‘Lost generation’: why can’t young people get jobs? – The Latest

Summary

Podcast Summary: “‘Lost generation’: why can’t young people get jobs?”

Podcast: Today in Focus – The Latest
Host: Lucy Hough
Guest: Richard Partington, Guardian Senior Economics Correspondent
Date: May 28, 2026
Length: ~10 minutes

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Episode Overview

This episode examines the alarming rise of youth unemployment in the UK, referred to as the potential creation of a “lost generation.” Drawing from a major new report by former Labour Minister Alan Milburn, host Lucy Hough and economics correspondent Richard Partington break down the scale of the problem, discuss its economic and social implications, and explore the unique challenges faced by young people today in entering the workforce. The conversation touches on causes—ranging from mental health, changes in the jobs market, education disruption, and government policy—and looks toward possible solutions, highlighting the complexity and political difficulty of this crisis.

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Key Discussion Points & Insights

1. The Scale and Specifics of the Problem

• UK worst among peers:

  • Over 1 million people aged 16-24 in the UK are not in education, employment, or training (NEET).
  • Quote (Richard Partington, 01:35):

    "We have over a million young people age 16 to 24 who are not in education, employment or training... The life chances of people are really being eroded at the moment."

  • UK fares worse than most rich European economies, second only to Lithuania and Italy.
  • The problem has been worsening since 2015, with the UK's rank declining relative to similar nations.

• Detachment from work and education:

  • 6 out of 10 young NEETs have never had a job.
  • Nearly half have been out of education/training/work for more than a year, indicating long-term detachment.

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2. Causes Behind the ‘Lost Generation’

• Mental Health Crisis:

  • Rising levels of anxiety and depression among young people, linked to social media, smartphones, and “doomscrolling.”
  • Quote (Richard, 03:07):

    "One of the biggest factors is rising mental ill health among young people... concern about smartphones, social media, doom scrolling… having a consequence on rising levels of anxiety and depression."

• Economic Headwinds:

  • A weak jobs market exacerbated by economic shocks: COVID-19, Russia-Ukraine war, Iran war, and ongoing cost of living crisis.
  • Employers less willing to hire young (inexperienced) people.
  • Quote (Richard, 03:50):

    "Employers aren't taking people on as much as they used to. And young people who lack experience... are often the first to bear the brunt."

• Technological Disruption:

  • AI and automation disproportionately impact entry-level positions, reducing traditional job openings for school leavers.
  • Quote (Richard, 04:35):

    "AI... is particularly taking away employment opportunities in the entry level positions that young people would rely on."

• Aftereffects from the “bedroom generation”:

  • COVID’s impact on education (remote learning, disrupted university/school years) created further barriers to workforce entry.

• Cost of Living and Sectoral Impact:

  • Reduced consumer spending hits sectors (hospitality, retail) that traditionally offer entry-level jobs, leading to contraction in Saturday and casual roles.

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3. Countering Stereotypes About Young People

• Young people want to work:
  • 84% of surveyed young people expressed a desire to work.
  • Quote (Lucy, 05:11):

    "That sort of runs against this idea... of Gen Z snowflakes who are too busy making TikToks to go to work. That feels untrue."

• Welfare claims and mental health:
  • A growing proportion of youth welfare claims are for mental health reasons, fueling misleading stereotypes but revealing deeper systemic gaps.

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4. Government Policy and Labour Party Dilemmas

• Benefits vs. Employment Support:
  • Milburn’s report criticizes the welfare system for lacking effective support to get young people into jobs.
  • On average, young people with health issues receive only about a minute of employment support per week.
  • For every £25 spent on benefits, just £1 is spent on employment support.
  • Quote (Richard, 06:01):

    "For every £25 spent on benefits, just £1 on employment support. So Milburn's argument is... to get [the benefits bill] down, you need to support people to find a job."

