Foreign workers are being given jobs above young Britons because companies think that they are 'lazy and uneducated', an employers' group said today.
The Chartered Institute of Personnel and Development, has warned 'young people in Britain just don't want to work.'
Their report also says failing UK schools and poor education standards are 'forcing UK firms to choose foreign workers.'
And as a result less than one in four bosses want to take on a young British worker, they claim.
It came as youth unemployment figures due out today are expected to show that one million 16 to 25-year-olds are currently out of work in the UK.
Prospects for young people have deteriorated sharply after the recession started in 2008 and have been at 'crisis levels' ever since, the TUC warned today.
Young people looking for a job or planning to continue in education are facing the toughest outlook since 1994, the union added.
The TUC has voiced concern about rising levels of long term unemployment, accusing the Government of cutting financial support for students.
In a report published ahead of new unemployment figures today, it said the proportion of young people in full-time education has almost doubled from 24 per cent in 1992 to 41 per cent this year.
More than one in five people aged between 16 and 24 were out of work, significantly higher than in 1992, when the rate was 16 per cent, said the report.
Almost half a million young people have been out of work for at least six months, leaving them under-achieving before their careers have even started, it says.
General secretary Brendan Barber said: 'Students looking to start their careers or continue in their education next month are facing the toughest climate for nearly 20 years.
'It's particularly worrying that long-term joblessness for young people is still rising, even as overall unemployment falls. If this continues we could lose a generation of talented and highly qualified youngsters to blighted careers, debt and under-achievement.
'Ministers should be doing everything they can to help young people but so far all they've done is cut vital financial support for college students and price people out of university. Jobs support has been scrapped, scaled back and then reinstated on the cheap. This is no sensible way to help young people into work or education.
'The Government's economic strategy is holding young people back. It's time for a new plan that invests in their futures, rather than stunting careers before they've barely begun.'
Unemployment fell by 65,000 between March and May to 2.58 million, although the number of people claiming jobseeker's allowance in June increased by 6,100 to 1.6 million.
A survey by the National Union of Students showed that three out of four youngsters intending to go to university this autumn are worried about getting a job after they finish their course.
The poll of 800 students also revealed that around two thirds had concerns about finances while they studied.
NUS vice president Rachel Wenstone said: 'For many people, a university degree has traditionally given them the opportunity to access the employment of their choice. Now those who make it to university are no longer guaranteed employment in the way that previous generations were.
'Unemployment amongst graduates is still lower than for those without a degree but those getting their A-level results this year face harder decisions than many about their futures.'
Paul Brown, Director, youth charity The Prince's Trust, added: 'There is an alarming number of unemployed young people who lack the skills and confidence they need to find work, and it is these young people that need urgent support.'
But the Government maintains that they are getting young people into work.
A spokesman for Work and Pensions Secretary Iain Duncan Smith said: 'This is nothing but scaremongering from the unions at a very sensitive time. The last Labour government did all they could to manipulate youth unemployment figures and hide the real picture.
'Youth unemployment fell last month and there are fewer young people on Jobseekers Allowance or any other temporary support now than there was in May 2010. This is still a big challenge and we don't underestimate it for one moment.
'We are fully committed to helping young people get the skills and experience they need to get a job. Over the next three years the Youth Contract will offer nearly 500,000 opportunities for young people through work experience, apprenticeships and wage subsidies to help them find work.'.