Young people not in education or employment face an even tougher battle to get jobs in the future, as the digital economy and automation of work increases, researchers say.
More than 80,000 people aged 15 to 24 are out of work and not in education or training.
The director of AUT's future of work programme, Gail Pacheco, said if people were out of the system when they were young it was very hard for them to catch up.
That was a particular risk in a future where people would have to keep their skills relevant and updated in line with new technologies.
"They're lacking experience, and we hear employers constantly say that when they're looking at hiring people they'd much rather hire someone with experience. So they're more likely to lose out on jobs."
As part of her research into how the so-called digital disruption will affect workers, Ms Pacheco investigated the economic cost of the group of young people known as NEET - not in education or employment.
"We just concentrated on just the pure economic cost in terms of lost productivity and burden on public finances - taxes and benefits and things like that.
"And it was about 20,000 [dollars] per person in just a one- to two- year time period."
The research did not include any health costs associated with people being out of work.
Demographer Professor Paul Spoonley from Massey University is also concerned with this group of people who have fallen out of the system and through the cracks.
"If they're not coming out education and going in to something then we're losing them. And they're going to be a problem long term," he said.
Minister for Tertiary Education, Skills and Employment Steven Joyce accepts this is an area that needs to be focused on by the Government.
He said there were a number of programmes already in place, such as Māori and Pasifika trades training initiatives involving families and churches in helping young people through the education system or a return to work.