The latest robot report has bad news for laborers and office support staff, good news for techies and healthcare workers. India looks bright, while Japan could face the toughest stretch.
Those are just some of the takeaways from McKinsey Global Institute’s data-packed analysis of the effects of automation on employment between now and 2030. The bottom line? Hundreds of millions of workers around the world will be displaced due to the revolutions in robotics and artificial intelligence.
“Displaced” is the key term: Many of those workers will adjust to the new conditions. But it won’t be pretty, McKinsey’s analysts say. As many as 375 million workers, including 38.6 million Americans, may have to switch occupations or learn new skills to hold down a job in 2030.
“Our key finding is that while there may be enough work to maintain full employment to 2030 under most scenarios, the transitions will be very challenging — matching or even exceeding the scale of shifts out of agriculture and manufacturing we have seen in the past,” the analysts write.
Some of the factors affecting automation’s impact has to do with historical wage levels, demographics and expected economic and social trends. That’s why McKinsey’s estimated labor demand for creative types, such as artists and entertainers, is projected to rise by 85 percent in China but fall by 4 percent in Japan.
India’s expected to have 129 percent higher demand for technology professionals, compared with 15 percent for Japan and 34 percent for the U.S. The corresponding figures for health care are 242 percent for India, 30 percent for the U.S., and a drop of 1 percent for Japan.
Predictable physical work, ranging from dishwashing and food preparation to protective services, takes the biggest hit in McKinsey’s analysis. Which is totally predictable. While India and Mexico are projected to have slight employment gains, most countries will see significant reductions. In the U.S., for example, that could amount to a 31 percent job loss.
The outlook is only slightly less grim for office support workers, including IT workers. The U.S. displacement rate is expected to hit 20 percent.
The McKinsey study also accounts for ways in which automation could boost human employment — for example, by opening up new fields, boosting productivity and encouraging new investment.
To deal with the transition, the analysts say many countries may have to launch “an initiative on the scale of the Marshall Plan, involving sustained investment, new training models, programs to ease worker transitions, income support, and collaboration between the public and private sectors.”
The options for income support could include initiatives such as more comprehensive minimum-wage policies, wage gains tied to productivity growth, or universal basic income.
Unfortunately, McKinsey notes that “investment and policies to support the workforce have eroded” over the past few decades.
During the final weeks of the Obama administration, a White House report on the economic impact of advances in artificial intelligence called for more resources to be devoted to education and job training, as well as the social safety net.
However, the Trump administration has devoted little attention to the issue. To the contrary, Treasury Secretary Steven Mnuchin told an interviewer in March that policymakers wouldn’t have to put AI’s employment impact on their radar screen for “50 to 100 years.”