1 00:00:00,000 --> 00:00:02,037 Right now, somewhere in a wealthy country, 2 00:00:02,120 --> 00:00:05,672 there's a young person who woke up this morning with no work, no school, 3 00:00:05,755 --> 00:00:07,297 and no plan to look for either. 4 00:00:07,380 --> 00:00:10,680 and tomorrow will be the same and the day after that. 5 00:00:10,763 --> 00:00:15,468 Except it's not just one person. Today, 262 million young people are living 6 00:00:15,551 --> 00:00:20,020 exactly like this. That's 1 in 4 worldwide. And they even have a name. 7 00:00:20,130 --> 00:00:24,130 They're called NEETs, not an employment education or training. 8 00:00:24,240 --> 00:00:27,981 Now, the instinct most people have when they hear that is pretty predictable. 9 00:00:28,065 --> 00:00:31,687 Lazy generation, too soft, should just get off their phones and get a job. 10 00:00:31,770 --> 00:00:35,094 If you've ever had to sit through a family dinner with anyone over 55, 11 00:00:35,178 --> 00:00:37,577 you've probably heard some version of this already. 12 00:00:37,660 --> 00:00:39,719 But the data tells a more complicated story, 13 00:00:39,802 --> 00:00:43,370 because youth unemployment has actually been going down across most wealthy 14 00:00:43,453 --> 00:00:44,617 nations at the same time. 15 00:00:44,700 --> 00:00:47,940 So by the official measure, young people are doing fine. 16 00:00:48,030 --> 00:00:52,176 It's just that the official measure of youth unemployment only counts people who 17 00:00:52,259 --> 00:00:55,400 are actively looking for jobs, so it misses the rest of them. 18 00:00:55,484 --> 00:00:57,938 For every young person counted in a... With Zip, 19 00:00:58,021 --> 00:01:01,427 you can get the filling you need and the flights to Fiji you want. 20 00:01:01,510 --> 00:01:03,911 You can get what you need want. It pays to Zip. 21 00:01:03,995 --> 00:01:06,184 T's and C's credit approval criteria apply. 22 00:01:06,268 --> 00:01:08,827 Credit provided by Zip Money Payments Pty Limited. 23 00:01:08,911 --> 00:01:11,999 Australian Credit License 441878....unemployment statistics, 24 00:01:12,083 --> 00:01:14,990 there are roughly three more who aren't counted at all. 25 00:01:18,030 --> 00:01:21,668 lazy ones your uncle was talking about at dinner. But if your uncle were right, 26 00:01:21,751 --> 00:01:25,436 the picture would look very different. You wouldn't expect it to skew so heavily 27 00:01:25,520 --> 00:01:27,980 toward people with health conditions and disabilities, 28 00:01:28,063 --> 00:01:30,948 or to be concentrated in places where jobs are hardest to find. 29 00:01:31,031 --> 00:01:34,009 And you wouldn't expect it to be getting worse in countries that, 30 00:01:34,093 --> 00:01:36,789 by every other economic measure, are supposedly doing well. 31 00:01:36,872 --> 00:01:40,274 Something structural is going on. The foundational promise of every modern 32 00:01:40,358 --> 00:01:43,666 economy is that each generation enters the workforce, contributes to it, 33 00:01:43,749 --> 00:01:44,599 and does a little 34 00:01:48,030 --> 00:01:51,756 share of young people is struggling to become economically active at all, 35 00:01:51,839 --> 00:01:54,522 let alone build a better life than their parents. So, 36 00:01:54,605 --> 00:01:58,383 what exactly is a NEAT and why does it tell us something about the economy 37 00:01:58,466 --> 00:02:02,453 that unemployment figures never could? Why is this happening now and why is it 38 00:02:02,537 --> 00:02:03,997 happening everywhere at once? 39 00:02:04,080 --> 00:02:08,520 And finally, what does it actually cost and do we already know how to fix it? 40 00:02:08,940 --> 00:02:12,453 Now, to understand why the NEAT number tells us something the unemployment rate 41 00:02:12,536 --> 00:02:15,684 never could, you need to understand how the unemployment rate is built. 