By 2030, approximately 12 million Americans employed in sectors experiencing declining demand might have to consider changing their occupations.

According to a recent study by the McKinsey Global Institute, the future of US employment could be influenced by various factors such as the growth of AI, an aging population, and the increasing prevalence of e-commerce.

In recent years, a significant increase in job-switching known as the Great Resignation has been fueled by workers pursuing improved pay and work-life balance. However, looking ahead to 2030, McKinsey researchers predict that around 11.8 million workers will be compelled to change jobs out of necessity rather than choice. Among them, approximately nine million individuals may be required to transition into entirely new industries, according to the study’s findings.

According to Michael Chui, a partner at the McKinsey Global Institute and a co-author of the study, who has extensively researched the effects of new technologies on businesses, approximately 75% of the anticipated job decreases are concentrated in four specific categories: office support, customer service and sales, food services, and production work (such as manufacturing).

These changes are projected to have the greatest impact on lower-wage workers. The study revealed that individuals in lower-wage positions are potentially up to 14 times more likely to have to switch occupations by 2030. Conversely, the demand for higher-wage professions in sectors such as healthcare, technology, and transportation is expected to experience significant growth in the coming years, according to the same study.

Future Job Growth and Decline in the Coming Decade

Chui highlighted four primary factors that are propelling the anticipated changes in workforce demand.

The first factor driving the projected shifts in workforce demand is the automation of jobs, potentially accelerated by the emergence of generative AI technologies like ChatGPT. The study indicates that as much as 30% of the current work hours in the US could be subject to automation by 2030.

“It will alter the number of work hours required from humans, as machines take on certain tasks,” he explained.

The researchers anticipate that generative AI will augment the work of STEM, creative, business, and legal professionals rather than substantially replacing them. They assert that the most considerable negative impacts of automation are likely to affect professions in office support, customer service, sales, and food service.

The study projected that among the four most affected categories, the demand for clerks, retail salespersons, administrative assistants, and cashiers would each experience a decline of more than 600,000 jobs by 2030. This reduction is attributed, in part, to the fact that these jobs entail a significant portion of repetitive tasks, data collection, and basic data processing – tasks that automated systems can efficiently handle. The researchers also pointed out that the advancement of chatbots could influence the demand for customer service roles.

The second factor is the ongoing increase in online shopping.

“If the spending on e-commerce surpasses that of brick-and-mortar retail, there may be a reduced need for salespeople in physical stores. However, there will likely be a greater demand for delivery drivers and an increased workforce within warehouses,” explained Chui.

Partially fueled by the e-commerce surge, the researchers forecasted a 9% increase in job growth within the transportation services category by 2030.

Thirdly, the aging population in America plays a significant role, as people of various age groups tend to exhibit distinct spending patterns. Chui noted that this demographic shift might result in reduced demand for certain jobs and an increased demand for others, such as healthcare workers.

“This includes a wide range of professions, from nursing aids to surgeons and radiologists,” he explained.

Fourth, despite the recent increase in US manufacturing, Chui mentioned that productivity gains may result in the industry needing fewer workers than it did in the past.

“You’ll need fewer people, but with more skills,” he said.

AI’s Impact: Elevating Low-Paid Workers to Higher-Income Roles

Chui said that the extent to which these changes will benefit or harm the US workforce is a matter of discussion, hinging on the nation’s capacity to retrain workers in vulnerable positions.

He explained that the pessimistic perspective is that those most at risk from these changes are individuals with lower incomes in the economy. However, he also noted an optimistic outlook, where if we can successfully guide them through re-skilling and similar efforts, they may end up occupying higher-paying positions. In essence, facilitating these transitions in the labor market could lead to positive outcomes overall.

Chui expressed confidence that the US can successfully undergo this transformation, albeit necessitating substantial investments from companies, educational institutions, and governments. In addition to providing training to the workforce, he suggested that the US could also prosper from adopting a “skills-based labor market” approach. This means placing equal or greater emphasis on a worker’s specific skillset during the hiring process, rather than solely focusing on whether they hold a college degree.

He mentioned that in the past, a considerable majority of the US workforce was engaged in agriculture, which eventually shifted to a higher number of people working in factories and other sectors. Despite these changes, the country did not experience a 50% unemployment rate. Throughout history, the US has demonstrated its ability to adapt to such shifts. While facing new challenges, an optimistic American would believe that the nation is capable of overcoming them once again.

Conclusion

The US workforce faces significant changes by 2030, driven by AI, e-commerce, and an aging population. Around 12 million workers may need to change jobs. Lower-wage workers are at risk, but retraining offers hope. Optimism prevails, as history shows the US can adapt. Investment in reskilling and a skills-based labor market is essential for success. Embracing technology and demographic shifts can lead to a prosperous future.