McKinsey: AI to Create Net Job Growth, But 11 Million Americans Need New Careers

Artificial intelligence and automation are projected to eliminate demand for approximately 36 million jobs in the United States by 2035, according to a new report from the McKinsey Global Institute. However, growth in other sectors is expected to create around 41 million new positions, resulting in a net increase of approximately 5 million jobs. The primary challenge identified by the report's authors is not a scarcity of jobs, but rather the mobility of the workforce to transition into these new roles. In its base case scenario, the report estimates that about 11 million American workers, representing roughly 7% of the total workforce, will need to change their occupations entirely. This figure falls within a projected range of 6 million to 16 million workers requiring career shifts. This forecast is consistent with the firm's previous 2023 prediction that 12 million Americans would need to switch careers by 2030. A significant portion of these transitions will involve moving into entirely different fields, such as shifting from retail to healthcare. McKinsey estimates that approximately 770,000 individuals per year will need to make such substantial occupational changes, which is about 3.6 times the historical average rate of career switching. The report acknowledges that around 788,000 workers annually made similar moves between 2019 and 2022, a period that included the COVID-19 pandemic, without experiencing lasting negative consequences. This rate of transition represents a considerable increase for workers, who have generally shown less mobility between employers since the late 1990s and early 2000s, with the exception of a brief surge during the pandemic. The jobs most likely to be displaced by AI and automation are concentrated in office and administrative support, retail, and transportation sectors, many of which are lower-paid occupations. The report highlights that lower-wage workers are 7.6 times more likely than higher-wage workers to require a new occupation. Conversely, job growth is anticipated in sectors such as healthcare, construction, and management. Urbanist Richard Florida, author of "The Rise of the Creative Class," noted that such large-scale occupational shifts are not unprecedented, citing historical examples like the decline of agricultural and manufacturing employment as a percentage of the workforce. Florida, who was not involved in the McKinsey study, anticipates that displaced service workers will find opportunities in a broad category he describes as 'wellness.' The McKinsey Global Institute's analysis underscores the critical need for reskilling and upskilling initiatives to facilitate this large-scale workforce adaptation.