42 00:02:15,768 --> 00:02:19,371 The unemployment rate counts people who don't have a job and are actively looking 43 00:02:19,454 --> 00:02:21,738 for one. And actively is the word that matters here. 44 00:02:21,821 --> 00:02:25,061 Because to be counted as unemployed, you have to be sending applications, 45 00:02:25,144 --> 00:02:27,382 attending interviews, registering with job centres, 46 00:02:27,466 --> 00:02:30,614 and responding to job listings. The moment you stop doing those things, 47 00:02:30,697 --> 00:02:34,255 for whatever reason, you're no longer unemployed and become what economists call 48 00:02:34,339 --> 00:02:35,439 economically inactive, 49 00:02:38,940 --> 00:02:42,644 you. Since unemployment benefits in most countries are tied to actively looking 50 00:02:42,728 --> 00:02:45,238 for work, stopping looking cuts you off from the support. 51 00:02:45,321 --> 00:02:48,469 The unemployment rate is useful for counting people available and ready 52 00:02:48,552 --> 00:02:51,655 to work right now, but it was never designed to answer the much bigger 53 00:02:51,738 --> 00:02:55,295 question of how many young people are genuinely struggling to build a productive 54 00:02:55,379 --> 00:02:57,434 life. And that means it misses a lot of people, 55 00:02:57,517 --> 00:03:01,029 like the ones who stopped looking after months of rejection and those who can't 56 00:03:01,112 --> 00:03:04,447 work because of a health condition that has never been formally diagnosed. 57 00:03:04,530 --> 00:03:07,981 There are also the ones caring for a sick parent or a young child with no one else 58 00:03:08,064 --> 00:03:11,601 to help, and those who live in towns where the available jobs pay less than the cost 59 00:03:11,685 --> 00:03:15,006 of getting to them. None of these people are unemployed in the technical sense, 60 00:03:15,089 --> 00:03:18,626 they're just invisible to the economy and the neat measure was invented specifically 61 00:03:18,710 --> 00:03:22,375 to fine them. By capturing everyone between 15 and 24 who isn't working, 62 00:03:22,459 --> 00:03:26,288 studying or in any formal training, regardless of whether they're looking 63 00:03:26,371 --> 00:03:30,522 or not, we're able to get a much more complete picture of what's actually going 64 00:03:30,605 --> 00:03:33,845 on. In 2023, only 6% of young people globally were unemployed, 65 00:03:33,928 --> 00:03:38,240 but 20.4% were NEAT. Now it's worth being honest about what's inside that measure, 66 00:03:38,323 --> 00:03:42,152 because not every NEAT is the same, and if you treat them as if they are, 67 00:03:42,236 --> 00:03:45,130 the policy response ends up aimed at the wrong people. 68 00:03:49,350 --> 00:03:51,667 countries where the story looks quite different. 69 00:03:51,750 --> 00:03:54,983 There, entire regions lack the infrastructure for formal employment, 70 00:03:55,066 --> 00:03:57,665 and in parts of sub-Saharan Africa and the Middle East, 71 00:03:57,748 --> 00:04:00,347 conflict has simply made education and work impossible. 72 00:04:00,431 --> 00:04:04,395 In most of those regions, young women are also kept out of work by early motherhood 73 00:04:04,478 --> 00:04:07,419 or cultural expectations. Those are real and serious problems, 74 00:04:07,502 --> 00:04:09,467 but they're a topic for a different video. 75 00:04:09,550 --> 00:04:12,344 What we're focused on here is the needs in wealthy nations. 76 00:04:12,428 --> 00:04:15,612 These countries have functioning economies, good education systems, 77 00:04:15,695 --> 00:04:18,745 and social safety nets, and yet the problem exists there too. 78 00:04:21,750 --> 00:04:25,230 two very different groups of needs, living very different lives. 79 00:04:25,350 --> 00:04:27,314 The first group are the voluntarily disengaged. 80 00:04:27,398 --> 00:04:29,492 These are young people who have made a deliberate, 81 00:04:29,576 --> 00:04:33,065 if sometimes questionable, choice to step back from the conventional path for now, 82 00:04:33,148 --> 00:04:35,635 or they are simply between things and on their way back in. 83 00:04:35,718 --> 00:04:38,902 Some are holding out for the right opportunity rather than taking the first 84 00:04:38,986 --> 00:04:42,387 thing that comes along, while others are trying to build something on their own. 85 00:04:42,471 --> 00:04:45,873 And some, if we're being honest, are just riding it out at their parents' house, 86 00:04:45,956 --> 00:04:47,556 waiting for something to change. 87 00:04:55,350 --> 00:04:58,807 But they're a minority, and a smaller one than the headlines tend to suggest. 