Young Workers and Welsh Job Market Hit Hardest as Employment Declines
The UK job market took another hit in February, with employment shrinking by 0.4%—a troubling decline fueled by the government's recent hike in employer job taxes. This marks a continued downward trend, with employment growth dropping by an average of 0.3% per month since October, when the increase in National Insurance contributions was announced.
According to the SmartMatch Employment Report by Employment Hero, which tracks real-time data from 105,000 employees across small and medium-sized businesses (SMEs), the latest figures reveal growing concerns for businesses and job seekers alike. With employers now paying an extra £900 per employee annually in tax at the median wage, many SMEs are struggling to sustain their workforce.
Young Workers Bear the Brunt
The downturn is particularly devastating for young workers aged 18-24, whose employment plummeted by 1.8% in February alone—more than four times the overall decline. This sharp drop comes at a time when young job seekers are already facing a tough labor market.
Adding to the pressure, from April 1, the government will enforce a new National Living Wage of £12.25 per hour for all workers aged 21 and above a significant shift from the previous threshold of 23 years. While this aims to boost wages, it also means employers must allocate more funds for salaries, forcing many to cut entry-level roles rather than hire and train younger workers.
Wales Faces the Steepest Job Losses
Regionally, Wales suffered the worst decline, with employment tumbling 3.3% in February, wiping out the steady gains made over the past year. In contrast, Scotland and the South of England saw a 0.9% rise in employment, offering some relief amid the overall contraction.
A Bleak Outlook for Young Job Seekers?
Kevin Fitzgerald, UK Managing Director of Employment Hero, warns that this growing employment gap for young people could have long-term consequences.
"This contraction is particularly worrying because younger workers require more training and support. Rather than hiring them, many SMEs are choosing to absorb the extra workload themselves, as they simply can't afford the additional costs."
With nearly one million young people already out of work or education, experts fear that this number could rise if businesses continue to cut entry-level roles. If this trend persists, young job seekers may find it even harder to step onto the career ladder, worsening the country's youth unemployment crisis. As the job market tightens, both employers and job seekers brace for more uncertainty in the months ahead. Will the government step in to ease the burden, or will businesses be left to navigate these financial pressures alone?
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