AI will create more jobs than it kills, McKinsey says, but 11 million Americans may need new careers

Jobs will exist, the authors say, but the problem is attracting workers.

“The challenge of the next decade is mobility, not scarcity,” they write.

In its base case scenario, about 11 million workers, or about 7% of the labor force, are expected to leave their jobs completely, in a range of 6 million to 16 million. This figure is close to the company’s 2023 forecast, which predicted 12 million career changes by 2030.

Most of these workers are expected to go into an entirely different field, such as retail or health care. McKinsey estimates that about 770,000 people per year are expected to make this type of change, about 3.6 times the historical average. About 788,000 workers per year took similar steps between 2019 and 2022, during the pandemic, without lasting damage, the report notes.

That would represent a big change for workers, who already change employers less frequently than in the late 1990s and early 2000s, aside from a brief surge during the pandemic, the report notes.

Certification work

The shrinking jobs are concentrated in office and administrative support, retail and transportation, with most being lower-paying jobs. Low-wage workers are 7.6 times more likely than higher-wage workers to need a new job. Meanwhile, job growth is in health care, construction and management.

Richard Florida, urban planner and author of The rise of the creative classsaid Fortune that changes like this have already happened. “Earlier, most people worked in agriculture. Today, 1% of the workforce works in agriculture,” he said. “Previously, most people worked in manufacturing: 50 to 60 percent worked in manufacturing. Today, 5 to 6 percent of the workforce works in manufacturing.”

Florida, which was not involved in the McKinsey report, expects displaced service workers to land in what it called “a wide range” of wellness jobs, from fitness and dermatology to Pilates studios. “I think there will be some travel,” he said. “But I think it’s also the area where we’re going to create the most work.” Some of the old service jobs, he said, are “transforming into much better-paying welfare jobs.”

McKinsey data indicates that some of these changes may be difficult for some workers. Only one in seven displaced workers has direct access to a growing job, that is, a job that requires little retraining and is at least as well paid. Nearly half of them face what the report calls an “unpaved” path, blocked by significant gaps in skills or educational requirements. About 85% of growing jobs require a degree.

Florida said employers are already changing what they’re looking for. “Before, we hired really smart people because they’re smart, and then we just watch how they do, whether they progress or whether they disappear,” he said. “Now we’re hiring to replace us. So we’re hiring people who are not only smart, but who can grow the business, work with customers, work with customers, work with others.”

Geography is the other obstacle. According to McKinsey, about 76% of growing jobs cannot be done remotely, including work in hospitals, on construction sites and in data centers.

Research in Florida has long tracked how different types of work take hold in different places. “There is manual labor, which is akin to agricultural work or factory work, and which tends to be distributed almost everywhere in space,” he said. “Then there is cognitive work, which tends to be concentrated in large cities.”

Cities take the lead

He added that people are already willing to leave to take advantage of opportunities, even in places whose politics they don’t like. He pointed to Canadians moving from Toronto to Miami. “They don’t necessarily like political conservatism. They don’t necessarily like Donald Trump,” he said. “But they like that Miami is a great place to live, has low taxes and has lots of economic opportunities.”

People who move to Nashville, where he now teaches, tell him, “It’s great to live in a blue city in a red state. I pay less taxes. I can still live in a nice city, but I’ve saved a huge percentage of my income.”

When he wrote The rise of the creative class in 2002, Florida said he did not anticipate how technology would allow people to disperse. “I certainly haven’t talked about the rise of AI and AI technology and how that would enable people to distribute.”

Cities are also trying to attract talent by building universities. Citadel founder Ken Griffin, who moved the hedge fund from Chicago to Miami in 2022, committed $3 billion to Carnegie Mellon University on September 30. Of that, $2 billion will fund a new campus in Miami, which plans to enroll its first students in 2028. Vanderbilt is building a graduate campus in West Palm Beach focused on business, AI and data science, with $50 million from developer Stephen Ross to lead the fundraising.

Florida, who joined the Vanderbilt faculty this fall, said wealthy people who moved to South Florida initially realized they didn’t have to bring their businesses with them. They could just bring their boats and their family office. Griffin, he said, “realized he needed to be an anchor for talent.”