18 Dec How US Job Market Would Look Like in the Next Decade
How would Silicon Valley look like in the next decade? A new extensive report from the McKinsey Global Institute, “The future of work in America: People and places, today and tomorrow,” sees how the labor market will be propelled by the next wave of automation technologies that would further accelerate the pace of change. Jobs, it said, could be phased out even as new ones are created. The day-to-day nature of work could change for nearly everyone as intelligent machines become fixtures in the American workplace.
There’s hope in this analysis of more than 3,000 US counties and 315 cities, though. Its previous work ran multiple scenarios regarding the pace and extent of adoption. In the midpoint case, its modeling shows some jobs being phased out but sufficient numbers being added at the same time to produce net positive job growth for the United States as a whole through 2030. But the national results contain a wide spectrum of outcomes.
The scenario suggests strong job growth in healthcare, STEM occupations, creative fields, and business services. Growth and displacement may occur even within the same occupational category. In customer service and retail sales, for example, counter attendants and rental clerks may decline, but more workers could be added to help customers in stores or to staff distribution centers. In Forecast, New York City will see boom in warehouses, brought about by rise in online orders that need speedy delivery.
Employment in the highest-wage jobs is expected to grow by 3.8 percentage points.3 But the growth of high-wage opportunities can be realized only if workers can obtain the necessary education and skills. Forging career pathways to help people move up and finding sources of future middle-wage jobs will be essential to sustaining the US middle class.
Cities and counties across the United States are, of course, entering this period of technological and labor market change from different starting points. There will be existing disparities between high-growth cities and struggling rural areas, and between high-wage workers and everyone else, which may become the norm everywhere, as it is best captured in South Korea’s dark social comedy thriller, Parasite.
Cities would need to equip people with the skills they need to succeed, revitalize distressed areas, and support workers in transition. While previous MGI research has found that less than 5 percent of occupations can be automated in their entirety, but within 60 percent of jobs, at least 30 percent of activities could be automated by adapting currently demonstrated technologies.
Yes, the coming wave of automation will affect some of the largest occupational categories in the US economy, such as office support, food service, production work, and customer service and retail sales. Nearly 40 percent of US jobs are currently in occupational categories that could shrink between now and 2030. At the high end of the displacement spectrum are 512 counties, home to 20.3 million people, where more than 25 percent of workers could be displaced.
These losses will not necessarily manifest as sudden mass unemployment. Many occupations are likely to shrink through attrition and reduced hiring. This has already been occurring in office support roles, for instance.
Even as some occupations decline, the US economy should continue to grow and create new jobs in the years to 2030. Workforce transitions will play out differently in local communities across the United States. Findings suggest that net job growth through 2030 may be concentrated in relatively few urban areas, while wide swaths of the country see little employment growth or even lose jobs.
Understanding who holds the occupations with the highest automation potential today is an important first step for designing targeted interventions and training programs. Individuals with a high school degree or less are four times more likely to be in a highly automatable role than individuals with a bachelor’s degree or higher—and as much as 14 times more vulnerable than someone with a graduate degree.
Even as some jobs decline, the US economy will continue to create others—and technologies themselves will give rise to new occupations. All workers will need to adapt as machines take over routine and some physical tasks and as demand grows for work involving socioemotional, creative, technological, and higher cognitive skills.