88 00:04:58,890 --> 00:05:01,014 In Europe, where we have the most detailed data, 89 00:05:01,097 --> 00:05:04,784 they account for only one in five NEETs. The other four in five are people who are 90 00:05:04,867 --> 00:05:08,324 disconnected from work or education, less by choice and more by circumstance. 91 00:05:08,407 --> 00:05:10,807 Some are actively looking for work but not finding it, 92 00:05:10,890 --> 00:05:14,439 while others have become discouraged after so many rejections that they stopped 93 00:05:14,522 --> 00:05:15,422 trying altogether. 94 00:05:25,350 --> 00:05:28,834 86% in 2015 to 44% in 2025, nearly doubling in a single decade. 95 00:05:28,917 --> 00:05:32,968 Then there are young people with caretaking responsibilities and this one 96 00:05:33,051 --> 00:05:36,762 skews heavily female. 1 in 5 NEAT women are looking after children, 97 00:05:36,845 --> 00:05:41,178 compared to just 1 in 30 for young men. When childcare costs more than the job 98 00:05:41,262 --> 00:05:43,953 pays, or when there's simply nobody else to help, 99 00:05:44,036 --> 00:05:48,143 the choice to work doesn't exist. Now despite how different the situations 100 00:05:48,226 --> 00:05:52,507 of the vulnerable NEATs are, the data points to the same profile every time. 101 00:05:52,590 --> 00:05:54,815 They tend to come from lower income families. 102 00:05:54,898 --> 00:05:57,790 They're more likely to live in rural areas than in cities, 103 00:05:57,873 --> 00:06:01,226 and the less education someone has, the higher the risk. In the US, 104 00:06:01,309 --> 00:06:04,406 a quarter come from families earning less than $25,000 a year, 105 00:06:04,489 --> 00:06:08,467 and the rate among black youth is more than 50% higher than among white youth. 106 00:06:08,550 --> 00:06:11,868 Patterns like these point much more towards structural disadvantage than 107 00:06:11,952 --> 00:06:14,514 individual choice. If this were just a laziness problem, 108 00:06:14,597 --> 00:06:18,388 you wouldn't have nearly a million young people in the UK sitting in this category 109 00:06:18,471 --> 00:06:21,978 right now. The highest number in over a decade in a country that spent years 110 00:06:22,062 --> 00:06:25,616 making progress on exactly this problem. And while meat rates in most wealthy 111 00:06:25,699 --> 00:06:28,970 countries have been improving for years, that progress has now stalled. 112 00:06:29,053 --> 00:06:31,049 Now at this point you're probably wondering, 113 00:06:31,132 --> 00:06:33,883 if these young people have no paycheck and no training wage, 114 00:06:33,967 --> 00:06:37,717 who's actually paying for dinner? The short answer is mostly their parents. 115 00:06:38,550 --> 00:06:42,201 more than half of American parents with a child over 18 are providing financial 116 00:06:42,284 --> 00:06:44,470 support, at an average of nearly $1,500 a month. 117 00:06:44,553 --> 00:06:48,015 The state picks up some of the rest, mostly through health-related benefits 118 00:06:48,098 --> 00:06:51,134 for those who can't work. But the full answer is more complicated. 119 00:06:51,218 --> 00:06:53,309 We go into it in depth in our next newsletter, 120 00:06:53,392 --> 00:06:56,317 which you can subscribe to through the link in the description. 121 00:06:56,400 --> 00:07:00,610 So how did we get here? Why is the economy failing so many young people? 122 00:07:00,900 --> 00:07:03,816 The honest answer is that this didn't happen because of one thing. 123 00:07:03,899 --> 00:07:07,178 Several things went wrong at once and young people ran into all of them at 124 00:07:07,261 --> 00:07:10,237 the start of adult life when you have nothing to cushion the fall. 125 00:07:10,320 --> 00:07:14,010 For most of the 20th century, the economy had a reasonably reliable first rung 126 00:07:14,093 --> 00:07:17,058 on the ladder. Jobs like factory work, admin roles, data entry, 127 00:07:17,141 --> 00:07:20,395 retail management or customer service didn't require much experience. 