Shadow business secretary John Denham has accused ministers of disproportionately targeting young people to bear the brunt of the government's "reckless" cuts.
Opening an opposition day debate on "opportunities for the next generation" on 13 September 2011, Mr Denham argued: "Every family is suffering, but young people are paying a particularly heavy price.
"But young people in Britain today are not some accidental victims of the cuts, some collateral damage of Treasury policy.
"When the government drew up plans to cut spending too far and too fast, it decided to target young people - and it did it recklessly, without thought and without heed to the evidence."
Mr Denham cited the trebling of university tuition fees in England to a maximum of £9,000 a year and the scrapping of the educational maintenance allowance, designed to keep youngsters in school and college for longer, as evidence to support his argument.
He repeated shadow ministers' calls for a temporary VAT cut, a second levy on bankers' bonuses and forcing firms working on public sector contracts to offer apprenticeships.
Labour's motion sets out the accusation that "young people face a more uncertain future which may not offer the increased opportunities and prosperity enjoyed by their parents" and demands the government "takes action to secure the business growth to create opportunities for young people".
Universities minister David Willetts, the author of a book examining gaps in generational achievements and hopes called The Pinch: How The Baby Boomers Took Their Children's Future, agreed that MPs were obliged "to ensure the younger generation has a better opportunity in life".
But he said eliminating the record budget deficit Labour left the coalition was the best long-term way of sparking a job revival for youngsters.
He added: "The most important single way in which we can help the younger generation is by reducing the burden of government debt they will have to pay, and that is at the heart of our programme."
At the end of the debate, MPs rejected Labour's motion by 297 votes to 234, a government majority of 63.