The first findings of Alan Milburn's independent review into youth economic inactivity have painted a stark picture of the challenges facing young people in the UK. The report, published recently, reveals that close to one million young individuals are currently categorised as Not in Education, Employment, or Training (NEET). This figure, Milburn warns, could escalate to 1.25 million within the next five years if no substantial interventions are made, pushing the proportion of economically inactive young people from 1 in 8 to a concerning 1 in 6.
A critical distinction highlighted by the review is between unemployment and economic inactivity. While unemployed individuals are actively seeking work, those who are economically inactive are neither working nor looking for employment. The report indicates that young people are now more likely to be economically inactive (53%) than unemployed, with mental health conditions such as anxiety and depression emerging as a significant contributing factor to this trend.
The review also scrutinises the existing support systems, suggesting a severe underinvestment in employment assistance for young people. It estimates that for every £25 the Department for Work & Pensions allocates to benefits for young individuals, only £1 is spent on employment support. Furthermore, the report finds that the current support mechanisms disproportionately benefit those with fewer barriers to employment, leaving many young people furthest from the labour market without adequate help.
Perhaps one of the most sobering findings is the direct experience of job hunting for young people. Milburn's team engaged with young individuals who described a 'job application black hole,' where they faced repeated rejections, often from AI systems or simulations, without ever having the opportunity to interact with a human being. This impersonal process, coupled with employers' reluctance to hire young people for their first jobs due to perceived 'pastoral burdens' and increased minimum wages, creates significant hurdles.
In response to these findings, the Resolution Foundation has begun examining policy levers that could encourage employers to hire more young people. Separately, a private roundtable hosted in May involving researchers, investors, and startups explored how 'workertech' solutions might address the growing issue of economic inactivity and exclusion among young non-graduates. Attendees at this roundtable identified key issues including young people's lack of awareness of available options, difficulty articulating their skills, and a tendency not to view job-seeking as a skill in itself.
The findings of the Milburn Review underscore a pressing societal challenge that demands a multi-faceted approach, combining mental health support, reformed employment services, and potentially technological solutions to bridge the gap between young people and the labour market.