Highest unemployment in nearly 5 years, youth highest in the EU and BoE blames Labour
It's so very worrying as tens of thousands loose their jobs a month and now the Bank of England has come out and admitted what we all knew.
For months the Labour government has been saying to everyone that they are on the side of working people and giving low earners a pay rise by increasing the National Minimum Wage and National Living Wage. But todays overall unemployment figures hitting 5.2% with no sign of slowing is worrying but the real disaster is within the youth labour market subsector.
Labout have given everyone a pay rise they say but the reality is they haven’t given anyone anything apart from unemployment. They’ve simply forced businesses that are already being battered by Rachel Reeves’ punishing Budget, the most expensive energy in the developed world and insane increases in Business Rates, to hand over even more cash. And now, as the consequences pile up, the latest unemployment rates are in and last week the Bank of England confirmed what every sensible person with a shred of real world experience predicted. Jobs are being lost and those paying the price are young people.
BoE Rate tells it how it really is out there
On Friday, Catherine Mann, one of the Bank’s rate setters, told the truth about this anti-business government. Speaking about the ‘accumulation over three years of the rise in the national living wage for that group,’ she said bluntly: “It has been manifested in unemployment for that category of workers. Very unfortunate, but it is true. It is a fact.”
She wasn’t talking about some abstract economic model. She was talking about the 16-24 year olds now facing a youth unemployment rate of 15.3%, higher than the EU average for the first time since records began in 2000. For 18-24s it’s hit 13.7%, up from 10.2% just three years ago. That’s not a “canary in the coal mine” for the wider economy, Mann cautioned, but it is a brutal reality for Britain’s next generation. Britains lost generation.
The rate for 18-20 year olds has rocketed 46% to £10 an hour, rising again to £10.85 in April. For 21-22s it’s up 33%. Labour’s grand plan? Scrap the discriminatory age bands entirely so a 17-year-old with zero experience costs employers the same as a 25-year-old with skills and a track record.
As Mann herself pointed out, when you can’t cut wages below the legal floor, businesses have one obvious response; they do not hire. Especially in retail and hospitality, that traditional first rungs on the ladder for teenagers where they can get some experience of work for what is pocket money whilst they live at home and employers can get a good labour rate to help them invest and grow. This is where payrolls and budgets have been utterly decimated.
More and more pain is costing jobs and killing growth
And this isn’t happening in this one area, remember that. Reeves’ Budget piled on billions in extra employer National Insurance, workers’ rights reforms that make hiring a legal minefield, and the highest tax burden in decades. The result is payroll employment fell by 43,000 in December alone, the biggest monthly drop since the depths of Covid. Since the Budget, we’re talking over 200,000 jobs gone, with some reports clocking nearly 1,400 roles axed every single day. Businesses are folding left, right and centre. The retail sector alone has seen hundreds of stores shut and nearly 400,000 jobs evaporate in two years.
This was all entirely predictable. SME’s and even the Resolution Foundation warned this would happen. Basic economics 101. You put a price floor above someone’s marginal productivity and you create unemployment. Especially for the young, the inexperienced, the apprentices who were never worth the new headline rate to begin with. It sounds harsh but it isn’t, if I look back at my first job I was woeful compared to today now I have experience and competence!
Yet Labour ploughs on, desperate for the headlines and virtue signalling that they are ending low pay and should worship them for it, while quietly admitting they’re throwing £1.5 billion at training and apprenticeships to paper over the cracks their own policies created, which itself takes time and leaves a generation of forgotten teenagers.
I can confirm through my own experience what damage Labour are doing
Both my teenagers have lost their jobs directly because of this madness. One was made redundant because the small business simply couldn’t absorb the higher wage bill on top of all Labours other rises so they had to cut staff. The other watched their company close its doors after the cumulative toll of Labour’s taxes, regulations and cost of related services becoming unsustainable. And with it went a hard won apprenticeship, exactly the sort of opportunity that used to give young people a foot on the ladder.
Two bright, willing kids. Two entry level opportunities destroyed. Not because they weren’t good enough. But because this government decided politics and virtue signalling trumps economic reality.
This is the human cost of left wing economic illiteracy. You don’t create prosperity by ‘legislating for growth’ as Reeves put it, you de-legislate for growth. You don’t help the low paid by making it impossible for businesses to employ them at a rate that reflects their current value or what they can afford as they try to grow. You simply shrink the employment pool and pretend the people falling off the edge don’t matter.
The Bank of England has now said the quiet part out loud. Youth unemployment is the direct, measurable consequence of these substantial wage hikes. The very group Labour claims to champion, the young, the ambitious, the ones starting out, are the ones paying the heaviest price.
So spare us the next round of taxpayer-funded initiatives when the solution is much simpler to implment. What Britain’s young people actually need is a government that understands incentives, stops treating businesses like cash machines, and lets the labour market work. Lower taxes. Less red tape. Wages that reflect real productivity, not political press releases.
Because right now, the only thing rising faster than the minimum wage is the number of young Brits stuck on the sidelines wondering why the ‘party of working people’ just priced them out of the workplace and onto the unemployment figures with no prospects.