Young people are biggest victims of UK's fragile jobs market

"Without overdoing the blame, say many experts, the chancellor's tough budget last year and the likelihood of a repeat next month hangs over employers and how they recruit and pay staff. The latest official figures show a rising number of young people out of work in the three months to August. More broadly, unemployment rose to a four-year high and the number of vacancies fell."

"Reeves can be held to account for the increasing cost of employment after the hit to employer national insurance and jump in the national living wage that were signalled at the budget last year and implemented in April. UK labour market shows signs of stabilising after job losses Joe Nellis, an economics professor and adviser to the accountants MHA, said the impact was being felt mainly by young people, both graduates and non-graduates, who were most affected by the lack of vacancies."

"Some experts have blamed a greater reliance by employers on artificial intelligence to carry out the work usually performed by new recruits. But Nellis said employers were simply too scared to take a chance on younger people when minimum wages and taxes were much higher than last year. Employers have singled out the large cut in the threshold for paying national insurance for their reluctance to hire new staff as much as they blame the almost 2p increase in the rate to 15%."

Rachel Reeves's budget measures increased employment costs through employer national insurance changes and a rise in the national living wage implemented in April. Official figures show rising youth unemployment, an overall unemployment increase to a four-year high, and a fall in vacancies. The public sector wage bill rose faster than private sector wages, driven by large pay rises for health and education workers. Employers cited higher minimum wages, higher taxes and a lower national insurance threshold as reasons to avoid hiring younger and part-time workers. Some employers also relied more on artificial intelligence instead of new recruits.

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