A new report from the Resolution Foundation has sounded a stark alarm: Britain’s young people are facing a narrowing of opportunities not seen since the interwar years. The study, titled ‘The New Low Paid’, documents a structural shift in the labour market that has left one in three young workers in low-paid jobs, up from one in four two decades ago. This is not a cyclical downturn, but a geological shift in the economy’s bedrock.
The data are unequivocal. Real wages for workers under 30 have stagnated since 2005, while housing costs have risen by 60% in the same period. The result is a generation trapped between precarious employment and unaffordable housing, unable to accumulate the capital or skills needed to progress.
The report’s authors describe this as a ‘lost generation’ scenario, echoing the language used after the 2008 financial crisis. But the parallels with the 1930s are more apt: a permanent underclass of young people excluded from the economic mainstream. The government’s response has been to point to record employment levels, but this masks the quality of that employment.
Zero-hour contracts, gig work, and part-time roles have proliferated, filling the statistics with bodies but not with stability. The education system has not helped: tuition fees and student debt have soared, while vocational training has been neglected. The result is a mismatch between the skills young people possess and those demanded by high-growth industries.
For a country facing demographic decline and a transition to net-zero, this is a self-inflicted wound. We cannot afford to waste the potential of an entire cohort. The solution requires a reimagining of the social contract: higher minimum wages, stronger collective bargaining, and a massive investment in affordable housing and lifelong learning.
The alternative is a slow-burn crisis that will erode social cohesion for decades. The science of economics is clear: when opportunities shrink, societies fracture. The choice is ours.
