Can’t work, won’t work: Why is youth unemployment so high?

0:02Soshanna Davis:Sky News, the full story first.

0:08Soshanna Davis:Coming up, UK unemployment continues to rise and young people are being particularly badly hit. So who's to blame and what's to be done? How does a banana trigger a CIA-backed coup? Do AirPods herald the arrival of a new global order? What do LED lights say about the future of humanity? I'm Ed Conway, and in each episode of my new podcast, Stuff Matters, I take an object, crack it open, and reveal the world-shaping forces hidden inside. This is economics told through the things we think we understand. Search Stuff Matters on your podcast app to listen and follow.

0:50Soshanna Davis:The unemployment rate was 4.1 % when Labour came to power. It is now 5.1%. Do you accept that unemployment has got worse under Labour? Well, we've also created hundreds of thousands of new jobs in our country. We've had the highest growth rate. Sorry, I'm going to come in because you're talking about growth rates. You're talking about growth rates. I'm asking you, do you accept unemployment has got worse under Labour? I've just read out the statistics to show it has. So do you accept that? Well, the way to create more jobs is to create growth. And that is what this government is completely focused on doing.

1:25Soshanna Davis:That's why we have billions of pounds of additional investment. That's my colleague Sophie Ridge with the government minister doing the morning rounds of the TV studios on Tuesday, Stephen Kinnock. And what he couldn't quite say out loud, but which is blindingly obvious to the rest of us thanks to the Office for National Statistics, is that unemployment is up to 5.1%. They also tell us that wage growth, the rate at which salaries rise, is slowing. Plus, the number of people on payroll, people in jobs, has slumped. The labour market isn't exactly firing on all cylinders. and it appears that younger people are bearing the brunt with youth unemployment at 16%.

2:03Soshanna Davis:Shazana Davis is better known online as the fairy job mother. She's an online influencer and career advisor with particular focus on Gen Z. Shazana, great to have you with us. Let's start with those ONS figures because when you strip away a lot of the detail, there are some bold facts in there that are really worrying. I definitely think the statistics are scary. I think it's a very hard job market for young people. I also think, though, not too undermined that the job market is hard for young people because it absolutely is. But I'm always a person that likes to look into the weeds of the data and really actually dig out key things.

2:38I would say that lots of young people probably graduated in the past three months. And so lots of those people that are probably just graduated are chunked in this latest revision of the data. Lots go travelling, lots take a break, lots may still be looking for a job. But yeah, I think they're definitely very scary figures. The market is competitive. I'm being asked left, right and centre, what do I think are the causes of this? I personally don't think there's a sole cause. I think there's mixtures. I think the job market is very hard. I think some industries are hiring less due to the economy has been slower and the rising costs of running a business.

3:12I think there are now higher employment costs. So some people are avoiding hiring young people. Some industries are using AI and automation, but I don't think as many as the media is maybe making out high mental health rates are potentially playing a part as well. Regional inequality, skill mismatch, it's a combination of lots of different factors in the world that we're living in today.

3:32Soshanna Davis:Are young people as attractive, a source of extra pairs of hands as they once were, given the changes that there have been to national insurance and given the hike that there's been to the minimum wage? Everyone wants young people in the next generation to do well. I think maybe for small businesses, potentially some of these higher costs of running a business and national insurance and things like this have definitely played a role. But I also work with lots of employers and lots of those are still very much hiring young people on graduate programs, apprenticeship programs. There's so much buzz going around in the media.

4:05There's so much noise. And I would hate for that to make young people almost feel like there are no opportunities for them. I would say that's not the case. Yes, the job market is hard, but actually there are still opportunities out there.

4:16Soshanna Davis:You just keep providing the positivity through this podcast because sometimes I'm not exactly full of it because I look at the marketplace that's out there. You mentioned artificial intelligence. Are there the range of job opportunities out there that there once were for young people? Or are they having to really think about which career path to start embarking on? I definitely think young people should be thinking in a little bit more detail in terms of what career path they should embark on. But I also think it's just a fact that it's something all of us need to be aware of. Nobody knows where technology and AI is going to go.

