Indeed small businesses rule the economy these days, and this youngest generation of adults wants in on the action. But why has there been such a shift in the attitudes of this generation compared with previous generations? There are a number of factors that all point to one thing: independence.
Millennials Got The Short End Of The Stick, And Gen Z Has Taken Notice
Parents can no longer afford to send their kids to college as easily as they once did, and the result has been dire. Millennials are graduating college into the worst wage stagnation in decades while at the same time being saddled with enormous student loan debt.
The number of student borrowers has increased dramatically over the last few decades, as has the amount of debt each borrower takes on. And you can never bankrupt that debt, leaving an entire generation carrying an enormous financial burden they can’t get out from under – an average of more than $30k per person upon graduation from a 4 year institution. Generation Z has taken note and is changing courses to avoid the fate of Millennials at all costs.
Freelancing Is On The Rise
More than a third of the workforce are freelancers, a lifestyle once reserved for writers and photographers. Technology has made it easier for freelancers to find and complete work, freeing them up for what many consider to be a more independent lifestyle. According to a 2016 study about freelancing in America conducted by Upwork, Freelancers:
- Are adding about a million more people to their ranks every year
- Contribute about a trillion dollars to the economy each year
- Typically choose freelancing as a lifestyle over a 9 to 5
- Overwhelmingly believe their lifestyle is better than a 9 to 5
- Typically earn more as a freelancer than they did as an employee
Freelancers are able to choose which projects to work on instead of being told by a boss. They can work where they want and when they want, as much or a little as they want. If they need a change of scenery most freelance gigs can travel with the freelancers thanks to the technology available today. They can set their schedules to work around family needs or when they feel they are the most productive.
Small Businesses Are A Boon To The Economy
According to a Small Business Administration study done in 2012, small businesses:
- Make up 7% of all U.S. firms
- Account for 64% of new jobs in the private sector
- Account for nearly 50% of employment in the private sector
- Account for 43% of payroll in the private sector
- Export 98% of goods
- Account for a third of the value of exported goods in the United States
Whether they choose to own small businesses or to work for them, chances are most of this generation will end up in the small business sector in one way or another. If you had to choose, wouldn’t you choose to be the boss?
But What About College?
Gen Z has grown up watching success stories of people like Bill Gates and Mark Zuckerberg dropping out of college to eventually become billionaires, but is that setting an unrealistic example?
To be sure, college graduates earn considerably more money in their lifetimes than non college graduates – 99% of jobs replaced since the start of the Great Recession have required a college degree, and 57% of wages go to workers with a college degree.
But the biggest advantage to not going the traditional college route is the lack of student loan debt. Student loan debt can prevent you from being able to follow your dreams, and the independence of living debt free and being able to pursue your passions is too much of a draw for Gen Z to ignore.
Most of Generation Z is still planning to go to college, but what they will do when they get out is still up in the air. By some estimates freelancing will account for nearly half of all jobs in just a few years, and the lifestyle is too attractive to ignore. College can help Generation Z pursue their entrepreneurial goals as long as they can figure out how to manage to pay for it.
College Is Important But It Isn’t Everything
Getting real world experience as early as possible is crucial to being able to develop and run your own business. Over half of high schoolers say their parents are pressuring them to gain professional experience while they are still in high school, but less than half of parents actually help their kids to do so. Gaining real world experience as early as possible is just as important as anything you will learn inside a classroom.
Is skipping college and starting your own business the right decision for you? There are certainly many success stories out there that would indicate this path does work for some folks, but it’s important to remember that these are the exceptions rather than the rules. Learn more about how Generation Z is skipping school and making their own way from this infographic from Online Schools Center.