128 00:07:20,479 --> 00:07:24,265 Entry level jobs also paid a living wage and taught you enough about how to show 129 00:07:24,349 --> 00:07:27,894 up, take direction and build a work history that the next job became easier 130 00:07:27,977 --> 00:07:31,812 to get. They weren't glamorous, but for an 18 year old with no credentials and no 131 00:07:31,895 --> 00:07:33,487 connections, they were the way in. 132 00:07:33,570 --> 00:07:37,018 Those jobs are now disappearing. Automation took the most routine roles 133 00:07:37,102 --> 00:07:40,600 first, like data entry, basic processing and repetitive customer service 134 00:07:40,683 --> 00:07:44,381 interactions, and now AI is doing the same to entry level white collar work. 135 00:07:44,464 --> 00:07:48,509 Between late 2022 and mid 2025, employment for new workers in the jobs most exposed 136 00:07:48,593 --> 00:07:52,439 to AI fell 6%, while older workers in those same fields actually saw employment 137 00:07:52,522 --> 00:07:55,075 grow. The gig economy absorbed much of what remained, 138 00:07:55,159 --> 00:07:59,105 replacing stable entry level employment with flexible work that sounds appealing, 139 00:07:59,188 --> 00:08:02,688 until you realize it offers no progression, no training and no way up. 140 00:08:02,880 --> 00:08:05,773 Now, the obvious response to all of this is "go to university, 141 00:08:05,856 --> 00:08:08,749 get the degree and that should open the door to better roles". 142 00:08:08,832 --> 00:08:12,445 And despite everything, it's true that a degree is still effectively required 143 00:08:12,528 --> 00:08:15,277 for most good jobs, whatever the job posting actually says. 144 00:08:15,360 --> 00:08:19,021 Companies have spent the last few years publicly dropping degree requirements, 145 00:08:19,104 --> 00:08:22,573 but fewer than one in 700 new hires actually benefited from those changes. 146 00:08:22,656 --> 00:08:24,589 So the degree is still the price of entry. 147 00:08:24,672 --> 00:08:28,237 The problem is what it now costs to get one and what it actually delivers on 148 00:08:28,320 --> 00:08:31,702 the other side. In the UK, tuition fees tripled in 2012. In the US, 149 00:08:31,786 --> 00:08:35,599 the average student borrower carries nearly $40,000 in federal debt alone. 150 00:08:35,683 --> 00:08:39,760 Young people took on that debt on the reasonable assumption that a degree would 151 00:08:39,843 --> 00:08:43,687 translate into a graduate level job, but the labour market hasn't kept up. 152 00:08:43,770 --> 00:08:48,135 In 2024 over a million students graduated from UK universities in a single year, 153 00:08:48,218 --> 00:08:52,583 but the share of them landing in roles that actually require a degree has fallen 154 00:08:52,666 --> 00:08:54,367 to its lowest level since 2014. 155 00:08:54,450 --> 00:08:57,937 And for the first time on record, the unemployment rate for recent US graduates 156 00:08:58,020 --> 00:09:00,337 has started to exceed the overall unemployment rate. 157 00:09:00,420 --> 00:09:04,006 So the degree costs more than it used to and delivers less than it promised. 158 00:09:04,089 --> 00:09:07,357 And the jobs that didn't require one have largely disappeared anyway. 159 00:09:07,440 --> 00:09:10,427 On top of all that, the post-pandemic hiring boom has cooled, 160 00:09:10,511 --> 00:09:14,303 hitting young workers first. In the UK, employment among young people in 2025 161 00:09:14,387 --> 00:09:16,669 still hadn't recovered to where it was in 2019, 162 00:09:16,752 --> 00:09:19,136 even as adult employment has grown steadily. Now, 163 00:09:19,219 --> 00:09:23,112 that alone would be a serious problem, but it's also happening at a moment when 164 00:09:23,196 --> 00:09:26,485 getting to the jobs that do exist has become a challenge in itself. 165 00:09:26,568 --> 00:09:29,908 The best jobs in any given field tend to cluster in specific cities, 166 00:09:29,991 --> 00:09:32,626 finance in London and New York, tech in San Francisco. 167 00:09:32,709 --> 00:09:35,780 For previous generations, moving to where the opportunity was 168 00:09:37,440 --> 00:09:41,242 a reasonable rent. In 1960 the typical renter spent less than a fifth of 169 00:09:41,325 --> 00:09:45,363 their income on housing, Today it's closer to a third, and that's the average. 