Young people are bearing the brunt of Britain’s unemployment challenge.

Last month’s ONS figures confirm that UK unemployment has reached its highest level in more than a decade. An 11-year high is a signal that the labour market is under real strain. Business experts warn that what it actually shows is that there is a deeper structural issue behind these headlines. That issue is that young people are struggling to access work at the very point at which they enter the workplace.

The data shows that 34.6% of 18-year-olds are now not in education or training, the highest level since 2009. That is more than a third of young adults who are at the edge of working life without a clear route forward. For a country that frequently talks about opportunity and growth, it’s clear that these figures demand serious attention, according to experts.

Peter Boolkah is a global award-winning Business Coach with over 20 years of experience in helping businesses to scale up, he says that he is seeing real problems for SMEs.  “In my work with business owners across the UK, I see the commercial reality behind those numbers. Over the past year, the cost of employing younger workers has risen sharply. The increase in youth wage rates, combined with the reduction in the National Insurance threshold to £5,000, has materially changed the economics of hiring at entry level. For many small and medium-sized businesses, the cost of employing a 16- or 17-year-old has risen by close to 20% in twelve months. In sectors such as hospitality, retail and leisure, these are industries that traditionally provide first jobs, margins are already tight. Labour is one of the largest overheads. When that overhead increases as fast as it has, recruitment decisions change. Business owners make decisions based on viability. They look at productivity, training time and overall cost. An experienced worker delivers immediate value. A younger worker requires supervision and development before reaching that level. When the cost gap narrows or reverses, the incentive to take on and train young people weakens.”

At the same time, he says that technology has reshaped the landscape. “Administrative tasks, booking systems and customer communication can now be handled remotely and efficiently. Many firms are restructuring their operations, reducing headcount or outsourcing specific functions. That shift further reduces the availability of entry-level roles,” Peter says that the impact is national. In larger cities, young people may have broader access to transport and a more diverse job market. “In smaller towns and rural communities, local employers are often the primary source of work. When those businesses pull back on youth recruitment, alternatives then become limited as we are seeing”.

An 11-year high in unemployment can easily be talked about in terms of economic cycles, but it also may reflect decisions higher up that shape the cost of employment and the incentives attached to hiring. When policy increases the cost of bringing inexperienced workers into the workforce, participation can fall. Entry-level jobs matter because they build employability. They teach punctuality, teamwork, customer service and accountability. They create confidence. They form the foundation of future earnings and career progression. When that foundation weakens, the long-term effect reaches far beyond a single set of monthly figures.

Peter says that if the government wants to reduce unemployment and strengthen productivity, the starting point must be the cost of entry into work. “That means examining the cumulative burden of wage increases and National Insurance changes on smaller employers. It means understanding that growth depends on businesses having both the capacity and the incentive to hire. The current figures show that the labour market is under pressure. The response should focus on restoring opportunity at the base of the workforce. Without that, the headline rate will remain elevated, and a generation will find it harder to secure its first step into employment.”