AI should create more jobs than layoffs, though it will still be painful

Summary

New research from the McKinsey Global Institute estimates 11 million American workers will need to find different jobs in the next decade, but another 41 jobs will be added.

Advances in AI and automation will force an estimated 11 million American workers to find new occupations over the next decade, but also will add almost quadruple that number of jobs to the economy, new research confirms.

The numbers, laid out by the McKinsey Global Institute in a new report on Tuesday, gives another perspective of the impact on the U.S. labor market—by 2035.

The jobs added aren’t really surprising to experts.

MGI’s director, Tanguy Catlin, told Barron’s that the introduction of new technologies generally lead to long-term job creation driven by the need to support the technologies themselves, but also by the fact that innovation typically increases the standard of living and generates higher demand.

“There is reason for optimism,” says Caitlin, who is also a senior partner. “Over the course of the next 10 years, there will be more jobs and, on average, better jobs—and that’s something that is quite positive.”

But these same forces will probably lead to churn in the labor market, reducing demand by about 21% of the current hours worked. That will lead to significant changes in how various jobs are performed.

AI, for example, rarely reduces work without also creating responsibilities in the form of reviewing agent-generated responses and work, and supervising new systems and workflows.

Cashiers, for example, will shift from processing transactions to focusing more customer engagement and supervising AI systems, the team at McKinsey predicts.

Many workers will be displaced entirely. About 770,000 workers are expected to switch occupations each year over the next decade, McKinsey finds. That’s roughly 3.6 times the historical average, but not unusual for a period of rapid technological change, Catlin says.

Write to Megan Leonhardt at megan.leonhardt@barrons.com