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When Keir Starmer was 14 years old, he got a part-time job clearing stones from a local farmer’s field. At 16, Kemi Badenoch was flipping burgers and cleaning toilets in McDonald’s. Me, I waitressed at weekends from the age of 15 in an Essex pub owned by an ex-paratrooper with two formidable rottweilers roaming behind the bar, which was a life lesson all of its own.
But whatever your first job may have been, there’s a reasonable chance it combined the thrill of hard cash with several mortifying mistakes and a crash course in handling stroppy customers, taking criticism more or less gracefully and moaning about it only out of earshot. Though teenage starter jobs have been in decline for decades – for reasons varying from academic pressures on sixth-formers to the rise of side hustles on Vinted that don’t show up in official statistics – everyone still has to start somewhere, even if it’s now more likely at 18 than 14. But getting that start is becoming harder than it was.
This week, unemployment rates for 18- to 24-year-olds hit a high not seen outside the pandemic since 2015. School leavers are now competing for work stacking shelves or pulling pints with overqualified new graduates who can’t find graduate jobs, at a time when pubs, shops and cafes don’t seem to be hiring. Even those employers strong enough to have survived lockdown routinely complain that it’s getting too expensive to hire staff – especially young ones.
The Centre for Policy Studies thinktank calculates that it will cost 26% more to hire an 18- to 20-year-old by this spring than it did in 2024. That reflects government decisions taken for perfectly good reasons, including hiking employers’ national insurance to fund the NHS, plus two chunky rises to the minimum wage for the under-20s (now £10 an hour) in line with manifesto promises to level it up with the higher adult rate (now £12.21) over the course of a parliament. No matter how noble the motive, once it costs the same to hire four teenage Starmers as it once did to hire five, there are likely to be consequences. Yet until this week, when an internal Labour argument about whether they could be inadvertently pricing young people out of work spilled on to newspaper front pages, political debate over why so many young people don’t have jobs has mostly involved blaming them for being anxious snowflakes. Injury, meet insult.
So in some ways it was refreshing to hear the former minister Alan Milburn, charged with reviewing why record numbers of 16- to 24-year-olds are neither earning or learning, finally concede this week that this complex puzzle isn’t simply explained by a teenage mental health crisis. Anxiety, ADHD and autism diagnoses are rising worldwide, he told the BBC, but elsewhere that doesn’t seem to be driving teenagers out of work: our rates of young people not in education, employment or training (Neet) are treble those of the Netherlands. (Incidentally, Dutch teenagers have a significantly lower minimum wage than Dutch adults.) His review is now considering economic factors. At least everyone can now be honest about what may or may not be going on.
But with candour comes risks. The politics of watering down a manifesto pledge on the youth minimum wage would be hideous, and not just because it would be the latest in a painful run of U-turns. Dumping or delaying it would put Starmer in direct conflict not only with trade unions but with Angela Rayner, a more formidable political organiser than anyone in No 10.
Give an inch on minimum wage, meanwhile, and the fear is that business will try to take a mile, pushing to delay the rollout of Rayner’s broader flagship package of workers’ rights until the economy is stronger.
We have, of course, been around this block many times before. Every time new employment rights are introduced, employers claim they’ll cost jobs, and in a growing economy they often turn out to be crying wolf. But this time it’s not just the usual suspects howling.
George Bain, who led the low pay commission that pushed through the original minimum wage against considerable corporate opposition, now believes a rising youth minimum wage is pushing up youth unemployment. I’ve heard the same from other veterans of the era. Gordon Brown, as chancellor, set a lower rate for the young precisely to encourage employers to take a risk on people needing first jobs. If you’re a pub landlord choosing between a gawky sixth former with no experience who will need closely supervising, and a seasoned 27-year-old with good references, who would you hire? Especially if the older one needs the job to pay their rent while the younger is mostly trying to save up for Reading festival tickets.
For the lower rate also tacitly recognised that most under-20s aren’t wholly supporting themselves. Today, that’s if anything more true, with almost three-quarters of 19-year-olds and 61% of 20-year-olds still living with their parents, in homes where someone else probably fills the fridge. The vulnerable teenagers for whom that’s sadly not true, including those estranged from their families, meanwhile need the kind of intensive support that comes most reliably from in-work benefits.
Almost 27 years on from its introduction, the minimum wage has drifted from its original purpose of ending exploitation. The idea was to create a decent floor from which people could rise into better jobs, helped by a booming economy: it was never the sole lever for raising living standards. But as successive governments struggled to reignite that boom, the minimum wage had to do more and more of the heavy lifting. There was always going to be a ceiling on how much employers could reasonably afford to pay, and now we may be hitting it.
One cynical view of what’s happening is that the Treasury is privately prepared to see unemployment rise and some zombie businesses go to the wall in return for transitioning to a more productive hi-tech economy. If so, good luck selling that to a country that never voted for a re-run of the 1980s.
But in the altogether less dramatic event that ministers conclude they’ve simply got the balance wrong for young people, as one minister hinted to the Times this week, then any tinkering is best done under cover of a broader rethink of how working poverty has changed since 1999. The worst option of all, meanwhile, would be to plough stubbornly on with something everyone worries might be making young people’s lives harder, just to avoid the embarrassment of admitting that for once your enemies might be right.
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Gaby Hinsliff is a Guardian columnist
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