4:52We should all be more open to upskilling and considering different opportunities and maybe moving our skills where they're actually needed. I think some companies are using this technology in a way rather than employing younger workers to a certain extent. But I don't think it's to the extent that the media is portraying. I'm involved with an organisation called the ISE, which is the Institute of Student Employers. And they recently polled a bunch of the top 50 student employers in the UK on this exact topic. And most of those employers stated that they aren't replacing or planning to replace entry-level roles due to AI in the next coming two to three years.

5:25Soshanna Davis:Is getting a degree necessarily the best career path for young people to follow these days? There has been some interesting data in the past couple of days suggesting that actually you might be better off if you ditch the degree. I think it honestly all just comes down to the individual and what their goals are. I do think a degree still can be a good idea, but it's no longer and should no longer be the default or safest option for everyone. I think degrees can still make sense if the career that you want to go to or the industry requires it. Of course, there are questions we should be asking in terms of the cost versus the return, the 50k of that versus no guaranteed job.

6:01I guess the next question you might be asking is what should young people do instead of a degree?

6:06Soshanna Davis:That is certainly the question I was going to ask. Go on. Okay, first of all, apprenticeships are an option. They give you the opportunity to earn while you learn. There are different levels, basically. Level three to seven. So seven is like the equivalent of a master's. There are actually some apprenticeships you can do where you come out with a degree level. The free degree, also like four or five years working experience, no debt, direct industry experience. And they are becoming increasingly respected by employers. For some industries, apprenticeships now beat degrees, hands down. There's then other options, like just standard entry-level jobs.

6:37There are still actually people that, believe it or not, leave school at 18 or leave school at 16 and just start an entry level job that's not an apprenticeship and work their way up the company. There's also things like short courses, boot camps and certifications, especially in industries like tech, data, AI. These industries are very fast paced and doing a boot camp or a short course is faster and often a lot cheaper than a degree. I personally think in 2025, the smartest career move today, it's not choosing the right path. It's honestly about staying open, adaptable and being ready to reskill.

7:08AI and automation are going to mean that roles are going to change rapidly. And I do believe that reskilling is going to become the norm for lots of industries. Just because you've studied a subject for four years and you can't find a job, that doesn't mean you're four years away. You've actually gained loads of other stuff in addition to that, too. It's just about being open minded and also being aware of those things.

7:28Soshanna Davis:I suppose, though, it is difficult for someone who has just done three, maybe four, maybe five years at university to step away from the subject that they have focused on and invested a hell of a lot of their own time and money in. I agree. I would be annoyed if I had to do that, to be honest. But it's the nature of how things are going. I will say, though, that the market is very hard. It's always been hard. and I'd say in the past two to three years the average time it's taken for maybe a graduate to find a job has been between three to six months. I think young people are still maybe going into university to be told, oh, once you've got that degree you're going to find that job, it's going to be easy.

8:04So that when they come out and they don't find a job instantly it's this shock, but actually it's normal.

8:10Soshanna Davis:What then is your assessment of how well both the public and private sectors do at encouraging young people into work? There is a lot of buzz at the moment around the youth unemployment statistics. The current government are trying to do things to sort those things. So, for example, announcing millions of pounds in investment and announcing 50 ,000 more young people are going to have access to apprenticeships. But a lot of the time, those are only often targeted at certain industries. And those are the industries where they need people. But a lot of the time, young people don't always have an interest in working in those industries.

8:44And actually, if education started earlier on, they would then have that interest. Can we start actually educating them at school age about these are the industries that are growing? I think creating hype and interest earlier on would be better.

8:59Soshanna Davis:You're talking about young people not being interested in certain industries. Is it possible that young people that this generation are just a bit too picky, that actually it would be better to get out there and start working rather than waiting for your, in inverted commas, dream job? You have people in every generation who don't want to do things and who are lazy. I think it is very much a mindset thing. And I think just thinking about it from their perspective, a lot of them are doing all these kind of basic things that have been told to them by society. They're going to school. They're getting those good grades.

9:29They're then going to university. They're working super, super hard. and they've been promised for years that they're going to kind of have this dream job at the end of it it's not about them not wanting to work or not wanting to necessarily do these things i think it's more about actually them being sold this dream and it takes you a little while to actually realize oh actually the world isn't like that and actually let's be real this is maybe a different topic but let's be real for a lot of these entry-level graduate apprentice jobs the salary isn't always that great yeah so if you're if you're going to be working your butt off for however many hours to then not even be able to make ends meet, is it worth it?

