McKinsey predicts 11 million additional employment from AI by 2035
An AI jobs apocalypse may not represent the most significant threat to US workers in the coming decade. The larger challenge may involve facilitating the transition of millions of individuals into new employment opportunities, as indicated by a study conducted by consulting firm McKinsey & Co. Approximately 11 million American workers, representing around 7% of the existing workforce, could be required to transition to new employment by 2035 due to displacement linked to artificial intelligence, as indicated in the report published on Tuesday. That indicates the annual figure of US workers transitioning between occupations – traditionally approximately 215,000 – could potentially increase threefold in the coming decade. The transition will be challenging for a significant number of individuals, with six out of seven workers encountering considerable retraining requirements and a decline in income, as indicated by McKinsey’s analysis. Workers aren’t “interchangeable units,” the report’s authors note. “Job opportunities can be abundant and yet leave millions of workers without work if those positions require different skills, credentials, locations or pay structures than current jobs.”
The McKinsey study identified that full-time employees who are most likely to change jobs are predominantly found within three sectors: office and administrative support, retail and sales, and transportation and logistics. That encompasses positions such as customer-service representatives, cashiers, and warehouse workers. Many are low-income workers, whom the report projects will be nearly eight times more likely than higher earners to have to change jobs. As with numerous forecasts of this nature, the analysis relies on variables that are challenging to anticipate, such as the pace at which firms embrace AI and the subsequent impact on labour demand across various sectors. The research also considers broader trends influencing labour demand, including the ageing population of the country. In light of the prevailing uncertainty, the authors project that the number of workers who may need to transition to different occupations could range from 6 million to 16 million.
The report delineates various strategies that federal, state, and local governments could implement to assist workers in navigating these transitions. This includes the provision of more comprehensive and timely labor-market data, as well as the allocation of funds for retraining programs. Historically, labour market transformations, exemplified by America’s transition from agriculture, occurred at a much more gradual pace. However, there exists a historical basis for this rate of transformation: The rate of projected job changes mirrors the experiences of US workers during the Covid-19 pandemic, as noted by Tanguy Catlin, a senior partner at the McKinsey Global Institute and one of the report’s authors. “We did it during Covid for two years,” he said. “You would need to presume that we can sustain it for about 10 years.”
One factor the report didn’t consider, Catlin noted, is whether demand for workers could decline more rapidly in certain occupations than it increases in others. “We don’t know whether it’s going to be painless,” he stated. The report delineates various methods by which federal, state, and local governments might assist workers in navigating these transitions, including the provision of more comprehensive and timely labor-market data as well as the financing of retraining initiatives. “The education system has been developed over time really to focus mostly on youth,” Catlin said. “But what can be done to continue to upskill the existing workforce, people who need to change occupations? Those are the questions we wanted to tee up for public debate.”
