UK Youth Unemployment Skyrockets as Economic Weakness, Tax Increases and AI Take Toll
The UK's youth unemployment rate has reached its highest level in a decade, with over 15% of 16 to 24-year-olds struggling to find work. The economic downturn, exacerbated by the lingering effects of COVID-19, rising mental health issues, and the increasing use of artificial intelligence (AI), are all contributing factors.
The UK economy is currently underperforming its potential, with sticky inflation, elevated borrowing costs, and subdued consumer demand all contributing to a discouraging job market. Young people typically bear the brunt of this economic downturn, as employers often view entry-level workers as expendable. According to Sanjay Raja, chief UK economist at Deutsche Bank, "the higher up you go, the bigger the opportunity cost to replace workers who firms have put more investment and training into."
Another significant factor is the tax increase announced by Chancellor Rachel Reeves in last year's autumn budget. The £25bn increase in employer national insurance contributions (NICs) has added to employment costs, particularly for part-time workers in retail and hospitality, which are often staffed by younger individuals. The cut in the earnings threshold at which the tax applies has also hit young people hard.
The rise of AI is also having a profound impact on youth unemployment. As businesses invest heavily in new technologies to replace simple human tasks, entry-level jobs are becoming increasingly scarce. Raja notes that "you're in the perfect space where doing menial tasks – spreadsheets, etc – is being disrupted." The retail, hospitality, and health sectors are particularly investing in automation, with self-scanning checkouts, smartphone apps, and other technologies making traditional jobs obsolete.
The COVID-19 pandemic has also had a lasting impact on young people's education and transition into the workforce. Lockdowns disrupted critical years of education, making it harder for students to find employment. Mental health issues and disabilities have increased sharply among this age group, with over a quarter of 16 to 24-year-olds not in education, employment or training struggling with these issues.
Young people have grown up in an era of austerity, with public services crumbling, living costs increasing, and average wage growth flatlining. This has created a barrier to getting on the job market and a disincentive to work. Ben Harrison, director of the Work Foundation thinktank, notes that "all of those factors taken together, it's not necessarily too surprising you've seen this rise in mental health issues since the mid 2010s."
The UK government has proposed plans to scrap discriminatory youth age bands, but employers and experts are warning against a higher minimum wage. Nigel Farage has suggested cutting the rate, while the Resolution Foundation has urged Labour to reconsider its plan.
As the economic situation continues to deteriorate, it's clear that addressing the root causes of youth unemployment will require a multifaceted approach. The government must take steps to address rising living costs and stagnant wages, while also investing in education and job training programs to help young people navigate the increasingly complex job market.
The UK's youth unemployment rate has reached its highest level in a decade, with over 15% of 16 to 24-year-olds struggling to find work. The economic downturn, exacerbated by the lingering effects of COVID-19, rising mental health issues, and the increasing use of artificial intelligence (AI), are all contributing factors.
The UK economy is currently underperforming its potential, with sticky inflation, elevated borrowing costs, and subdued consumer demand all contributing to a discouraging job market. Young people typically bear the brunt of this economic downturn, as employers often view entry-level workers as expendable. According to Sanjay Raja, chief UK economist at Deutsche Bank, "the higher up you go, the bigger the opportunity cost to replace workers who firms have put more investment and training into."
Another significant factor is the tax increase announced by Chancellor Rachel Reeves in last year's autumn budget. The £25bn increase in employer national insurance contributions (NICs) has added to employment costs, particularly for part-time workers in retail and hospitality, which are often staffed by younger individuals. The cut in the earnings threshold at which the tax applies has also hit young people hard.
The rise of AI is also having a profound impact on youth unemployment. As businesses invest heavily in new technologies to replace simple human tasks, entry-level jobs are becoming increasingly scarce. Raja notes that "you're in the perfect space where doing menial tasks – spreadsheets, etc – is being disrupted." The retail, hospitality, and health sectors are particularly investing in automation, with self-scanning checkouts, smartphone apps, and other technologies making traditional jobs obsolete.
The COVID-19 pandemic has also had a lasting impact on young people's education and transition into the workforce. Lockdowns disrupted critical years of education, making it harder for students to find employment. Mental health issues and disabilities have increased sharply among this age group, with over a quarter of 16 to 24-year-olds not in education, employment or training struggling with these issues.
Young people have grown up in an era of austerity, with public services crumbling, living costs increasing, and average wage growth flatlining. This has created a barrier to getting on the job market and a disincentive to work. Ben Harrison, director of the Work Foundation thinktank, notes that "all of those factors taken together, it's not necessarily too surprising you've seen this rise in mental health issues since the mid 2010s."
The UK government has proposed plans to scrap discriminatory youth age bands, but employers and experts are warning against a higher minimum wage. Nigel Farage has suggested cutting the rate, while the Resolution Foundation has urged Labour to reconsider its plan.
As the economic situation continues to deteriorate, it's clear that addressing the root causes of youth unemployment will require a multifaceted approach. The government must take steps to address rising living costs and stagnant wages, while also investing in education and job training programs to help young people navigate the increasingly complex job market.
i mean, we all know inflation & cost of livin are a drag, but its still harsh on young souls tryna get their start in life. AI might b the future, but its got to be balanced with ppl's needs. gotta give it to gov tho, tryna address youth unemployment is 1st step 
I mean, think about it, they're just trying to make ends meet with all these new regulations and taxes coming in. The youth unemployment rate is probably going to be even higher next year because nobody's willing to take a pay cut or work for minimum wage anymore. And honestly, AI isn't that bad - it's just automation at this point... 
You can't blame businesses for trying to stay ahead of the curve and save money. The government's plan to scrap discriminatory youth age bands sounds like a slippery slope to me... what's next, a universal basic income? 
. Like, have you seen the plans to scrap discriminatory age bands? That's a step in the right direction, but what about actual job training programs that cater to this generation? We can't keep relying on "just get an education and then find a job" - it's not that easy for everyone 
.
, but we need more than just a band-aid solution. We need a proper overhaul of the economy and education system.
. The government needs to help them out more, not just scrap old youth age bands 
, right? I mean, you'd think we're all grown up by now, but it seems like we're still struggling 
. The thing is, the economy's not doing great 
. We need to support mental health and give them more opportunities to learn new skills 
. It's not just about throwing money at the problem, though - it's about making some real changes 
.
. The government's always going on about scrapping age bands and whatnot, but what they need to do is sort out the basics – raise wages, reduce living costs, and get some decent job training programs in place 
. And don't even get me started on this AI business 
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. It's like they're trying to replace humans with machines 
. It's so unfair 
.
. The government needs to step up and create some jobs, or at least invest in programs that can help young people develop skills 
. It's time for us to take action and make some real changes 
and it's not just that, it's like their whole future is being disrupted rn 
anyhoo, let's get real here, these tax increases are like a big ol' weight on young people's shoulders 
this is such a tough time for our youth! I mean, 15% unemployment rate is just insane! 
We can't just sit back and expect them to figure it out on their own when we've already failed them in so many ways 
.
i mean unemployment is already super stressful but mental health issues on top of that is like too much for a 16-24 year old rn 
u can tell why hes so high with covid still lingering around, ppl are stressed & anxious 
it's crazy that 15% of 16-24 year olds are struggling to find work right now 
. I think it's a combo of things going on - economic weakness, tax increases, and AI taking over some jobs 
. Investing in education and job training programs would be a good start