British young people have caught a European disease

For the first time in at least a generation, British youth unemployment is higher than the European Union average, rising to one in six 16-24-year-olds out of work. While popular theories blame AI automation or a post-pandemic mental health crisis, the data tells a different story. Job losses are concentrated in retail, hospitality, and transport—sectors largely insulated from AI. Furthermore, the rise in unemployment began in mid-2022, well after the sharpest increases in youth mental health diagnoses, and economic inactivity among this demographic has actually fallen over the past year.

The real cause is the surging cost of employment. In April 2025, the Government raised employer National Insurance from 13.8% to 15% and drastically lowered the threshold at which it kicks in, alongside a record 16% jump in the minimum wage for 18-20-year-olds. Consequently, the cost of employing a full-time 18-year-old on the minimum wage has increased by nearly £6,000 in just two years.

With the wage floor set in London but applied nationally, businesses outside the capital have been stripped of the headroom needed to absorb these costs. Young jobseekers are not being displaced by technology; they are simply being priced out of work by Westminster.