Automation Might Eliminate 70 Million US Jobs by 2030

The key word here is ‘might.’ It’s more probable that while some jobs will become obsolete, others will take their place, according to a report from McKinsey Global Institute. Their key findings state that while there may be enough work for full employment up to the year 2030, in most cases the transition to new jobs as the old become automated will be very challenging. McKinsey estimates that almost a half of all work activities on a global scale have the ability to be automated and based on economic, social and technical factors- zero to a third of those could be displaced by 2030.

In the US, 39 to 73-million jobs could be eliminated by then, but roughly 20-million of those would have the ability to be shifted into similar occupations but perform different tasks. If those numbers are correct, that means 16 to 54-million workers would need to be retrained for new occupations. The employment growth necessary to replace those axed jobs, ironically, will come from automation itself, workers will be required to operate those machines. Jobs will also be created with the rise in demand for more healthcare workers, engineers and the renewable energy industry, which is why there is a significant push of the STEM curriculum in most US schools.

As you might imagine, the jobs affected by automation are physical ones- assembly line workers, those in fast food are already on track to lose their jobs, even those working in data collection and processing (mortgage origination, paralegal work, accounting, etc.) would suffer under automation. On the other side of the coin, the safest jobs from the effects of automation will be those that manage people, those requiring high-level expertise and those in unpredictable environments, including scientists, educators, and IT professionals. Gardeners, those in the trades (carpenters, plumbers, electricians, etc.) and those that care for the elderly will also survive.

To put that into perspective- those with high-paying jobs will likely be unaffected while those in mid-level positions will see the most significant decline and low-level earners could see growth in job numbers. McKinsey states that because low-level employees cost less, they are often not worth supplanting with technology. Ultimately, this will widen the divide between wealthy and middle/lower-class households.

Image credit: TGW Mechanics via Wikipedia)

There are two major challenges with this perspective outlook according to the report, with the first being the retraining of workers in the middle of their careers- the Great Recession (2007-2012) showed businesses fell short in the retraining of the 15-million workers who lost jobs in the US. The other major challenge will be trying to find employment for low-wage earners as the report states, “there are few precedents in which societies have successfully retrained such large numbers of people.”

In these cases, the government would need to provide income support and other assistance to supplement worker’s transitions to new occupations as well as increasing investments in infrastructure and energy to bolster economic growth. The report maintains that automation will disrupt the employment sector and the transitions will rival or exceed past shifts out of agriculture and manufacturing.

According to the authors of the report, the question about the future of work was done using two different sets of analyses- “one based on a limited number of catalysts of new labor demand and automation, the other using a macroeconomic model of the economy that incorporates the dynamic interactions among variables.” Both led them to conclude that with sufficient economic growth, innovation and investment there will spur enough job growth to offset the impact automation will have on employment.  

Though this study was focused on the USA, what is the global impact going to look like?

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