Millions Will Have to Change Jobs to Keep Up
The pandemic has sped up transformations in the labor market that could force more than 10% of workers in the United States into a new line of work, according to a new report.
In the U.S., 17.1 million people will likely need to change jobs in the future, a 28% increase from a pre-pandemic estimate, according to a study on the future of work released by McKinsey Global Institute Thursday. Of those, 14.9 million may need to switch industries completely by 2030.
Those with less than a college degree, Black and Hispanic people, and women are more likely to be affected as jobs disappear in the next decade.
The scope of the change has been altered by the pandemic, which highlighted the physical dimension of how we work and pushed businesses toward adoption of already existing trends like remote work, e-commerce, and automation.
Many low-paying jobs that were already primed for losses due to decreased demand or increasing automation could see even deeper cuts as a mass transition occurs in a post-pandemic world. Office clerks, retail salespeople, cashiers, and food servers are among the jobs most likely to disappear by the thousands.
While a boom in e-commerce could create thousands of new positions in the warehousing and transportation industries, for example, it won't be enough to offset the permanent loss of 4.3 million jobs in customer and food service, according to McKinsey’s model.
Automation could replace as many as 45.3 million more workers in the U.S. by 2030, particularly for physical labor like packing packages, welding and soldering. This is a 5-percentage point increase from McKinsey’s pre-pandemic estimate, a jump based in part on a July 2020 survey McKinsey conducted of 800 executives from around the world. Two-thirds of the executives said they would be increasing their investment in automation and AI either somewhat or significantly. Industries with the highest levels of human contact were the most likely to be automated.
Middle- and low-earners will also lose overall share in the job market, McKinsey forecasts, with more job creation in high-paying roles. By 2030, there likely will be 1.9 million fewer jobs for middle earners and only modest job growth for the bottom 30%. Meanwhile, there could be 6.6 million more jobs for people in the top 30% of earners, with increased demand for workers in healthcare and in science, technology, and engineering.
More than half of displaced low-wage workers hoping to find employment will need to develop new skills in order to find work, often in one of those new, in-demand high-paying jobs, the report said.
The pandemic hit the lowest-paid workers the hardest from the outset as the spread of COVID-19 led to business closures, notably in travel and leisure. In the first few months of the pandemic, the bottom 25% of workers made up about half of the people who had either become unemployed or who stopped looking for work completely, according to an August analysis from the Federal Reserve Bank of San Francisco.
As of December, employment among low-wage workers (those making less than $27,000 annually) was estimated at 22.5% lower than in January 2020, while high-wage workers (those making more than $60,000 per year) had more than recovered, with employment 2.3% higher, according to Opportunity Insights, a nonprofit based at Harvard University that analyzes data from payroll processors, financial service firms and e-commerce outlets.