UK youth unemployment spikes to 15.3% amid AI, tax hikes and pandemic fallout

In a brutal economic squeeze, under-25s are bearing the brunt of a rising youth unemployment rate of 15.3% — a mix of weak demand, automation and higher labour costs is driving the crisis. AI and automation are displacing entry-level roles, while a hefty £25 billion rise in employer national insurance has increased firms’ opportunity cost of hiring inexperienced workers. Add in Covid-era schooling disruption and soaring youth minimum wage, and you’ve got a worrying recipe for a generation stuck in limbo.

AI, Covid and taxes: what is behind steep rise in youth unemployment? | Youth unemployment | The Guardian

1. What is the definition of “opportunity cost,” and how does it relate to the article’s discussion of employer national insurance contributions?

2. Assess the factors that have caused the recent increase in youth unemployment.

3. Discuss the likely macroeconomic consequences of rising youth and graduate unemployment.