170 00:09:45,446 --> 00:09:49,417 In the cities where the jobs actually are, it's considerably worse than that. 171 00:09:49,500 --> 00:09:54,812 In Sydney, the income you need just to rent a typical apartment without being 172 00:09:54,895 --> 00:09:59,927 in financial stress has jumped from $88,000 in 2019 to $130,000 in 2025. 173 00:10:00,010 --> 00:10:04,307 young worker in New South Wales earns around 54,000 Australian dollars. 174 00:10:04,390 --> 00:10:07,889 In the US, 3 in 5 Gen Z renters are now classified as rent burdened, 175 00:10:07,973 --> 00:10:12,104 spending more than 30% of their income on housing before accounting for anything 176 00:10:12,187 --> 00:10:15,792 else. In cities like Los Angeles and San Diego, it's closer to 3 in 4. 177 00:10:15,875 --> 00:10:19,954 The result is that young people put 2 and 2 together and decide the move simply 178 00:10:20,038 --> 00:10:24,169 isn't worth it. So they stay in the town they grew up in where the opportunities 179 00:10:24,252 --> 00:10:28,437 are thinner and the neat risk is higher. Or they move back in with their parents, 180 00:10:28,520 --> 00:10:32,388 which is now the living situation of roughly 1 in 4 young adults in the US, 181 00:10:32,471 --> 00:10:34,187 up from 1 in 9 just 50 years ago. 182 00:10:34,270 --> 00:10:36,490 And while that arrangement can make financial sense, 183 00:10:36,573 --> 00:10:40,247 it often comes with a growing feeling that adulthood has been indefinitely delayed. 184 00:10:40,330 --> 00:10:44,096 None of this, it turns out, is particularly good for your mental health. 185 00:10:44,180 --> 00:10:48,213 The share of young people in the UK reporting common mental health conditions 186 00:10:48,297 --> 00:10:51,475 has risen from 19% in 2014 to nearly 26% today. In Australia, 187 00:10:51,558 --> 00:10:55,646 the prevalence of depression among young adults more than doubled between 2007 188 00:10:55,729 --> 00:10:58,533 and 2021. And in the US, for the first time on record, 189 00:10:58,616 --> 00:11:02,810 young people aged 18 to 24 are now more likely to report poor mental health than 190 00:11:02,894 --> 00:11:06,690 people twice their age. Now, the obvious question is, which came first? 191 00:11:10,330 --> 00:11:14,241 health crisis already developing on its own and simply made navigating those 192 00:11:14,324 --> 00:11:17,110 pressures harder. Well, it's genuinely a bit of both. 193 00:11:17,290 --> 00:11:19,810 And that's what makes this so difficult to fix. 194 00:11:20,170 --> 00:11:22,438 The structural pressure argument is intuitive. 195 00:11:22,521 --> 00:11:24,943 A generation dealing with an unstable job market, 196 00:11:25,026 --> 00:11:29,032 serious debt and housing they can't afford is a generation under chronic stress. 197 00:11:29,115 --> 00:11:31,639 And chronic stress is detrimental to mental health. 198 00:11:31,722 --> 00:11:33,939 The pandemic made things significantly worse, 199 00:11:34,022 --> 00:11:36,648 but young people were already struggling long before. 200 00:11:36,732 --> 00:11:40,226 The numbers started moving in the wrong direction as far back as 2011, 201 00:11:40,310 --> 00:11:44,417 years before the post-pandemic jobs crunch and the current cost of living crisis. 202 00:11:44,500 --> 00:11:48,901 In the UK, depression among young people aged 15 to 24 had already nearly doubled 203 00:11:48,985 --> 00:11:53,330 between 2003 and 2019. And struggling with your mental health at 15 doesn't make 204 00:11:53,414 --> 00:11:57,347 showing up to school any easier, which means your qualifications suffer. 205 00:11:57,430 --> 00:12:00,301 Worse qualifications mean worse options in the labour market, 206 00:12:00,384 --> 00:12:03,642 which makes mental health worse. Each step makes the next one harder, 207 00:12:03,726 --> 00:12:05,821 and the further someone gets down that chain, 208 00:12:05,905 --> 00:12:09,453 the harder it is to pull them back. Now for the ones who do make it through 209 00:12:09,537 --> 00:12:12,843 and actually land a job, well, the conditions on the other side aren't 210 00:12:12,927 --> 00:12:17,267 exactly a relief. One job, it turns out, increasingly isn't enough. 211 00:12:17,350 --> 00:12:21,890 There are now a record 1.35 million adults in the UK working at least two jobs, 212 00:12:21,973 --> 00:12:24,467 and it's Gen Z driving most of that growth. 