Members of Gen Z workforce in South Africa have seen their salaries fast outpaced by inflation, and are battling to keep up with soaring rental and transport costs, as well as high student loan repayments.
This widening gap has eroded their purchasing power, leaving many Gen Z graduates reliant on family support well into adulthood.
This is according to a study compiled by The TEFL Academy, a UK-based organisation that helps English speakers qualify to teach English as a foreign language.
It drew on data from Stats SA, National Treasury, the Quarterly Labour Force Survey and the Household Affordability Index, using inflation-adjusted benchmarks across housing, transport, education, groceries and debt to paint a generational picture of how graduate affordability and purchasing power have shifted relative to income.
Adjusted for inflation, the report found that graduate salaries have fallen by 21% since 2008, even as living expenses have soared. Over the same period:
- housing costs have increased by 160%;
- transport by 481%; and
- essential groceries by 233%.
As a result, younger South African workers are looking abroad for earning opportunities, the research found.
When Millennials were entering the job market nearly two decades ago, the report found that more than half of graduate vacancies offered starting salaries of between R6,250 and R8,333 a month, with top positions paying just above R14,500. By comparison, today’s graduates typically earn between R5,800 and R9,000 during internships, a marginal nominal growth, despite significant increases in living costs.
What we’ve seen over time is our business has continued to grow, but in the last few years it’s really accelerated, especially in South Africa. That shows us that more and more young people are choosing TEFL as a career choice when they get out of university.
— Ryhan O’Sullivan, MD at The TEFL Academy
Since 2005, average monthly rent has surged 473%, from R1,500 to R8,598, while student debt has tripled, with average NSFAS loan balances rising from R30,000 to R90,000, and average tuition fees climbing from R20,000 to R62,000.
Meanwhile, youth unemployment remains among the highest in the world at 46%. “When combined with deposits, utilities, and transport costs, this leaves little to no financial margin, making independent living increasingly out of reach, and forcing many Gen Z professionals to rely on shared accommodation or family support, a stark reversal of the financial autonomy many millennials enjoyed two decades ago,” the report said.
Ryhan O’Sullivan, MD at The TEFL Academy, said the economic pressures on Gen Z were ”making them look for international opportunities, whether that is working from home for an international company, or moving abroad, saving for a deposit and coming back”.
Qualifications obtained from the academy have enabled learners to secure teaching jobs abroad, with popular destinations including Southeast Asia, as well as opportunities to teach remotely.
O’Sullivan said the number of South African clients had doubled over the past four years, and he expects this to reflect an industry-wide trend among TEFL (Teaching English as a Foreign Language) organisations operating in the country. “When we started 15 years ago, it was millennials who were our largest segment of our market.
‘What we’ve seen over time is our business has continued to grow, but in the last few years it’s really accelerated, especially in South Africa. That shows us that more and more young people are choosing TEFL as a career choice when they get out of university.”
He said a common criticism levelled at younger people by the older generation, that they are not careful with money and, therefore, are unable to accumulate wealth, was not factual. “If you look at the statistics, that’s not actually the case. The reality is that they have less money as a [proportion] of their income.”
The report found that while discretionary spending for young adults has risen from R300 in 2005 to R700 in 2025, essential grocery costs have jumped from R1,500 to R5,443 over the same period. Additionally, early-career graduates earning between R6,000 and R9,000 per month, as reported by Indeed and Glassdoor in 2025, now spend 48% to 64% of their income on rent.
Not only are we earning less, but even the value of the items we purchase is also going down. Gen Z is classed as this lazy generation. The reality is that young people are focused on prioritising mental health, quality of life, and redefining outdated ideas of success
— Leandré Morake, one of the lead researchers for the report
Leandré Morake, one of the lead researchers for the report, highlighted “shrinkflation” — where product prices stay the same or increase while the sizes of essential and non-essential items continue to shrink, affecting Gen Zs negatively.
“Not only are we earning less, but even the value of the items we purchase is also going down,” she said. “Gen Z is classed as this lazy generation. The reality is that young people are focused on prioritising mental health, quality of life, and redefining outdated ideas of success.”
Compared to their parents, it is much harder nowadays for young people to accumulate wealth, O’Sullivan said. However, this decreased purchasing power, is not just a South African problem. “We also did this study in the UK and the US. It’s not just Gen Z in South Africa that are struggling with high living costs ... It’s the same picture in the US, in the UK. So this is actually a global issue.
“It’s not necessarily something that South Africa is doing wrong. It’s not something that the UK is doing wrong. It is the global financial system. The way money is created is based on debt, which is fuelling the rise in house prices and the rise in car prices. The two biggest purchases that we’ll ever make, we always make by getting ourselves into debt.
“For many young South Africans, the dream of financial independence feels further away than ever before. Gen Z isn’t struggling because they lack ambition or ability; they’re facing an economic landscape that has fundamentally shifted.”
However, it is not all “doom and gloom” for young South Africans. “Despite the odds, they’re showing remarkable adaptability, finding new ways to build meaningful lives on their own terms,” said O’Sullivan .
“A big benefit that Gen Z have is the sheer amount of opportunities coming from abroad. There’s huge demand for English teachers all around the world. Just in China alone, it’s estimated that about 400-million people are learning or want to learn English.”
That is a larger number of people than all the native English speakers in South Africa, the UK and the US combined, he pointed out.
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