A sobering new analysis commissioned by the Peter G. Peterson Foundation projects that the United States' $39 trillion national debt will directly translate into millions fewer jobs and substantially lower wages for Generation Z workers over their lifetimes. The cost of servicing a debt now larger than America's entire economic output is poised to crowd out private investment and shrink the labor market for decades.
Service Costs Eclipse Critical Spending
The scale of the fiscal burden is already distorting federal priorities. Research from the Congressional Budget Office shows net interest payments on the public debt have ballooned to $857 billion this fiscal year. This single line item now exceeds the combined annual outlays for the Departments of Defense, Commerce, Homeland Security, Education, the EPA, and the Small Business Administration. Every dollar sent to bondholders is a dollar not invested in domestic infrastructure or returned to the American worker.
“Rising interest costs not only crowd out resources for public investments within the budget, but also deter private investment in businesses, which slows economic growth and negatively impacts the labor market,” the report stated.
A Direct Hit to the American Worker
The data, crunched by EY’s Quantitative Economics and Statistics (QUEST) practice, quantifies the damage. Compared to a scenario where Washington stabilizes the debt, the current trajectory will destroy 1.2 million jobs by 2035. That figure climbs to a cumulative loss of 2.7 million jobs by 2055 and 3.6 million vanished positions by 2075. For Gen Z—the cohort that will dominate the workforce in those decades—this represents a future of severely limited opportunity.
This job destruction is paired with a sustained assault on take-home pay. The analysis shows annual wages dropping by 0.6% versus a stable baseline within a decade, before plunging 3% by 2055 and over 5% by 2075. The cost of decades of congressional fiscal negligence, influenced heavily by corporate lobbying interests seeking short-term gain, is being invoiced directly to the youngest generations of American workers.