• Labour’s policy tensions:
  • Previous attempts to tackle benefit costs created internal party friction ("welfare rebellion" undermined Keir Starmer).
  • Recent increases in employer National Insurance and the minimum wage—intended as progressive measures—may have inadvertently made entry-level hiring less attractive.
  • Quote (Richard, 07:38):

    “Labour’s critics... will frame Labour's increase in employer national insurance contributions as a jobs tax. That has had the biggest impact on entry level roles, particularly in hospitality, leisure, retail.”

  • Debate about raising youth minimum wage: all agree it helps with income equality, but it may unintentionally “price young people out of work.”

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5. The Complexity of Solutions

• Systemic, multi-faceted challenge:
  • A “system reset” is needed, addressing:
    • Welfare and benefits
    • Employment support services
    • Education reform (less exam-focused, more work preparation)
    • Social policy (mental health, smartphone/social media’s impact)
    • Taxation and employer engagement
  • Quote (Richard, 09:16):

    “Milburn talks about a system reset... If ever there was a mission that a politician... needs to champion, it is cutting across this multitude of issues that affects youth unemployment.”

• Political difficulty:
  • No easy, single solution—trade-offs and difficult choices lie ahead for Labour and whoever forms government.
  • Quote (Richard, 10:33):

    "There are no easy solutions... change is difficult and there are going to be a lot of different things that need to be done to address this."

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Notable Quotes & Moments

• “We are at risk of a lost generation.” — Richard Partington, 00:59
• “The life chances of people are really being eroded at the moment.” — Richard Partington, 01:53
• “6 in 10 never had a job. Almost half have been NEET for more than a year.” — Richard Partington, 03:07
• “84% of the young people... said that they wanted to work. So that sort of runs against this idea... of Gen Z snowflakes.” — Lucy Hough, 05:11
• “For every £25 spent on benefits, just £1 on employment support.” — Richard Partington, 06:47
• “Milburn talks about a system reset... it's a huge issue.” — Richard Partington, 09:16

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Timestamps for Important Segments

• [01:35] — Scale of youth unemployment crisis & NEET data
• [02:28] — UK’s relative position in Europe, worsening trend
• [03:07] — Mental health and economic factors explained
• [04:35] — Impact of AI, cost of living, sector-specific challenges
• [05:11] — Busting stereotypes about youth work ethic
• [06:01] — Welfare, benefits, and government support critique
• [07:38] — Effects of Labour’s National Insurance and minimum wage hikes
• [09:10] — Preview of Milburn’s upcoming recommendations
• [09:16] — Need for holistic, system-wide solutions

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Summary

This urgent episode highlights a deepening youth employment crisis in the UK—one shaped by mental health burdens, economic aftershocks, rapid technological change, and complicated political realities. The discussion challenges lazy stereotypes about Gen Z, underscores the inadequacy of current government responses, and warns of the far-reaching social consequences if the problem isn't addressed. As Alan Milburn’s report shows, fixing this will require reforming multiple interconnected systems and confronting uncomfortable truths—posing a daunting but unavoidable mission for UK policymakers.

Transcript

[A]

This is the Guardian.

[B]

From globalization to innovation sustainability to market volatility, there's always more than one side to a story. Explore different perspectives on today's most important business and economic issues with the Flipside podcast from Barclays Investment Bank. Hear two research analysts in a lively debate and get insights from every angle. To further inform your view, listen to the flip side on your favorite platform. We are at risk of a lost generation. Employers aren't taking people on as much as they used to. And young people who lack experience because they're by their definition at the start of their careers are often the first to bear the brunt of that. The life chances of people are really being eroded at the moment. So this is more than an economic crisis, it's a moral one.

[A]

The government has been warned of a lost generation of young people with more than a million out of work or education. From the Guardians today In Focus, this is the latest. With me, Lucy Half. Richard Partington, our senior economics correspondent, is here. Richard, you've been covering this major, long awaited report from former Labour Minister Alan Milburn this morning about the scale of the problem of the number of young people out of employment but also out of form of education or training. How big is the scale of the problem?

