Global Youth Unemployment Rises in 2025 Amid Sluggish Job Creation and AI Concerns

On August 11, the United Nations’ International Labour Organization (ILO) released its *Global Employment Trends for Youth 2026* report, showing that the global youth unemployment rate increased from 12.3 % in 2024 to 12.4 % in 2025. This rise represents approximately 67 million people aged 15-24 without work. The share of young people classified as not in employment, education or training (NEET) also edged higher to 20 %, affecting more than 257 million individuals worldwide. The ILO expects the unemployment rate to plateau at 12.3 % in 2026 and 2027 if current trends continue.

Reuters

The report identifies the sharpest increases in high-income economies, with notable climbs in North America (from 8.3 % in 2023 to 9.8 % in 2025) and across Northern, Southern and Western Europe where rates sit around 15 %. The Arab States record the highest youth unemployment at 26.2 %, followed by Northern Africa at 22.6 %. In contrast, some sub-regions such as central and western Asia and eastern Europe saw declining unemployment but simultaneous rises in NEET rates, indicating a shift away from formal employment.

Reuters

ILO officials highlighted a contraction in middle-skilled occupations—clerical, administrative, sales and manufacturing roles—that traditionally serve as entry points for recent graduates. The agency estimates that 6.1 % of jobs held by people aged 15-29 are in occupations most exposed to AI-related changes. If just 10 % of those jobs were eliminated, roughly 5.6 million young workers, primarily in high-income countries, could face unemployment or exit the labour force. While high-skill sectors such as science, engineering, healthcare and information technology continue to grow, the report warns that the coincidence of AI adoption and declining middle-skill jobs creates “great uncertainty and fragility” for young workers.

Reuters

Sara Elder, head of the ILO’s employment analysis and economic policy unit, warned that simultaneous rises in unemployment and NEET rates “raise the red flag.” Sukti Dasgupta, director of the ILO’s employment, skills and sustainable enterprises department, cautioned that it is too early to prove a causal link between AI and higher youth unemployment, but noted the “real” coincidence of the two trends. ILO chief Gilbert Houngbo emphasized that a generation unable to secure decent work undermines talent, productivity and social cohesion, framing the creation of quality jobs as a strategic investment for countries.

The Straits Times

The ILO calls for expanded research on AI’s labour-market impact and for policies that bolster middle-skill employment pathways. Without such interventions, the agency projects that youth unemployment could remain elevated, threatening both individual livelihoods and broader economic stability.

Reuters