If you are a school leaver or graduate looking for an entry-level job in Britain right now, you have the odds stacked against you in a way that feels almost designed to break your spirit. The latest figures from the Office for National Statistics, released this month, confirm what many young people already knew: the unemployment rate for 16 to 24-year-olds has surged to 16.1 per cent. That is the highest it has been since early 2015 and, as the Resolution Foundation think tank has pointed out, it now sits above the EU average for the first time since records began at the turn of the millennium. Across the Channel, the youth unemployment rate stands at 14.9 per cent. Here, nearly one in six young people who want to work cannot find a job. The overall unemployment rate has climbed to 5.2 per cent, a near five-year high that excludes the pandemic blip, and the number of unemployed people per vacancy has hit a new post-pandemic record. The government’s own figures show payroll employment fell by 11,000 in January, and redundancies rose by 11,000 in the final quarter of last year. It is not a pretty picture.
One might assume, in a market this tight, that employers would be falling over themselves to snap up available workers. One would be wrong. Instead, what we are witnessing is a bizarre inversion of the labour market where the very people desperate for work are being subjected to recruitment processes that would not look out of place for a senior civil service post. The Guardian recently highlighted the absurdity of the situation: candidates for shop floor retail or waiting staff positions are now being forced to navigate personality tests, group tasks, and interminable online application portals just to be considered for a role paying the minimum wage. Some retailers are requiring 90-minute group interviews where applicants must present their own sales ideas to a room of twenty other hopefuls. For a job stacking shelves. The disconnect between the role and the recruitment hoop-jumping is staggering, and it is young, inexperienced candidates who are bearing the brunt of this new puritanism in hiring.
The question, of course, is why. Why make it so hard for people who are, by definition, looking for the kinds of jobs that require minimal training and offer minimal pay? The answer, as Alice Martin from the Work Foundation suggests, is cynical but hardly surprising: because they can. With so many candidates chasing so few openings, employers hold all the cards. They can afford to be picky, to introduce multiple stages of selection, to test for “cultural fit” and “behavioural competencies” when all they really need is someone to show up on time and work the till. The power dynamic has shifted decisively in favour of the hirer, and they are exploiting it ruthlessly.
But there is another, more structural factor at play here, and it has a lot to do with the government’s own policies. The Conservatives, now in opposition, are blaming Labour directly. Shadow work and pensions secretary Helen Whately put it bluntly: “Entry-level roles are the first to disappear from Labour’s tax hikes. By making hiring more expensive and more risky, Labour are ensuring school leavers and graduates never even get a foot in the door”. She is referring to the Chancellor Rachel Reeves’ decision to hike employers’ National Insurance contributions while simultaneously pushing through above-inflation increases in the minimum wage. It is a classic double whammy. From April 2026, the National Living Wage for over-21s will rise to £12.71 an hour, up from £12.21, while the rate for 18 to 20-year-olds jumps to £10.85. The government’s own Low Pay Commission is also working towards abolishing the lower youth rate entirely, meaning the full adult wage will eventually apply to everyone over 18. Admirable in principle, perhaps, but in practice, it makes hiring young, inexperienced staff a more expensive gamble. And when hiring becomes expensive, employers become risk-averse. They add more hoops. They take longer to decide. They look for candidates who are already “job-ready” rather than those who need a chance.
Meanwhile, the other great pillar of the low-wage workforce – migration – is collapsing. The government’s crackdown on visas is working, if your definition of working is dramatically reducing the number of people coming to the UK. Net migration, which peaked at nearly a million in 2023, is expected to tumble to somewhere around 200,000 this year, with some analysts even predicting it could dip below zero for the first time since 1993. Skilled worker visa applications have plummeted, and the health and social care sector has been decimated, with a 94 per cent reduction in migrants coming via the health and care visa route compared to the 2023 peak. The government has effectively banned overseas recruitment of care workers and tightened the rules on students bringing dependants. The result? Sectors that have long relied on migrant labour – hospitality, retail, social care – are now staring into a staffing void. Yet, as we have already seen, this has not translated into a bonanza for young British workers. Instead, it has created a paradox: labour supply is tightening, unemployment is rising, and employers are still acting as if they have their pick of the cream of the crop.
The situation in social care is particularly emblematic of the madness. The sector is perpetually in crisis, with 43 per cent of adult social care workers earning below the real Living Wage, according to the original report. One might think that any employer would be grateful for applicants. Yet a new study from the Institute for Fiscal Studies, published in January, challenged the long-held belief that care homes lose staff to supermarkets because of better pay. The IFS found that when large supermarkets open near care homes, there is virtually no significant change in care home staffing levels. The researchers suggested that care work and retail work may appeal to such different people and require sufficiently different skills that they do not actually compete for the same pool of labour. It is a fascinating insight that blows a hole in a convenient excuse. The care sector’s problems run deeper than a simple wage comparison with Tesco; they are about professional status, progression, burnout, and culture. But it does not change the fact that the sector, like others, is struggling to fill posts, and the government’s migration crackdown has shut off a vital supply line.
The overall economic impact of these trends is not trivial. Jonathan Portes, an economics professor at King’s College London, has warned that the draconian restrictions on migration are “an act of self-harm”. The National Institute of Economic and Social Research has likened the effect of falling net migration to Brexit, suggesting that if it fell to zero, it could knock 3.7 per cent off the UK’s annual national income by 2040. That is the scale of the hit we are talking about. The Treasury, which relies on the tax receipts from a growing workforce, is set to lose billions. Portes estimates that a shortfall of 200,000 migrants could translate into a £6bn to £8bn hole in the public finances. And for what? So that young people can be subjected to even more gruelling application processes for the few jobs that remain.
What we have, then, is a perfectly miserable confluence of events. A government that has made hiring more expensive and immigration nearly impossible, an employer class that has responded by making recruitment more Kafkaesque rather than more accessible, and a generation of young people stuck in the middle, jumping through hoops for the privilege of low pay. The Bank of England is expected to cut interest rates again next month to stimulate something, anything, but that feels like rearranging deckchairs on the Titanic. The labour market is tightening, unemployment is rising, and the pathways into work are becoming obstacle courses. It is a mess of our own making, and the people most desperate to get a foot in the door are the ones being asked to pay the highest price.
