School leavers will open their A-level results next week and, for many, national service may be on their minds. The armed forces look like being the unexpected winners from the mess of youth unemployment this year. As things stand, 38 per cent of Britain’s 2.4m jobless are under 26. But many more young people are underemployed in part-time work or roles for which they are overqualified. Next year’s graduates should be worried, too. Those who missed out during this year’s recruitment cycle will be back to compete for the same jobs.

The recession has exacerbated a real problem for recent graduates. According to the Institute for Employment Studies, in the four years to 2008 the number of new graduates rose 11 per cent, outpacing the number of graduate jobs, which rose only 7 per cent. As this year’s graduates hit the jobs market, the gap will widen further because the UK’s top 100 companies have been planning further hiring cuts. In fact, since 2007 graduate hiring has been cut by about 23 per cent, estimates High Fliers, a research firm.

Facing today’s tough jobs market, school and college leavers have three options: spend time fighting for their chosen role; defer entering the workforce; or settle for second best. Financial constraints are forcing many to choose the latter.

And the effects may reverberate through the economy for years to come. One investment bank recently complained about the difficulty in attracting executives with about seven years experience as a result of depressed graduate hiring in 2001 and 2002.

History may or may not repeat itself for the banks, but in the meantime Bob Ainsworth, the defence secretary, will not complain. Right now, the military is picking up as many fresh faces as it wants.

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