Warning over lack of entry-level jobs in the UK

Key Points

Lord Wolfson, chief executive of Next, has warned of a dramatic fall in entry-level jobs in the UK.
He criticised the government's hike in minimum wage for young people and increases in NI payments for employers, arguing these could be making the crisis worse.
The retail sector is the biggest employer of young people in the UK, and the BRC previously warned that Labour's reforms could imperil the job market for Gen Z's looking for flexible work.
This comes as the advent of AI looks poised to cause job cuts across several major industries.

Next chief executive Lord Wolfson has warned that the UK is seeing a “dramatic fall” in entry-level jobs, which is contributing to the country’s youth unemployment crisis.

Speaking in an interview with the BBC, the retail chain executive said that two years ago, Next received around 10 job applications for every open position at its shops.

He told the BBC that number has now risen to roughly 19 applications per job.

“That doubling of applicants for shop jobs is indicative of just how big the crisis is in youth unemployment at the moment,” he said.

Wolfson took aim at Labour’s employment rights reforms, urging the government to reconsider its minimum wage increases and the increase in NI payments for employers.

He said that while economic growth was the primary solution to the crisis in youth unemployment and improving the health of the UK job market, these measures make it more difficult for companies to hire young people.

In response, a Treasury spokesperson told the BBC that cutting wages for the lowest paid in the country at a time of global uncertainty was not the answer to solving, adding that it has deployed a £2.5-billion youth employment support package to help solve the growing youth unemployment crisis.

Bad news for Gen Z

The government’s push to improve workers rights, through measures such as a hike in minimum wage and guaranteed hours for younger workers, has already drawn criticism from the retail industry.

In March, the British Retail Consortium (BRC) warned that Gen Z workers could be hit hard by Labour’s employment rights changes, as retailers found it more difficult to offer part-time or flexible roles.

The BRC’s data reveals that around 780,000 retail jobs are held by 16-25-year-olds, accounting for 28% of the industry’s total workforce.

Considering the concerning rise in unemployment amongst young people, the BRC warned that ending flexible working, which is currently mostly fulfilled by Gen Z workers, would result in fewer opportunities for younger workers and potentially exacerbate the employment crisis.

“Retailers want the Employment Rights Act to live up to its ambition and raise standards and improve job security,” BRC chief executive Helen Dickinson said.

“But at a time when youth unemployment is high and rising, Government must ensure reforms double down on tackling bad practices and don’t choke off the routes into a first job for the next generation.”

At the same time as youth unemployment is growing and fewer opportunities are being made available to younger people, the UK is also contending with looming job cuts due to the impact of AI.

Recent data shows that half of the UK public believe that AI-induced job losses will be worse than a normal recession, with this figure rising to 56% among university students.

Employers may more optimistic about the potential positive effects of AI, as they are more likely to expect new opportunities to emerge, but the majority of employers and workers are still concerned about the impact of AI on the job market.