Millions of Americans may need to find an entirely new career in the next decade, according to a study released Tuesday.
According to a report by consulting firm McKinsey & Co, an estimated 11 million workers, or about 6.5% of the current workforce, may need to move into entirely different professions by 2035 due to the adoption of automation and artificial intelligence.
The McKinsey Global Institute report predicts that AI could create more jobs than it kills over the next nine years; however, technological innovation “could require the largest and most sustained workforce transformation in U.S. history.”
“While social media is full of dire predictions about the impact of AI on work, the United States will likely have more jobs available in 2035 than today, but with fewer workers due to an aging population,” according to the report.
The baseline estimate from McKinsey researchers is that automation could reduce labor demand by 36 million jobs by 2035, while growth in AI-related fields and the broader economy could generate demand for 40 million jobs during that time.
About 25 million of the 36 million affected workers are expected to be able to keep their current jobs, as growth in their industry is expected to offset the impact of automation, McKinsey noted.
“The remaining 11 million may have to change careers entirely,” the researchers write in the report. “The challenge of the next decade is mobility, not scarcity. »
Despite the impacts of AI, the labor market is already experiencing a historic transformation with the retirement of baby boomers, the slowdown in net immigration and exogenous shocks impacting the economy.
For two years running, the job market has been in a state of “low hiring and low fire,” a sluggish turnover environment with opportunities for the few but not the many.
The job market remains sluggish
This lack of churn was highlighted in a separate report released Tuesday by the Bureau of Labor Statistics.
Job openings, a closely watched measure of worker demand, fell to a five-month low in late August; the rate of voluntary departures (an indicator of worker confidence) remained near a six-year low; and layoffs decreased for the second consecutive month.
Last year, job growth was one of the weakest on record. Employment gains have accelerated this year (to 80,000 per month compared to less than 10,000 last year); however, they remain below historical averages, according to BLS data.
Slow hiring means workers feel stuck, said Daniel Zhao, chief economist at Glassdoor, an online job and career search community site.
“And that means frustration and anxiety continue to grow without a healthy outlet,” he told CNN in an interview.
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In September, Glassdoor’s Employee Confidence Index fell to a new record low – its third lowest this year for the 10-year-old index – as workers grew increasingly worried about their job security, economic uncertainty and AI.
Overall consumer confidence remains at an all-time low. Furthermore, on Tuesday, the latest consumer confidence index fell to its lowest level in 12 years.
The Conference Board index, which measures Americans’ assessment of the current and future economic situation, fell 6.7 points to 81.9 as rising gas prices and uncertainty over the war in Iran and global trade relations weighed on their outlook.
The Conference Board survey showed a much more dramatic decline in consumer confidence compared to a similar survey by the University of Michigan. That survey showed that consumer confidence fell 7 percentage points between August and September, standing at its second lowest level on record.
The University of Michigan Confidence Index focuses more on household finances and the impact of inflation, while labor market conditions weigh more heavily on the Consumer Confidence Index.
“Consumers were more pessimistic about labor market conditions in September as weak hiring weighed on perceptions of job availability,” Grace Zwemmer, U.S. economist at Oxford Economics, wrote in a note Tuesday. “While this is a challenging environment for the current unemployed, the labor market is roughly balanced, with a slow pace of labor force growth aligning with smaller payroll gains. »
The official September jobs report is expected to be released Friday morning, and economists expect job growth to slow compared to August. The consensus expects the economy to have added 95,000 jobs this month, up from 162,000 in August, and for the unemployment rate to hold steady at 4.1%, according to FactSet.
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