Technology

Generative AI to trigger 12 million occupational shifts in America by 2030: report

The landscape of the US labour market is experiencing a swift transformation, reshaping the way people work and the nature of their jobs. The recent surge in generative AI, with its natural language capabilities, has propelled automation possibilities to a whole new level, encompassing a broader range of occupations. 

During this period of disruption, workers experienced significant job mobility, with a subset of them making substantial leaps, transitioning into completely different occupations. 

According to the Generative AI and the future of work in America report by the McKinsey Centre for Government, from 2019 to 2022, a total of 8.6 million occupational shifts occurred. However, the pace of change is not slowing down; it is set to accelerate further. 

By 2030, an additional 12 million occupational shifts has been anticipated, making the total number of transitions through 2030 potentially 25 per cent higher than our projections just over two years ago.

The United States stands at the forefront of AI investment, innovation, and implementation, boasting the presence of major industry players like Google, Microsoft, and OpenAI within its borders. 

Although the UK was surpassed by Singapore in this year's Global AI Index, it remains a significant global leader and will experience the transformative impact of AI on society, much like other leading nations.

The report highlighted that women face a higher risk of displacement by automation, primarily because they hold a larger share of office support and customer service roles. Consequently, they are 1.5 times more likely than their male counterparts to undergo the transition to a new job.

As per the report findings, the office support and customer service sectors are projected to witness a decline in their workforce by approximately 3.7 million and 2 million workers, respectively. On the other hand, the highest paying job quintile is expected to experience growth, with approximately 3.8 million new jobs created.

The extensive integration of AI is anticipated to result in a significant impact on low-wage workers, making them 14 times more likely to undergo occupational changes. The report emphasises that lower-paid occupations are disproportionately occupied by people of colour and women, highlighting the existence of inequitable structures that hinder their access to higher education or better-paying positions.

Despite the potential workforce losses, AI presents a significant opportunity to boost domestic productivity growth by three to four percent by 2030.

“However, this will require significant action from stakeholders across the public and private sector. Workers will need support in learning new skills, and other risks associated with generative AI also need to be mitigated and controlled,” stated the study.

In response to the upcoming challenges, the report emphasises the importance of implementing training programs offered by industry groups, educational providers, and non-profits. These programs aim to assist disadvantaged workers in transitioning to higher-paying, in-demand jobs. 

Furthermore, the study urges employers to reconsider their hiring practices, encouraging them to attract and retain workers from a broader range of candidates beyond their usual pool. The research indicates that skills acquired through work experience can be a more influential factor in determining success than formal education. Remarkably, approximately 60% of US workers possess significant skills gained through experience without having a college degree.

Becoming more flexible with workers can play a vital role in recruiting demographics that are often overlooked, including elderly workers. Research from Flexibility Works highlights that reskilling older workers could significantly address labor shortages, and the best approach is to offer more flexible work arrangements.

Such arrangements might involve reducing overall working hours, providing flexible start and finish times, or implementing a compressed work week where the same number of hours is worked in fewer days. These benefits can also extend to individuals, especially women in caregiving roles, enabling them to enter male-dominated fields facing skills shortages.

This report serves as a crucial reminder to businesses and policymakers implementing AI to consider the broader impact of their decisions. Additionally, it underscores the potential for this technology to create a job market that is inclusive and works for a more diverse range of people.

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