Gen Z graduates are facing an increasingly tough reality after tossing their caps into the air: Not only are their skills being outpaced by ChatGPT, but they aren’t getting raises consistent enough to splurge on anything more than an oat-milk latte.
But there’s now a new nail in coffin: Their non-degree friends working as bartenders and baristas are seeing bigger pay raises than they are. Wage growth in leisure and hospitality is outpacing white-collar jobs, flipping the script on where young workers can find earning momentum.
A new analysis by Bankrate found hospitality workers’ wages have risen by nearly 30% since 2021, outpacing inflation by more than 4%. Health care workers have similarly outpaced inflation and seen their salaries go up by around 25% in the past four years.
However, those working in professional and business services, the finance industry, and education have not seen wage gains that keep up with inflation. Teachers, for example, are pacing at nearly 5% below inflation.
Yet, Gen Z isn’t likely to flock to work at the local pub or Starbucks.
White-collar jobs such as entry-level tech gigs still come with larger paychecks—averaging at $19.57 an hour in the U.S. But in the hospitality industry, an average barista makes about $16 dollars per hour. Still, since inflation first spiked a few years ago, wages have still been falling behind for white-collar workers. Workers in retail, trade, health care, leisure, hospitality, and food services making less per hour, are watching their paychecks grow more over time.
The white-collar freeze
Across the white-collar job market, workers—especially fresh-faced graduates like Gen Z—are being hit with another tough reality: Workers in white-collar financial activities or professional and business services are encountering a slower pace of hiring.
While entry-level workers crave the glam of tech offices and cold brew on tap, just this week, Meta paused hiring for its new artificial intelligence division, ending a spending spree that saw it acquire a wave of costly AI researchers and engineers, and included signing bonuses of $100 million. Amazon CEO Andy Jassy also has said in addition to “efficiency gains,” he expects AI could mean white-collar job cuts.
And it’s not just desk workers who are being challenged. Education saw the biggest wage gap relative to inflation, followed by construction.
And even if Gen Zers are lucky enough to land that tech job of their dreams, their promotions may not follow. A recent survey found that promotion rates have slowed after surging during the Great Resignation. The overall promotion rate was 10.3% in May 2025, down from a peak of 14.6% in May 2022.
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