Why young workers are getting left behind—again

Across boardrooms in London, Dubai, and Riyadh, something quietly consequential is taking place: employers are reshaping what early-career work means—and what it’s worth. Youth unemployment is creeping up across Western markets, while wage progression in early roles stagnates. Meanwhile, in MENA, junior hiring is rising—but increasingly skewed toward nationals or subsidized internship pathways.

This divergence is not just generational churn. It’s structural, and it’s strategic. While some markets are doubling down on youth as a long-term asset class, others are pricing early talent as a cost to minimize or defer. This shift isn’t temporary. It reflects a recalibration of what early workers represent in the modern business model: potential, or liability.

Much of the post-COVID narrative focused on worker shortages and wage inflation. But for younger workers, that narrative broke early. In the UK, youth unemployment sits stubbornly higher than the general rate. In France and Italy, jobless rates for under-25s remain double the national average. And even where jobs exist, wage floors aren’t keeping up. In the UK, inflation-adjusted pay for young workers has declined nearly 8% since 2008.

Meanwhile, the GCC tells a different story. In Saudi Arabia and the UAE, youth hiring is being actively subsidized through nationalisation schemes. Yet even there, wage compression persists—particularly for early-career expats and foreign-trained graduates. Roles are often temporary, project-based, or filtered through subsidized “graduate programs” that cap compensation and delay progression.

Behind the divergence lies a shared tension: employers everywhere are trying to de-risk talent bets. But the response looks different depending on market maturity, workforce composition, and political mandate.

The deeper shift isn’t just in the number of roles available—it’s in how those roles are structured. In legacy economies like the UK and France, traditional entry-level paths are being hollowed out. Graduate programs have been downsized, training budgets slashed, and many junior roles outsourced to staffing agencies or converted to freelance platforms. This atomizes responsibility and flattens career progression.

For employers, this approach preserves flexibility and limits long-term cost exposure. For younger workers, it breaks the scaffolding that once led to stability, skill development, and upward mobility. The old social contract—start low, learn fast, move up—no longer holds. What replaces it is a revolving door of short-term roles with little compounding value.

In MENA, the approach is slightly more structured—but still cautious. State-mandated Saudization or Emiratization quotas have forced employers to hire young nationals, but many of these hires are clustered in support functions or short-term project tracks. Salaries are often subsidized by government programs, and promotion ladders remain opaque. The signal is mixed: talent is welcome, but only within a defined, controlled cost perimeter.

To understand this reset, follow the logic backwards. Junior hires come with onboarding cost, productivity ramp time, and high churn risk. In tight-margin environments, those variables look increasingly unattractive. So employers have adapted. Not by raising the bar—but by moving the goalposts entirely.

Instead of investing in internal development, many firms now outsource skill-building to the market. They expect candidates to arrive pre-trained, often through unpaid internships, bootcamps, or personal freelance experience. The result? A two-speed entry system—those who can afford to pre-pay for relevance, and those left circling outside.

In consulting, tech, and retail operations, firms are optimizing for short-term utility. They hire not to build capability but to plug gaps. The classic HR line—“We invest in our people”—has quietly been rewritten to: “We rent for relevance.”

Some regions have interpreted the youth labor problem differently. In Saudi Arabia, for instance, the Human Capability Development Program (HCDP) is explicitly designed to “bridge the education-to-employment gap.” It channels funding into vocational training, public-private apprenticeship pathways, and industry partnerships. While still uneven, the initiative has created real traction—especially in logistics, tech, and tourism-linked sectors.

In the UK, by contrast, apprenticeship schemes remain underfunded and fragmented. Employers complain about red tape; young people cite low pay and limited long-term payoff. The result is a market where young workers feel priced out, and firms see little upside in building from within. What the Gulf understands—and the West increasingly forgets—is that youth employment is not just an HR issue. It’s a strategic lever for national resilience, innovation pipelines, and domestic demand growth. Failing to mobilize it is not neutral. It’s costly.

Beyond the policy mechanics, there’s a mood shift brewing. Many younger workers, especially in Europe, no longer see traditional employment as aspirational. This isn’t laziness—it’s calculus. Why enter a system that promises little upward mobility, slow wage growth, and rising living costs? Instead, some opt for freelance patchwork, digital side hustles, or informal gig work. Others exit entirely—delaying entry into the workforce, pursuing extended education, or relying on family support. But all these routes reinforce the same signal: the system feels mispriced.

This trend carries reputational risk for employers. A generation that perceives itself as undervalued will not build loyalty. They will not stay for marginal gains. They will reallocate their effort elsewhere—and the talent dividend will flow to the ecosystems that meet them with conviction, not contingency.

While much of the West wrestles with the optics of youth underemployment, India and Southeast Asia are scaling a different playbook. In India, schemes like Skill India and the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) focus squarely on skilling the youth population for high-growth industries, with strong private sector alignment. The talent pool is large, yes—but more importantly, it’s being framed as investable.

In Southeast Asia, countries like Vietnam and Indonesia are anchoring foreign investment pipelines to youth employment guarantees. Industrial parks come with training academies. Tech firms launch bootcamp-linked hiring tracks. The message is coherent: youth labour is not a margin drain—it’s an asset worth priming.

Contrast this with UK job boards saturated with “graduate roles” that pay less than living wage, or Gulf firms that rotate interns through endless trial cycles without conversion. It’s not just economic divergence. It’s a narrative split: who believes their youth are worth the margin?

When youth unemployment rises and wages stagnate, the reflex is to blame macro conditions. But underneath the data is a strategic posture—a collective choice by employers and policymakers about what early talent is for. In regions where youth are seen as a burden, the system responds with delay, discounting, and disengagement. In markets where youth are positioned as leverage, the architecture of opportunity gets built—training tracks, hiring mandates, wage progression pathways.

This isn’t just about fairness. It’s about capability. Economies that don’t renew their talent pipelines at the front will eventually find the middle thinning and the top aging out. Wage suppression may buy runway. But it won’t build resilience. There’s also reputational capital at stake. Talent watches how it’s treated. And in a hyper-networked world, employer brands spread faster than policy reforms. Regions that choose cost control over conviction may find their brightest opting out—not out of apathy, but strategic clarity.

This isn’t a labor story. It’s a mispriced growth model.