In Hawke's Bay, Mrs Welsh said youth workers often needed a driver's licence to get to remote jobs, but many were not making the effort to get one.
Some workplaces started shifts at 6am, so youths with a restricted licence could not legally drive to the job.
The Boss Group office was located near an outlet selling legal highs with queues of people lining up for synthetic cannabis, she said.
"Unfortunately, we see them walking away in their high-vis jackets off to work and it's very scary thinking these people are in the work force.
"But even the youth who aren't in the workforce, they've got too much time on their hands and they tend to get sucked into that culture.
"It's a huge problem - they're not work ready."
An added problem was that employers did not want to take on inexperienced employees.
"They don't want to babysit these people, they want people to come work ready."
Napier city councillor Mark Hamilton said youth unemployment would be addressed in coming months by the council.
Taskforce chair Clutha mayor Bryan Cadogan warned that with the combination of a high mature employment rate, a contracting youth population and major skills shortage, a labour "crisis" was looming. APNZ