10:03Soshanna Davis:The economy is not going great guns. Labour said that it was all about growth and through growth that was where the opportunities have come. It isn't like that. So whilst it is fine for us to be positive about young people and encourage them to explore all the avenues until the economy starts picking up, I mean, it's pretty grim for everyone. I personally think, and this is maybe controversial, but when you look into that data, there's a lot of things that are not taken into account in that data that's basically looking at people who are employed or in full-time education so that means like university college whatever but what about the young people that run their own businesses what about the young people who are in between jobs what about the young people who are upskilling on their own because you can learn so many things online so it's almost important just look into these numbers and be like yes they say something but what is the bigger picture Shazana when you do speak to the young people who kind of come seeking your advice what is the one thing that people are asking right now?

10:57There's worry around AI and is that going to take my job and what industries I should pick. There's also confusion around like I can't find a job. I keep getting rejected and I do think these headlines are having an impact. Some of them are, they're real in a certain way but they're also almost like scaremongering which I think doesn't help anything. So they are creating I think a little bit of anxiety.

11:16Soshanna Davis:For those who don't know the fairy job mother Shazanna, I wonder if I can just get a bit personal for a second. How did you end up doing this? I was someone that was like not particularly academic at school I did go to university but I found my A-level so I ended up getting in through clearing convinced my uni to let me in even though I didn't have any of the grades and I was basically on a mission to prove myself when I started and get as much experience as I could and that was my mission because I didn't actually deserve to be there on that course and I worked super super hard I knew I wanted to gain experience the first thing I did was I went to my uni career services who weren't great they weren't helpful so I almost very much had this mindset of I'm gonna have to figure this out on my own so I did and this is quite rare but I actually did graduate with around two and a half years of relevant experience so I did internships every summer I worked for a startup while studying and I did a year in industry and by the way even with all that experience I struggled to get a graduate job when I graduated I thought oh I've got all this experience I probably know more about helping people find a job than the uni career services so I always had this idea in my head that I wanted to help people but I was just starting a new job so I'd let that pause and obviously Covid happened and I had all this spare time and I was just like okay this is my time to maybe like pursue this idea so I started just posting documenting my journey as someone that was new-ish to the world of work but was progressing pretty quickly in my role and started sharing tips and tricks and I was able to build a bit of a community around that so now I do work directly with young people share lots of tips and tricks but I also work with businesses basically so I run a kind of training development company slash consultancy when you believe in something it just makes you go even more so I think just consistency believe in yourself and that's why I try to have a positive mindset with everything I do and when I'm helping young people as well because I do think it's possible even when the situation and the economy isn't great there are still very much opportunities.

13:08Soshanna Davis:And just maybe then a final word from you to those who at times like this look at ONS statistics and say do you know what this generation they don't know what they're doing all they need to do to get a job is get out there get on their bike and knock on doors that's what I did therefore it must apply to Gen Z I would honestly love to see them try why don't you try it right throw your CV put no experience on it because that's what you probably wouldn't have if you were someone that age and try it and see how far you get and you'll see it's not that easy like when I was looking for a part-time job when I was 16 and this was like several years ago my mum was like oh drop your CV and not realising that no one takes the CV in.

13:45You can't just drop your CV in. Everyone wants it online. So try it, honestly. If you think it's that easy, please try it and let's see how you get on.

13:53Soshanna Davis:If people are desperately concerned, where can they go just in the short term for a little bit of reassurance? Well, you can message me. But I think first and foremost, please don't take it personally. The market is tough and you will find something. You just need to keep going. Be thinking, there are so many people applying. what can I do differently? AI is making it very easy for people to just submit anything, which means employers are sifting through more, right? So maybe focus on quality and quantity, or don't just rely on applying online, get yourself out there, because everyone's applying online, go to career fairs, industry events, join institutes, like I used to go on Eventbrite, and type in because I want to work in tech, I'd type in tech, I'd see all the free events, and I just go to them.

14:36And no one expected me to be there. And I met people that way. So just what can you do that other people are not doing that's going to help you stand out and just try and stay positive as well. Those would be my top tips.

14:46Soshanna Davis:Shazana, it has been an absolute pleasure to talk to you. Thanks so much for your time. There's much more analysis of the ONS stats and what they mean for you over on the Money blog. Just head to skynews.com. The Daily's back tomorrow.

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