Lord Wolfson, the chief executive of Next, has informed the BBC that the number of entry-level job opportunities in the UK has experienced a 'dramatic fall,' which is a polite way of saying things are getting worse for young people looking for work.
Two years ago, Next typically received 10 applicants for every job in its shops; now that number has risen to 19. 'That doubling of applicants for shop jobs is indicative of just how big the crisis is in youth unemployment at the moment,' Wolfson said, presumably while not offering any of those 19 people a job.
Wolfson also warned that a ban on zero-hours contracts coming next year would make hiring more difficult. The government calls such contracts 'exploitative' and argues its Employment Rights Act ends 'one-sided flexibility,' which is a fancy way of saying employers can't treat workers like they're optional.
The Conservative peer called on the government to reverse its hike in employer National Insurance rates and minimum wage rises, but conceded that economic growth is the main solution to boosting the jobs market. 'Youth unemployment is really a symptom of wider problems with employment in the economy,' he said, noting that those with the least experience suffer most.
A Treasury spokesperson countered by saying increasing the national minimum wage boosts pay for more than 200,000 young workers and pointed out that employer national insurance contributions are lower when hiring under-21s. 'Cutting wages for the lowest paid during a time of global uncertainty is not the answer,' the spokesperson said, adding that a £2.5bn youth employment support package would 'deliver a million opportunities across the country.'
The Department for Business and Trade, meanwhile, helpfully noted that Wolfson was paid £7m last year, suggesting his sympathy for the working class might have limits.
Latest figures show the unemployment rate for 16 to 24-year-olds is 16.2%, the highest since 2014, and more than three times the rate of general unemployment at 5%. High street retailers and hospitality businesses often offer the first experience of work for young people, but businesses including Next have warned that tax increases and higher minimum wages are affecting their ability to create roles, particularly lower-paid, part-time jobs.
Wolfson said Next had fewer staff in individual shops, but its online business was thriving, and the retailer was increasingly using automation and technology such as self-scanning lockers for returns instead of staff on tills. Because nothing says 'we care about youth employment' like replacing humans with machines.
Next is seen as a high street success story, having hoovered up brands including Joules, Fatface, Cath Kidston, and Made.com, and employs more than 30,000 people. Earlier this month, the retailer increased its full-year profit expectations to £1.2bn, with sales up 6.2% in the first quarter. But Wolfson rejected any suggestion the retailer was choosing shareholders over workers, noting that the average dividend payout to an individual saver will be around £300 a year.
Wolfson also repeated his criticisms of the government's Employment Rights Act, warning that requirements for guaranteed hours for casual workers would make it harder for Next to offer more hours. 'You can't afford to have the same number of people in your shop in February as you have in and around Christmas,' he said, which is bad news for students wanting extra hours during holidays.
The Trades Union Congress countered that the policy was 'hugely popular' and would give insecure workers security they are so badly lacking.
Rather than focusing specifically on solving youth unemployment, Wolfson said the government should focus on reforming planning laws, energy policy, and transport networks to boost overall economic growth. He suggested releasing more land for building, noting that the cost of an acre of agricultural land in the south-east of England was about £15,000, but jumped to as high as £1.5m with planning permission. 'All of these things are holding the economy back,' he said, 'and if government could just take its foot off the brakes, we could have a much, much faster growing economy.'