Close to one million young people are sitting outside the economy entirely, costing the country an estimated £125bn every year, a figure forecast to keep climbing.
That staggering toll forms the backdrop to an imminent government-commissioned report by Alan Milburn on Young People and Work, due for publication next week.
Helen Dickinson, chief executive of the British Retail Consortium, argues the report must go beyond preparing young people for employment and directly confront the cost of hiring them.
One in eight people aged between 16 and 24 is currently neither in education, employment nor training, locked out of a labour market that is becoming structurally less accessible.
The retail sector illustrates how sharply the landscape has deteriorated, with employment costs across the industry rising by roughly £8.5bn between 2024 and 2027.
Over that same period, retailers shed more than 120,000 jobs, eliminating precisely the kind of entry-level, flexible, qualification-free roles that young people without experience depend on most.
Retail’s 2.8 million workers make it one of the largest providers of accessible employment in the country, yet the sector’s capacity to absorb new workers is shrinking under regulatory and cost pressure.
Dickinson identifies employer National Insurance increases as a particular driver, writing that they “have made entry-level jobs unaffordable for too many retailers.”
She also warns that incoming employment rights legislation must be implemented carefully to protect part-time and flexible arrangements, which are disproportionately used by young people entering the workforce for the first time.
The underlying problem for those who remain jobless is self-reinforcing: without a first role, candidates cannot build the track record that employers increasingly demand before extending an offer.
Dickinson describes this as “a doom loop that risks leaving hundreds of thousands of young people behind,” one that welfare reform alone cannot break if the jobs themselves do not exist.
The Milburn report is expected to recommend that the benefits system be restructured to make work more financially attractive, including through stronger incentives for people to take on part-time positions.
Dickinson broadly supports that direction but insists it addresses only one side of the equation, arguing the government must simultaneously act to reduce the costs that deter businesses from recruiting.
She identifies two specific levers available to ministers: increasing consumer spending power to generate demand for labour, and directly reducing the regulatory and financial burden on employers who take on staff.
The retail industry has not waited for government action, with more than 50 retailers signing up to Opening Shift, a joint initiative between the British Retail Consortium and the Department for Work and Pensions.
The programme has so far secured pledges of 11,000 work experience placements, with the stated ambition of helping 100,000 young people find sustainable employment.
Dickinson is careful to note, however, that placements only solve the problem if they lead to genuinely new jobs rather than simply redistributing existing opportunities among different groups of candidates.
The moral dimension runs alongside the economic one, with Dickinson pointing out that employment delivers purpose, confidence, and independence that cannot be replicated by welfare payments alone.
With the Milburn report’s recommendations set to define government policy in this area, Dickinson argues that a supply-side response, cutting the cost of hiring, is as essential as any demand-side investment in skills or training.
The question now is whether ministers will treat the report as a mandate to act on both fronts, or settle for the easier political task of preparing young people for jobs the market is no longer creating.