AI may force 11m workers into new jobs, McKinsey says

An AI jobs apocalypse may not be the biggest threat to US workers in the next decade. The larger challenge could be helping millions of people move into new jobs, according to a study by consulting firm McKinsey & Co.

Roughly 11 million American workers, or about 7% of the current workforce, may need to change jobs by 2035 because of artificial intelligence-related displacement, according to the report released Tuesday.

That means the number of US workers who change occupations each year – historically around 215 000 – may triple over the next decade. The transition will be tough for many, with six of seven workers facing substantial retraining and loss of income, according to McKinsey’s analysis.

Read: AI adoption is driving hiring, but mostly for senior roles

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.”

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The McKinsey study found that full-time employees most likely to have to change jobs are concentrated in three groups, office and administrative support, retail and sales, and transportation and logistics.

That includes jobs such as customer-service representatives, cashiers and warehouse workers. Many are low-income workers, whom the report projects will be almost eight times as likely as higher earners to have to change jobs.

Like many projections of its kind, the analysis hinges on factors that are difficult to predict, including how quickly companies adopt AI and how that affects demand for workers across industries.

The research also accounts for broader trends shaping labour demand, including the country’s ageing population. Given that uncertainty, the authors estimate that anywhere from 6 million to 16 million workers may need to switch occupations.

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The report outlines several ways federal, state and local governments could help workers make those transitions, including providing more detailed and timely labour-market data and funding retraining programs.

Earlier labour market transformations such as America’s move away from agriculture unfolded far more gradually. But there is precedent for this pace of change: The rate of projected job changes is similar to what US workers experienced during the Covid-19 pandemic, according to 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.”

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One factor the report didn’t consider, Catlin said, is whether demand for workers could fall faster in some occupations than it rises in others.  “We don’t know whether it’s going to be painless,” he said.

The report outlines several ways federal, state and local governments could help workers make those transitions, including providing more detailed and timely labour-market data and funding retraining programmes.

Read: Tech and finance sectors losing 28 000 jobs monthly show AI impact on labour

“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.”

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