Danni Hewson, head of financial analysis at AJ Bell, looks at the latest UK jobs figures and the growing challenge of youth unemployment as Andy Burnham’s government begins setting its priorities.
No one doubts the huge challenges facing Andy Burnham and his new cabinet, or the difficulty he will face prioritising those challenges, but tackling rising levels of unemployment amongst 18-24 year olds must rank near the top.
Speak to businesses up and down the country and they will tell you that under the previous administration, hurdles were put in place that made it harder to take a chance on bringing younger workers into the fold. Concerns about changes to employment rights coupled with increased costs made many companies more cautious about taking chances on new but unproven workers.
There’s also been pressure to use technology to improve long-term productivity. While some companies have recognised the benefit of bringing in a younger tech-savvy generation, others have made choices to spend their cash on tech rather than talent.
Getting that first taste of work is so important, especially in a tight labour market where experience is often the big differentiator. There can also be a real hit to young people’s mental health if they’re taking the time to write numerous bespoke applications, but never even getting an acknowledgement that their time and effort has been recognised.
These young people are the next generation of taxpayers, future homeowners and tomorrow’s consumers. Without their full and early integration into UK plc, the country’s economy will struggle to grow over the long term.
Looking at the bigger picture, the jobs market appears to have stalled. However, the fall in vacancy numbers has slowed and wage growth is still, just about, outpacing inflation.
At 4.9% the unemployment rate is higher than the 4.2% it stood at when Keir Starmer strode into Downing Street and is a number that will undoubtedly have been impacted by events both foreign and domestic. But if the new PM is going to accomplish all the things he has said he wants to do, particularly if he wants to foster hope, making the jobs market work for everyone must be a priority.
