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The first young people in Wales have started paid work through the UK Government's Jobs Guarantee. That is genuinely worth marking. A real wage, a skills matched role, support built around the individual for the people involved, it is something concrete, and watching a scheme move from ministerial announcement to actual first day starts is rarer than it should be.
But I find myself looking past the press release and at the number sitting inside it. More than 56,000 young people in Wales are currently not in education, employment or training. The Jobs Guarantee aims to support 3,500 of them over three years. That is not a criticism of the scheme itself. It is a question of scale and more uncomfortably of what drove those 56,000 there in the first place.
The Office for National Statistics has been tracking UK job vacancies for years. What that data shows is a labour market that has been contracting since the post pandemic high of mid 2022. Vacancies peaked at 1.3 million in the three months to May 2022. The latest ONS figures, for May to July 2026, put them at 707,000, a fall of roughly 46%, recorded over more than three consecutive years of quarterly declines. That trend belongs to no single government. It ran through the closing years of Conservative administration and has continued into this Parliament.
What that contraction means in practice shows up in a ratio. By mid 2026, there were 2.5 unemployed people for every available vacancy in the UK. Four years ago that number was closer to one for one. In a market where employers can afford to be selective, the workers who struggle most are those with the least on their CV, the young, those returning after illness or a caring break, those with gaps that need explaining. The longer someone stays out of work, the harder re-entry becomes. That is the structural wall the Jobs Guarantee is trying to help young people over and it is a wall that, on current trends, keeps getting a little higher.
Part of the reason employers stopped hiring is not hard to trace. The October 2024 Budget raised employer National Insurance contributions from 13.8% to 15% and cut the secondary threshold from £9,100 to £5,000, both taking effect from April 2025. The OBR noted at the time that a portion of those costs would pass through to consumers, adding around 0.2% to the consumer price index as businesses adjusted their prices. That adjustment doesn't happen in isolation. Businesses respond to rising payroll costs by freezing recruitment, not replacing staff who leave, pulling back on expansion. Not overnight, and not dramatically, but cumulatively, across hundreds of thousands of employers, it shifts behaviour in one direction, fewer new hires.
That cost pass through also closes in on the same households the government is trying to help. The family managing on a tight budget possibly already relying on Universal Credit to top up a low wage finds the real value of that income shrinking as the weekly shop costs more. The benefit claimant numbers that rise year on year are not simply evidence of reluctance to work. They are at least partly the consequence of a market where the number of people who need a job keeps outpacing the number of jobs available. Higher prices, fewer vacancies, and a benefit system left to absorb the gap.
The Jobs Guarantee, as a policy instrument, is not wrong. For the young people it reaches, it provides something real. But it is funded from the public purse to substitute for private sector demand that isn't materialising. When a placement ends after six months, the young person still has to step into a job market where, on the current trajectory, there are fewer vacancies than when they started. The government's target of 90,000 publicly funded placements by 2029 does not change the size of the private sector vacancy pool they need to enter afterwards. It is, at best, a bridge to a shore that is getting no closer.
What would change the underlying picture is the harder conversation. Business confidence, an environment where employers feel certain enough about demand, costs, and future conditions to expand headcount has been depressed for years. The pandemic disrupted investment cycles, inflation disrupted margins, and the October 2024 Budget arrived at a moment when neither had fully recovered. The government is spending £2.5 billion to help young people into work, which is not nothing. Applying some of that same urgency to asking why employers stopped creating jobs organically would go considerably further. Funding placements is not the same as rebuilding a labour market. One treats the symptom. The other addresses what caused it.