

Given that Gen Z is the youngest working generation and thus has the lowest current income level and food budget, they’re spending the highest percentage on restaurants. Are the “avocado toast” folks correct? Are zoomers throwing away their chance to own a home and retire because they’re eating out too often?

The real picture is more complicated:

First, America is very rich. In 1933, families spent 25% of their disposable income on food, almost all of it staple groceries eaten at home. Today, food spending (as a share of disposable income) is near an all-time low. Less than 5% of disposable income is spent on food eaten at home, and another 5.5% is spent on food away from home. This decline holds even if you restrict the data to younger households.