An estimated 800 million workers worldwide may lose their jobs to robots and automation by 2030, according to a new report by the McKinsey Global Institute (MGI). That’s the equivalent of more than a fifth of today’s global labor force.
The study, conducted by McKinsey’s research arm, covered 46 nations and more than 800 occupations.
The researchers found that “60 percent of occupations have at least 30 percent of constituent work activities that could be automated.”
The consulting company said Wednesday that both developed and emerging countries will be impacted by the labor developments, though poorer countries that have less money to invest in automation will not be affected as much.
India, the authors write, will only have about 9% of jobs replaced by emerging technologies.
The United States and Germany, however, are predicted to potentially lose up to a third of their labor force. In the US alone, 39 to 73 million jobs may be eliminated by 2030, but about 20 million of those displaced workers may be able to easily transfer to other industries. In the UK, 20% of current jobs will be automated over the same period, the authors forecast.
In developed economies like the US, automation is also likely to lead to increased inequality. High-paying creative and cognitive jobs will be at a premium, while the demand for middle and low-skill occupations will decline. The result, says McKinsey, will be a “two-tiered labor market.” Previous reports have come to the same conclusion, finding that individuals in higher income brackets are more able to adapt to a changing job market, and that social mobility will suffer as a result, as traditional “stepping-stone jobs” (like a clerk working in a law firm) are eliminated.
Machine operators and food workers will be hit hardest, the report says, and tasks carried out by mortgage brokers, paralegals, accountants, and some back-office staff are especially vulnerable to automation.
Jobs requiring human interaction such as doctors, lawyers, teachers, and bartenders are seen by McKinsey as less prone to automation, though not completely immune.
Specialized lower-wage jobs, such as gardening, plumbing, and care work, will also be less affected by automation, the study predicted.
In developed countries, the need for a university education will grow, as jobs that require less education shrink.
Even if the rise of robots is less rapid, 375 million of those displaced workers will need to learn a brand new skill set and completely switch careers over the next 13 years. The good news for those displaced is that there will be jobs for them to transition into, although in many cases they will require learning new skills to do the work. Those jobs will include health-care providers for aging populations, technology specialists, and even gardeners, according to the report.
McKinsey emphasizes that the worst effects of this transition can be mitigated if governments take an active role. Michael Chui, the lead author of the report, compared the level of action needed to the Marshall Plan — an American initiative that pumped some $140 billion into Western Europe after WWII, helping countries rebuild and industrialize.
“Income polarization could continue in the United States and other advanced economies,” the researchers noted. “If re-employment is slow, frictional unemployment will likely rise in the short-term and wages could face downward pressure.”
McKinsey isn’t the only group studying the effects of artificial intelligence on wages and economic growth.
A recent working paper penned by economists from Northwestern, Stanford, and the College de France explored what would happen to economic growth if artificial intelligence starts generating original thought. A rapid uptick in the rate of innovation – and in new ideas – has led some to speculate about economic hypergrowth and ever-increasing GDP gains.
But to help transition to a future with increased automation, businesses and policymakers will “need to act” to keep people employed, suggests the McKinsey research.
McKinsey notes that governments will have to develop and provide extensive job retraining to help displaced workers as well as providing more generous income supplements.
“Beyond retraining, a range of policies can help, including unemployment insurance, public assistance in finding work, and portable benefits that follow workers between jobs,” the report suggests. Additionally, possible solutions to supplement incomes should be explored, such as “more comprehensive minimum wage policies, universal basic income, or wage gains tied to productivity,” the researchers wrote.
The research cited the U.S. High School Movement at the turn of the last century and the G.I. Bill as key examples of how developed countries can cope with the disruptive effects of a transforming economy.
“In many decades hence, the value of this labor may be diminished if we reach a state in which machines can do a large share of the work,” concluded the report. “For workers around the world, policy makers, and business leaders — and not just social scientists who specialize in socio-economic paradigms — that should give pause for thought, and be a spur for action.”