Bold statement: Britain’s youth unemployment has surged past the European average for the first time in 25 years, signaling a troubling shift in the job market for young people.
A sharp rise in joblessness among 16 to 24-year-olds has reached a historic high, placing the UK above the European Union in youth unemployment for the first time since records began. OECD data show the rate climbed to 15.3% in the three months to September, edging above the EU average of 15%. This marks the first occasion the UK has scored worse than the bloc since comparable records began in 2000.
Controversy and debate surround the causes. Bank of England rate setter Catherine Mann argues that substantial increases to the minimum wage—introduced by Conservative governments and continued by Labour—have contributed to higher youth unemployment. She contends that these wage rises have manifested in reduced hiring for younger workers, calling ministerial choices the single biggest influence behind the jump in youth joblessness. Her stance reflects a broader concern among some economists and left-leaning think tanks that above-inflation wage growth strains the labor market.
In an interview with The Telegraph, Mann warned against interpreting youth unemployment as merely a canary in a broader labor-market downturn, noting that the decade-long rise in the national living wage for younger workers has translated into higher unemployment for that age group. While she sits on the Bank of England’s rate-setting committee, her views echo a growing chorus of worry that wage policy is squeezing hiring opportunities for young people.
Supporters of this view point to rising costs for employers amid a high-inflation environment, suggesting that wage hikes, along with weakened growth, complicate hiring decisions. Angela Rayner acknowledged the risk to young workers, describing the policy shift as a challenge for employers trying to recruit staff. Labour has proposed phasing out the lower youth minimum wage rate—present since the minimum wage system began in 1999—as part of its plan to remove age-based discrimination.
Policy changes have already been implemented. In April 2024, then-chancellor Jeremy Hunt eliminated the lower rate for 21- and 22-year-olds. Since then, the government has reduced the gap between younger and older workers via several sizable increases. In April 2025, Labour-backed moves raised pay for 18–20-year-olds by 16.3%, lifting the rate from £8.60 to £10 per hour, while the 21+ rate rose by 6.7% to £12.21. A further rise is planned for April, with the youth rate expected to increase by 8.5% to £10.85 per hour and the 21+ rate by 4.1% to £12.71.
Critics warn that while higher pay aims to improve living standards, it could raise the barrier to entry for young jobseekers. Paul Johnson of the Institute for Fiscal Studies argued that making the lower rate less attractive to employers could hinder first steps into work, as firms may prefer to hire older, more expensive workers if wages are similar for both age groups.
OECD data indicate that roughly 150,000 more young people have become unemployed since Labour took office, bringing the total 16–24-year-old jobless figure to about 729,000. The UK’s position now sits above Hungary, Slovenia, and Poland, and it’s nearing Greece’s high youth unemployment level seen after the eurozone crisis.
Opposition voices have seized on the trend. Andrew Griffith, Labour’s shadow business secretary, framed it as a long-standing European problem of high youth unemployment and challenged Labour’s policies for worsening the UK’s position even before their full impact. In response, the Bank’s Mann emphasized that the economy remains sluggish and that inflation has scarred households, with weak expansion drivers—productivity growth, business investment, and labor supply—not firing on all cylinders.
Commentators stressing the Employers’ side note that higher costs can deter hiring, with some firms raising prices, trimming wages, or delaying recruitment in the face of rising costs. Louise Murphy of the Resolution Foundation urged caution, pointing to international comparisons where countries with lower youth wage gaps maintain strong youth employment, suggesting a reexamination of policy design.
Government reaction underscores ongoing efforts to tackle youth unemployment. A spokesman highlighted ongoing actions to boost youth employment and growth, including a £1.5 billion investment in work, training, and apprenticeship opportunities, plus measures to ease business incentives for hiring young talent through National Insurance relief and the independent Alan Milburn review into the root causes of youth inactivity.
Would you agree that higher minimum wages help or hinder youth employment? Do you think the UK should maintain a separate youth rate, or move toward a unified minimum wage for all adults and age groups? How should policymakers balance living standards with job creation for young people? Share your thoughts below.
