A new report shows that while young people in London achieve high school results, they face a job shortage similar to trends seen in the United States and Canada.
Many young Londoners are leaving education with excellent results but are then finding it difficult to find work, a new report is warning.
The study by Centre for London highlighted increasing challenges in getting a job in the capital which is threatening to get worse with the impact of artificial intelligence and Andy Burnham's devolution revolution which will see thousands, if not tens of thousands, of posts moved out of Whitehall.
London already has the highest unemployment rate in the country, at 6.5% in the three months to June.
For young Londoners, aged 16 to 24, unemployment was at 19.6%, the highest for 11 years outside the Covid pandemic.
Business chiefs partly blame the jobs crisis on the £20 billion hike in National Insurance for employers imposed by former Chancellor Rachel Reeves which particularly hit sectors which employ large numbers of people on low incomes including hospitality and retail.
The new research, published ahead of the latest figures on Neets (people not in education, employment or training), outlined how in 2025, just 41.3% of Londoners aged 16‑35 were in work, compared with 51.5% across England.
This jobs gap exists despite London outperforming other parts of the country on school attainment.
In the same year, 70.4% of young Londoners achieved a GCSE or similar level 2 qualification by age 16, compared with 61.1% in Greater Manchester, 62.7% across the Oxford‑Cambridge region and 57.6% in the West Midlands.
But, while 80% of London school leavers found a further education course, employment or an apprenticeship for at least six months in 2022/23, only 17% moved into a sustained apprenticeship or employment.
The equivalent figures were 25% in Greater Manchester, 23% in the West Midlands and 30% across Oxford‑Cambridge, the study added.
Work and Pensions Secretary Pat McFadden during a visit to a Boots warehouse to meet young people starting jobs as part of the "Jobs Guarantee" scheme stressed that the capital's labour market has become more difficult for young people seeking work.
Labour market pressures in London
Online job adverts in London fell from more than 273,000 at their peak in May 2022 to just under 98,000 in February 2026, a drop of 64%.
The decline was significantly larger than falls in Greater Manchester where adverts were down by 53%, West Midland by 55% and the Oxford‑Cambridge region by 56%.
Policy response and apprenticeship shortfall
The report highlighted four factors which were particularly hitting London's labour market:
- Many posts still available to Londoners are in professional and higher‑skilled occupations, where entry requirements can be more difficult for young people. Employers are now receiving an average of 86 applications for every graduate vacancy.
- Sectors such as hospitality, retail and wholesale, that have traditionally provided many young people with their first jobs are struggling, failing to recover fully from the Covid pandemic and hit by tax rises and other rising costs.
- Nearly half of London workers are in jobs where AI could automate some tasks, according to a study by City Hall, compared with 38% across the UK, with around 313,000 Londoners in the highest‑exposure group.
- London has fewer apprenticeship opportunities. In 2023/24 there was about one apprenticeship start for every 11 businesses in the capital, compared to one in six in the West Midlands and one in five in the North West.
Analysts note that the United States is grappling with a comparable rise in youth unemployment, prompting federal job‑creation programs.
Canadian officials have similarly warned that the transition from education to stable employment remains a key policy challenge.