Youth unemployment report – a generation at risk

Emeritus Professor Joe Nellis is economic adviser at MHA, the accountancy and advisory firm.

Alan Milburn’s report on youth unemployment highlights how increasingly difficult it has become for those aged 16-24 to secure a foothold in today’s job market, even when actively seeking work. This is not just a short-term employment problem, instead pointing to wider, structural issues surrounding economic opportunity, social mobility and the long-term health of the UK economy.

With youth unemployment now standing at over 16% – the highest in more than a decade – this is a key test of Britain’s ability to guarantee economic and social stability for its young people.

The Milburn Report notes a shortage of opportunities and greater competition for entry-level positions. This is making the first step into the workforce harder for many to take, as the rising cost of living and financial pressures add to the challenges young people face in a rapidly-changing business environment.

Extended periods outside employment or education at a young age can have long-lasting effects. The longer you are out of work, the more unemployable you become. This can lead to lower lifetime earnings, slower career progression, and greater exposure to insecure employment. There are also significant personal impacts, including eroded confidence, heightened anxiety, and deteriorating mental health among young people already uncertain about their future.

And the impact extends to the whole economy, leading to wasted talent and a loss of economic potential. Lower employment among young workers reduces productivity, weakens tax revenues, and increases pressure on welfare and public services, straining government finances. If entry-level opportunities continue to decline, where are the leaders of tomorrow coming from?

A growing number of young people feel excluded from opportunities such as stable jobs, financial security, and home ownership that previous generations expected. If these trends continue, inequality will rise, social mobility will decline, and frustration over economic fairness across the UK is likely to intensify. Young people feel mistreated, threatening to undermine social cohesion.

Without better employment pathways and prospects, improved skills training, and greater business investment in young people, the long-term economic and social costs could persist for years. A useful first step would be a shift in policy direction that reduces the financial burden on businesses and creates better conditions for job growth.

Among its UK locations, accountancy and business advisory form MHA has offices in Edinburgh and Aberdeen.