213 00:12:24,550 --> 00:12:28,396 and yet more than two thirds of them still rely on parents or family for essentials 214 00:12:28,480 --> 00:12:31,332 like rent, groceries or bills. For those working a single job, 215 00:12:31,415 --> 00:12:33,604 the hours don't stop at the hours you agreed to. 216 00:12:33,687 --> 00:12:36,918 Over a third of workers say their employer expects them to work beyond 217 00:12:37,001 --> 00:12:40,422 their contracted hours, and nearly a quarter of Gen Z's answer work emails 218 00:12:40,505 --> 00:12:42,737 outside normal hours at least five days a week. 219 00:12:42,820 --> 00:12:45,458 The gig economy promised flexibility, which sounds good, 220 00:12:45,541 --> 00:12:49,345 but that flexibility mostly just means the risk sits with the worker rather than 221 00:12:49,428 --> 00:12:52,941 the employer. You're available when they need you, and the rest is your problem. 222 00:12:53,024 --> 00:12:55,987 Half of Gen Z workers report feeling burned out, and the friendships, 223 00:12:56,071 --> 00:12:59,475 the local communities, the places to switch off that previous generations could 224 00:12:59,559 --> 00:13:01,992 fall back on, those have been thinning out for years too. 225 00:13:02,076 --> 00:13:05,392 So some young people who do find work eventually decide it simply isn't worth 226 00:13:05,475 --> 00:13:08,836 it. And when they step back, there's less pulling them back in than there used 227 00:13:08,919 --> 00:13:12,236 to be. Moving back home used to come with a kind of unspoken social pressure. 228 00:13:12,319 --> 00:13:15,636 You were expected to get on with it, get out, become financially independent. 229 00:13:15,719 --> 00:13:18,373 But that pressure has largely gone now, and on the other side, 230 00:13:18,456 --> 00:13:20,027 you're not going to be able to do it. 231 00:13:20,110 --> 00:13:23,225 Honestly, given everything we've just described, that's probably fine. 232 00:13:23,308 --> 00:13:27,017 But it does mean that one of the informal mechanisms that kept people in the labour 233 00:13:27,100 --> 00:13:30,197 market, even when conditions were rough, has largely disappeared. 234 00:13:30,280 --> 00:13:33,320 Now all of this has a price tag and it's not a small one. 235 00:13:33,460 --> 00:13:37,602 Eurofound puts the cost of NEATS to European economies at 142 billion euros 236 00:13:37,686 --> 00:13:39,969 a year, distributed across foregone taxes, 237 00:13:40,052 --> 00:13:43,937 lost productivity and benefits paid out to people who aren't working. 238 00:13:44,020 --> 00:13:48,062 Now, if you want to see what happens when a country ignores all of this long enough, 239 00:13:48,145 --> 00:13:50,057 Japan is probably the clearest example. 240 00:13:50,140 --> 00:13:53,190 Japan's economy has had a difficult few decades, to put it mildly. 241 00:13:53,273 --> 00:13:56,940 The asset price bubble burst in the early 1990s and stable jobs dried up almost 242 00:13:57,024 --> 00:14:00,785 overnight. Japanese employers had always hired fresh graduates in a single annual 243 00:14:00,869 --> 00:14:04,441 cohort and now graduates who expected to walk into permanent employment found 244 00:14:04,524 --> 00:14:07,367 themselves cycling through low-paying part-time work instead. 245 00:14:07,450 --> 00:14:11,293 The economy narrowed, the entry points closed and they never really reopened. 246 00:14:11,376 --> 00:14:15,423 One in four Japanese people in their 20s will be NEAT at least once over any four 247 00:14:15,506 --> 00:14:19,196 year period. More than half of them experience NEAT status multiple times. 248 00:14:19,279 --> 00:14:22,510 And even in a society with enormous stigma around falling behind, 249 00:14:22,593 --> 00:14:25,161 some young people gave up on getting back into work. 250 00:14:25,245 --> 00:14:29,291 And then they gave up on going outside. It got bad enough that they had to invent 251 00:14:29,375 --> 00:14:32,758 a word for it, hikikomori, which refers to people, mostly young men, 252 00:14:32,842 --> 00:14:35,850 who don't go to work or school and barely leave their room. 253 00:14:37,450 --> 00:14:42,168 And as surprising as that sounds, this is the reality for 1.5 million people 254 00:14:42,252 --> 00:14:45,790 in Japan right now. That's 2% of everyone aged 15 to 39. 