The unemployment rate among young Londoners has long been higher than in the rest of the country. Reasons for that include a significant number coming out of school with fewer than five good GCSEs (even though London’s schools are very successful) and intense competition for work due to the large number of incomers from the rest of the UK and elsewhere looking for jobs.
But lately matters have got worse. Previously, youth unemployment levels varied in line with those for older groups except at times of economic crisis, such as the 2008 global financial crash or during the pandemic. They were, in general, higher than but in parallel with them.
Now, youth unemployment all over England has gone up more sharply than unemployment in general. In London it has risen as high as 17 per cent. Three years ago, it was 14.2 per cent. The problem is especially acute in outer east and parts of outer west London.
Trust for London has been searching for the causes of this. Drawing on Office for National Statistics job vacancy data, it found a “significant drop” in the number of jobs of all kinds advertised online nationally. London saw the largest falls across the board, but particularly among the sorts of job the youngest group of working age Londoners are most likely to apply for.
For example, entry level shop assistant and customer service roles are in far shorter supply than they were three years ago – the number has fallen by more than half. There has been a huge reduction, too, in web and multimedia roles, also popular with younger people. By contrast, Trust for London says, vacancies for skilled trade occupations, caring and leisure services, hairdressing and other “hands-on” roles that need “in person” skills have held up much better.
A big difference is that the former group are types of employment likely to have been affected by the wider use of Artificial Intelligence. The Trust for London analysis is careful not to jump to firm conclusions about this, stressing that “it’s impossible to separate the impact of AI from other factors”. But it notes, as did Richard Derecki when looking into AI’s impact in September, that other studies have found links between the adoption of AI and employers taking on fewer people.
The Trust for London work also points to wider economic uncertainty and high costs making employers cautious, poorly-paid or insecure employment making a lot of jobs almost literally unaffordable, and a lack of the particular skills firms are looking for.
It welcomes the budget confirming that small and medium-sized firms will no longer have to pay for apprenticeships for under-25s, its reforms to the Apprenticeship Levy from April and its improvement to the minimum wage. And its conclusions include the following:
“Rather than letting AI simply displace young workers from entry-level roles, we need proactive policies to ensure young people can benefit from technological change. This means investing in skills training that prepares young people for the jobs of tomorrow, not just yesterday.
Without action, too many young Londoners will be locked out of good work – and inequality in the capital will deepen even further. The evidence is clear: we know what works to support young people into employment. Now we need the political will and investment to make it happen at scale.”
Read the Trust for London research in full here.
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