Youth minimum wage may be making first jobs harder to find

Unemployment among 18–24-year-olds has risen to a level not seen since 2015 outside the pandemic, and analysts say recent increases in employers' costs, including rises in the under‑20 minimum wage, have raised the cost of hiring young workers.

Employers and politicians are debating whether recent rises in the youth minimum wage are making it harder for young people to land their first paid roles. Starter jobs for teenagers have fallen for decades for many reasons, but current evidence suggests finding initial paid work is becoming more difficult. This week unemployment for 18‑ to 24‑year‑olds reached a level not seen outside the pandemic since 2015. Government decisions, including higher employers' national insurance and stepped increases to the under‑20 minimum wage, are being cited as factors that have raised hiring costs. Key facts: - Unemployment among 18–24-year-olds has reached a high not seen outside the pandemic since 2015. - The Centre for Policy Studies estimates hiring an 18–20-year-old will cost 26% more by this spring than in 2024. - The under‑20 minimum wage has been increased to £10 an hour, while the adult rate is now £12.21, and employers' national insurance has also risen to fund the NHS. - Alan Milburn's review into why record numbers of 16–24-year‑olds are neither earning nor learning is considering economic factors as well as health diagnoses. - There is internal Labour debate about whether raising the youth minimum wage as pledged risks pricing some young people out of work, and any change would carry political consequences within the party and with unions. Summary: Higher labour costs for under‑20s are being linked in public debate to rising youth unemployment and to employers' hiring choices. The Milburn review is examining economic causes, and any policy adjustment remains undetermined at this time.