[B]

It's really big and it's incredibly worrying what it says about the position that the country is in and the prospects for the next generation. So the report this morning from Alan Milburn, who was health secretary in Tony Blair's new Labour cabinet, spells out a pretty stark issue. We have over a million young people age 16 to 24 who are not in education, employment or training. This horrible word, neat, is the acronym, but I mean, it's something that I don't people like to use as a term, but it encapsulates something really quite big and profound and that's that the life chances of people are really being eroded at the moment. There's a multitude of reasons why the more and more young people are out of work.

[A]

It's just worth saying, I think that this is quite a specifically UK problem, isn't it, when you compare with similar economies in Europe, that the problem is far worse here than it is elsewhere.

[B]

It's substantially worse here and it's been getting worse as well, which is one of the most troubling parts.

[A]

So we're seconded only by Lithuania and Italy in terms of being at the very much at the bottom of the

[B]

table amongst the, you know, the rich European economies. We're in one of the worst positions. And since 2015, things have been going backwards. We've fallen down the rankings relative to other countries.

[A]

So in terms of that figure that you mentioned, Richard, that over a million people, young people, are currently unemployed, 6 in 10. So a majority of that number have never had a job. What are some of the reasons for this? I mean, there must be a huge number of socioeconomic factors playing into this picture.

[B]

I think this is why it's one of the most troubling statistics, troubling issues in the country at the moment. As you say, 6 in 10 never had a job. Almost half have been neat for more than a year. So they're really detached from both the education system after they've left school and they're not engaged in the jobs market either. And the big reasons for this are several fold. One of the biggest factors is rising mental ill health among amongst young people. And that can be attributed to a whole manner of things. But there is a lot of concern about smartphones, social media, doom scrolling in the middle of the night having a consequence on rising levels of anxiety and depression. We're in a pretty weak jobs market at the moment. The economy is not doing well as a consequence of the Iran war. Cost of living crisis had already hit after the COVID pandemic and Russia's invasion of Ukraine. Employers aren't taking people on as much as they used to. And young people who lack experience because they're by their definition at the start of their careers are often the first to bear the brunt of that. There's been tax increases from the government as well and that has played a contributing role as well.

[A]

But also this picture that it is really difficult for a young person to get their first entry level job, given that the jobs market has contracted, as you say, and also that this is the COVID generation, the post Covid generation who had those very, very challenging years of university education or school education on screens. Alan Milburn described this as the bedroom gener generation.

[B]

Absolutely. And also if you think about AI and the way that's disrupting the jobs market, that is particularly taking away employment opportunities in the entry level positions that young people would rely on. Also in a cost of living crisis where people haven't got as much money to go out and spend as they might normally do, such as in the pub or a restaurant meal at the end of the week, the hospitality sector, retail sector, again, places where young people would typically get their first start or maybe have a Saturday job, are the places where employment opportunities are falling most.

[A]

Yeah. And what another striking thing from Milburn's report was that 84% of the young people that he spoke to said that they wanted to work. So that sort of runs against this idea. This is kind of generation of Gen Z snowflakes who are too busy making tiktoks to go to work. That. That feels untrue.

[B]

Yeah.

[A]

One of the things that can perhaps feed into that stereotype is the rising number of young people claiming welfare for their mental health, which is sharply on the rise. How did Milburn diagnose that problem?

[B]

He diagnosed the problem as the welfare system isn't geared up to encourage people to work. I mean, it's a really delicate and tricky argument for a former Labor Cabinet minister to get into with a. A Labor government that has a patchy record of addressing issues around benefits. We saw the big welfare rebellion by backbenchers last year, really, you know, of undermining Keir Starmer's authority as we see this today. It take a plucky Prime Minister to take on this issue again. But what Milburn says is that for young people who don't have job support, the consequence is going to be that they're going to be on benefits and that we're spending more on benefits, substantially more on benefits than on employment support. Work coaches. On average, young people who are neat with health issues only get around a minute per week of employment support. The government spends for every £25 spent on benefits, just £1 on employment support. So Milburn's argument is that benefits bill, you know, there is a concern about the cost of it, but to get it down, he says, you need to support people to find a job. And I think that's going to be the challenge that the government has to face to deal with.

