The job market in London is facing a significant crisis, particularly affecting young individuals. Recent official statistics reveal that unemployment among young people aged 16 to 24 in the capital has surged to an alarming nine-year high, averaging 18.6% over the past year. This translates to approximately 88,000 young Londoners being unemployed, which marks an increase of 11,000 from the previous year.
To put this into perspective, the last time the unemployment rate for this age group exceeded 18.6% was nine years ago when it reached 19.4%, excluding the effects of the COVID-19 pandemic. Moreover, the overall employment figures for young Londoners have also seen a downturn, dropping to 383,000 from 400,000 within a year—a decline of 17,000 or about 4.25%.
In addition, the workforce of those aged 25 to 34 has decreased by 15,000, from 1,404,000 to 1,389,000, amounting to a decrease of around 1.07%. Similarly, for the 35 to 49 age bracket, there was a reduction of 59,000 jobs, falling from 1,804,000 to 1,745,000, which reflects a decrease of 3.27%. Notably, the most pronounced drop in employment is observed among the youngest cohort, those aged 16 to 24.
Dylan Law, a 19-year-old candidate from the Green Party running for Deputy Mayor in Hackney alongside Zoe Garbett, highlighted the struggles faced by young job seekers. He stated, "Behind the statistics, young people are struggling because the system is stacked against them. Entry-level positions often require extensive experience and multiple interview rounds, yet they fail to provide adequate compensation."
Law further elaborated on the post-COVID employment landscape, noting that job vacancies have drastically diminished, leaving young candidates facing numerous barriers, including precarious work opportunities and a lack of support during critical times.
The statistics regarding unemployment among London’s youth may be even more concerning in recent months, as the figures up to September average out a year and reflect a time when unemployment rates were lower.
From the total of 471,000 young individuals who were economically active in the year leading up to September—meaning they were either employed, able to start work within two weeks, or waiting to begin work—there remains a stark contrast with another 465,000 young Londoners who were economically inactive, having not sought employment in the past four weeks or unable to start work promptly.
Critics, including shadow Chancellor Sir Mel Stride, have pointed fingers at the government, asserting that taxing work leads to job losses. He emphasized, "Londoners are facing severe consequences from Labour's economic mismanagement. The approach taken by Rachel Reeves, which favors welfare over work, results in diminished opportunities and leaves a generation behind."
In contrast, Work and Pensions Secretary Pat McFadden cited national figures indicating a rise of 513,000 more individuals in employment compared to last year, while stressing the need for increased efforts to enhance job opportunities for young people. He mentioned, "We are investing £1.5 billion to assist hundreds of thousands of young individuals in either earning or learning, and former Health Secretary Alan Milburn is spearheading a review to address the barriers hindering the younger generation."
He also noted the Jobs Guarantee initiative launching this month, aimed at facilitating paid work placements for young people, encouraging employers to join organizations such as EON, JD Sports, Tesco, and TUI, which have already committed their support.
Interestingly, there has been a growth in employment among Londoners aged over 50, largely attributed to an increase in women entering the workforce due to modifications in the State pension scheme.
Overall, the unemployment rate in London has escalated faster than in any other region, reaching a troubling 7.2% during the September to November quarter, establishing the highest rate in the nation. Notably, sectors such as financial and insurance services witnessed a loss of 3,000 jobs, while roles in office administration and related services dropped by 43,000 as companies increasingly adopt artificial intelligence solutions.
Furthermore, the transport and storage industry lost 31,000 jobs, and manufacturing saw a decrease of 14,000 positions. Despite these setbacks, ministers assert that the government is working to provide stability by cutting borrowing and controlling inflation, having implemented six interest rate reductions since the general election in July 2024.
A spokesperson from the Treasury reinforced the government's commitment to stimulate economic growth and create quality job opportunities, maintaining a corporation tax rate of 25%, the lowest within the G7 nations, while supporting local businesses with reduced tax rates and facilitating investment for startups in the UK, all while safeguarding record levels of investment in infrastructure.