255 00:14:45,880 --> 00:14:49,314 The average time people spend like this is around 10 years. 10 years. 256 00:14:49,397 --> 00:14:52,474 That's not a bad patch or a rough few months. That's a decade, 257 00:14:52,557 --> 00:14:56,602 largely alone. Japan didn't set out to build a society where a million and a half 258 00:14:56,685 --> 00:15:00,578 people disappeared into their bedrooms. It just built an intensely competitive 259 00:15:00,661 --> 00:15:03,483 education system, an economy with narrowing entry points, 260 00:15:03,566 --> 00:15:07,255 and a welfare system that relied heavily on families to absorb the strain. 261 00:15:07,338 --> 00:15:11,332 Once families reached their limit, there was little left to catch people falling 262 00:15:11,415 --> 00:15:12,249 out of society. 263 00:15:15,880 --> 00:15:19,095 in South Korea, the US, Singapore and much of the developed world. 264 00:15:19,178 --> 00:15:23,142 But Japan is where the problem has been running the longest and gone the deepest. 265 00:15:23,226 --> 00:15:27,190 There's even a name for what happens when it's left unaddressed for a generation, 266 00:15:27,273 --> 00:15:31,287 the 80/50 problem. Parents in their 80s still supporting children in their 50s who 267 00:15:31,371 --> 00:15:32,597 never re-entered society. 268 00:15:32,680 --> 00:15:35,380 That's two people who should be contributing to an economy, 269 00:15:35,464 --> 00:15:37,504 one through spending and one through working, 270 00:15:37,587 --> 00:15:40,759 both effectively removed from it. And when those elderly parents die, 271 00:15:40,843 --> 00:15:44,204 many of their children have no income, no work history and nowhere to go. 272 00:15:44,287 --> 00:15:47,931 So a million and a half people in their bedrooms and parents in their 80s still 273 00:15:48,015 --> 00:15:51,517 paying the bills is what it looks like when this problem is left unaddressed 274 00:15:51,600 --> 00:15:52,727 for an entire generation. 275 00:15:52,810 --> 00:15:56,536 And look, it would be easy to stop there and leave you feeling terrible about 276 00:15:56,619 --> 00:15:59,010 the future. But that's not quite the full picture, 277 00:15:59,093 --> 00:16:02,243 because some countries have actually figured parts of this out. 278 00:16:02,470 --> 00:16:07,866 Across Europe NEAT rates vary enormously, from above 22% in Italy and 19% in Greece 279 00:16:07,949 --> 00:16:10,547 to slightly above 5% in the Netherlands. 280 00:16:10,630 --> 00:16:13,775 And before anyone says it's a cultural or attitude thing, it isn't. 281 00:16:13,858 --> 00:16:16,762 When you look at what the Loenik countries are actually doing, 282 00:16:16,845 --> 00:16:20,712 the same answers keep appearing. It all starts with treating non-university routes 283 00:16:20,796 --> 00:16:24,278 as a genuine first choice, not a backup plan for people who didn't make it 284 00:16:24,361 --> 00:16:27,797 to university, which is how most wealthy countries currently treat them. 285 00:16:27,880 --> 00:16:31,949 The countries that do this well run what's called a dual education system, 286 00:16:32,032 --> 00:16:36,718 where vocational students split their time between the classroom and real workplaces, 287 00:16:36,801 --> 00:16:40,197 so they graduate with work experience, employer relationships, 288 00:16:40,280 --> 00:16:43,619 and a foot already. This family is on the brink of civil war. 289 00:16:43,703 --> 00:16:48,052 The new season of Mobland is now streaming on Paramount+. We are the Hardigans! 290 00:16:48,135 --> 00:16:52,036 Don't know the net? Then Google us! From the underworld of Guy Ritchie. 291 00:16:52,119 --> 00:16:54,700 Do you want to step up the ladder? Here we go. 292 00:16:57,880 --> 00:17:01,020 Do I have to do everything myself? 