[A]

And also what went wrong for Starmer last year, where the argument was about cost cutting from the benefits bill rather than about resolving this issue of productivity and employment in the jobs market, and particularly this issue of young people who have become detached, to use Milburn's phrase. The other issue that he has raised is things that Labour have done since taking office two years ago, nearly one of which is hiking national insurance rates for employers, but also raising the minimum wage, which Melbourne says was something that came up repeatedly when he talked to employers, and particularly when it comes to entry level jobs. Those Saturday jobs in a pub or a cafe that we spoke about.

[B]

Definitely. And this is something that employers will speak to you about time and again. It's something that the Labour's critics speak about time and again. The Conservatives, Lib Dems, they will frame Labour's Increase in employer national insurance contributions as a jobs tax. That has had the biggest impact on entry level roles, particularly in hospitality, leisure, retail and the minimum wage again. So Labour stood on a manifesto promise to equalize youth rates of the minimum wage with the full adult minimum wage. And there's been steadily increasing that rate for under 24s, but is probably going to hit the pause button. Certainly Milburn appears to be advocating for that because there is a concern that if you raise the minimum wage you begin to price young people out of work. But again, that is a controversial argument to make and Milburn acknowledges this and he also says, yes, employers are going to complain about this, but the biggest driving factor is not employment costs. It is that people in a cost of living crisis can't spend as much as they would normally and therefore employers in those sectors like hospitality and retail aren't making as much money to cover their wage bills.

[A]

So moving forward, Richard, this is the first half of Melbourne's review into all of this. We're expecting another report about what his recommendations will be in the autumn, but it seems like either direction it's to going potentially politically difficult for Labour. So the solutions might be the more challenging part of this.

[B]

I think this is the hardest part of the issue. I mean, Milburn talks about a system reset.

[A]

Yeah.

[B]

Now to me that sounds very familiar to language that we'd heard before the general election from Keir Starmer about mission based government and needing to phrase nostalgic phrase that we don't hear much about today. But I mean Melbourne talked about, you know, if ever there was a mission that a politician, you know, if it's Keir Starmer or a replacement as labor leader. Yeah. Ever needs to champion. It is cutting across this multitude of issues that affects youth unemployment and that's going to involve, as he put it, benefits. It's going to involve employment support. It's also going to involve schools, reforming education, making it less exam focused and more, you know, preparing for work in future. It's going to involve social policy questions and technology, so smartphones, social media ban, for example. And it's going to involve the tax system. It's going to involve companies and employers taking a more active and engaged role with young people. It's a huge issue and I think Milburn, speaking at the launch today, took these on really head on. He said there are no easy solutions. I mean we get a lot of populist politicians saying with this one simple solution we can fix everything. I think that the, the issue here is that change is difficult and there are going to be a lot of different things that need to be done to address this.

[A]

Yeah. Well, Richard, fascinating. Thank you so much.

[B]

Thank you.

[A]

That's it for today. My huge thanks again to Richard Partington, the Guardian senior economics correspondent. You can keep up with his reporting [e-mail] and I really recommend listening to our new sister podcast from our colleagues at Guardian US Stateside with Kai and Carter. Last night's episode is with Lauren Gambino on what's going wrong for the Democrats in the California primary. Thanks for listening to this episode of the latest Today in focus. We're back in your feeds as usual tomorrow morning. The latest will be back tomorrow night. This episode was presented by me, Lucy Hoff. It was produced by Angus Neal. The senior producer was Ryan Ramgobin. The lead producer was Zoe Hitch. This is the Guardian.

[B]

Foreign.

[C]

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