Marvin OnumonuOne million young people in the UK are out of work, with many being pushed out of jobs by higher payroll taxes, more generous benefits, and mass migration, research from the Centre for Social Justice (CSJ) found.
Between January 2020 and December 2024, there were 49,000 fewer British under 25s on payrolls, while under 25s from outside the EU in jobs rose by 258,000.
The CSJ said employers have hired more non-EU migrants for roles in retail and hospitality, where jobs do not need many qualifications.
At the same time, thousands of young British people have moved onto benefits for anxiety and depression.
There was a 315% increase in under 25s from outside the EU on payrolls, according to HMRC figures.
The number of young people not in employment, education or training (NEETs) has gone up, with many citing mental health issues.
Over the last year, payroll numbers for under 25s dropped by 119,000.
Economic inactivity for 16 to 24 year olds, excluding students, went up by 23%.
One in eight young people in this age group are not in education, employment or training.
The CSJ warned that being a NEET affects future life chances, especially for young men, who are ten times more likely to stay out of work 20 years later.
The number of NEETs not working due to sickness rose by half since 2019, with most reporting mental or emotional health problems.
Of 250,000 NEETs not working due to sickness, 62% said they had mental or emotional difficulties.
The CSJ called for action to get British youngsters into work and reduce reliance on migration.
It recommended a new ‘future workforce credit’ to encourage employers to hire NEETs, as existing schemes were rarely used.
The credit would pay employers 30% of a NEET’s salary, half upfront and half after six months’ work.
In the first year, CSJ estimated the scheme could help nearly 120,000 NEETs find jobs, almost reversing the increase seen since the pandemic.
Modelling by the CSJ found the credit would be fiscally positive, producing £765 million in tax and welfare savings.
The £670m cost would be covered by cutting universal credit health eligibility for under 22s.
The CSJ suggested this would save £7.4bn, with at least £1bn reinvested in NHS talking therapies and employment support.
Additionally, the CSJ said employers should have to advertise jobs to local workers before offering them to work visa applicants.
It also called for an expansion of the connect to work scheme and sector-based work academy programmes.
Former Secretary of State for Education and Employment David Blunkett, said: “The last Labour Government’s New Deal for Young People proved that with the right approach we can take young people away from a life on benefits and into the world of work, growing the economy and transforming lives at the same time.
“I welcome this plan from the Centre for Social Justice, in particular the proposed Future Workforce Credit to help employers hire and upskill a new generation of talent.
“This is how we stop hundreds of thousands being written off and get Britain working again.”
Fromer Chancellor Jeremy Hunt, said: “This is an important and timely report. The sharp rise in economic inactivity among young people is one of the biggest structural threats to our long-term growth and public finances.
“The Centre for Social Justice has set out a serious plan to get Britain’s young people back to work.
“I strongly support the principle behind the Future Workforce Credit and their proposals to reform mental health benefits.”
Hunt added: “Given the soaring cost of hiring, ministers must take bold action this Autumn to support businesses and help more British youngsters reap all of the benefits that come with a job. The future of our economy depends on it.”
Joe Shalam, policy director at the CSJ, said: “We know it will be a difficult Autumn for the Government but businesses and British youngsters desperately need a break.
“To achieve growth we must build a more resilient economic model, ending uncontrolled mass migration and unlocking the talent in our communities instead.
“The Prime Minister is right, one million jobless young people is a moral and economic disaster.”
Shalam added: “At a time when many under 25s are feeling down and out, and with employers struggling to pay the bills, the CSJ’s plan would boost the economy, reduce the benefit bill and most importantly, change lives.”
Kieran Breen, CEO of Leicestershire Cares, said: “Giving employers a financial incentive to hire NEET young people is an excellent one.
“Some of our young people are really keen to work and just need an understanding of what’s available.
“There are others who have an ‘Uber Mindset’ towards work, meaning they want a more flexible situation which usually isn’t available for their skillset.”
Breen added: “However, we work with a lot of businesses who – once they make connections with young people – are keen to bring them on board.
“The Future Workforce Credit is a positive step forward to bringing young people into the economy and encouraging employers to take a second look at this forgotten generation.”