293 00:17:08,350 --> 00:17:12,038 In the Netherlands, 90% of recent vocational graduates were in employment 294 00:17:12,121 --> 00:17:16,325 in 2024, well above the EU average. Which means more young people with a clear path 295 00:17:16,408 --> 00:17:20,509 forward, which means fewer NEETs, which means significantly less strain on public 296 00:17:20,593 --> 00:17:24,435 finances. The other thing the low NEET countries get right is catching young 297 00:17:24,518 --> 00:17:28,516 people before they disengage entirely. Because pulling someone back after years 298 00:17:28,599 --> 00:17:32,080 out is dramatically harder and more expensive than not losing them in 299 00:17:32,164 --> 00:17:32,927 the first place. 300 00:17:33,010 --> 00:17:36,854 To do that, they make childcare affordable enough that work actually pays. 301 00:17:36,937 --> 00:17:39,825 Sweden does this better than almost anyone. As a result, 302 00:17:39,909 --> 00:17:44,071 nearly 80% of women are in the workforce and its NEAT rate of 6.7% is well below 303 00:17:44,154 --> 00:17:44,927 the EU average. 304 00:17:45,010 --> 00:17:49,374 Sweden also has housing policies that make it possible for young people to actually 305 00:17:49,458 --> 00:17:53,715 live near where the jobs are. And then there is what Denmark calls "flexicurity". 306 00:17:53,798 --> 00:17:57,466 Flexible hiring combined with strong safety nets and active retraining 307 00:17:57,550 --> 00:18:01,110 programs, so you can lose a job without it becoming a life sentence. 308 00:18:01,194 --> 00:18:05,129 The system actively helps you into the next job rather than just paying you 309 00:18:05,213 --> 00:18:07,380 to stay home. Denmark's NEAT rate is 6.2%, 310 00:18:07,463 --> 00:18:11,774 well below the EU's strategic target to keep the NEAT rate at 9% or below by 2030. 311 00:18:11,857 --> 00:18:13,090 That's not an accident. 312 00:18:15,010 --> 00:18:18,145 theory and the numbers make a pretty compelling case for trying. 313 00:18:18,228 --> 00:18:21,766 In the UK alone, getting every region's NEAT rate down to match the best 314 00:18:21,849 --> 00:18:24,934 performing one would add £26 billion to the economy every year. 315 00:18:25,017 --> 00:18:28,705 And that's just what you gain. It doesn't include the money you keep losing 316 00:18:28,788 --> 00:18:32,175 in welfare payments, health costs and decades of foregone tax revenue 317 00:18:32,258 --> 00:18:36,047 from people who stayed out long enough that re-entry stopped being realistic. 318 00:18:36,130 --> 00:18:39,587 That bill is considerably harder to calculate and considerably larger. 319 00:18:39,670 --> 00:18:43,998 So why has no one fixed it? Partly because the lazy generation story is a lot easier 320 00:18:44,082 --> 00:18:47,885 to tell than the structural one, and it's certainly a lot more politically 321 00:18:47,968 --> 00:18:51,877 convenient. If you believe that framing the policy response is motivational, 322 00:18:51,960 --> 00:18:54,398 lecture the unemployed, sanction their benefits, 323 00:18:54,481 --> 00:18:58,547 tell them to lower their expectations. But if you accept what the data actually 324 00:18:58,630 --> 00:19:02,118 shows, the response looks completely different. Structural problems, 325 00:19:02,202 --> 00:19:04,670 unlike lazy generations, can actually be fixed. 326 00:19:09,670 --> 00:19:12,977 political will to do it. And fixing it matters beyond just the young people 327 00:19:13,061 --> 00:19:16,458 directly caught up in it. None of us can look forward to a stable future when 328 00:19:16,541 --> 00:19:19,397 millions of young people around the world don't have decent work, 329 00:19:19,480 --> 00:19:22,335 can't build a life, and are checking out of the economy entirely. 330 00:19:22,418 --> 00:19:25,635 These are the people who are supposed to be driving growth, paying taxes, 331 00:19:25,718 --> 00:19:27,941 and yes, supporting the rest of us when we get old. 332 00:19:28,024 --> 00:19:30,427 Now for the first time since the industrial revolution, 333 00:19:30,510 --> 00:19:34,044 younger generations in wealthy countries are struggling to exceed their parents' 334 00:19:34,127 --> 00:19:35,867 wealth despite overall economic growth. 335 00:19:35,950 --> 00:19:40,101 and this is changing our economies. We've made an entire video unpacking exactly why 336 00:19:40,185 --> 00:19:43,310 that is. You should be able to click to it on your screen now. 337 00:19:43,660 --> 00:19:44,960 Thanks for watching, mate. 338 00:19:45,100 --> 00:19:45,933 Bye.