The Future of Work: Analysts Estimate Fewer Jobs and More Tech in Tomorrow’s Job Market
Researchers say Covid-19 has accelerated a push to automate tasks and eliminate jobs, a trend that favors new technologies and a technical workforce.
For many Americans, 2021 has been about rebuilding and preparing for a post-pandemic world. There is a zealousness to recover old jobs, start new businesses, and go back to work. Yet as America readies itself for its big return, analysts fear scarce job prospects due to a surge of automation and artificial intelligence.
The pandemic’s push to limit human interaction has compelled whole industries to reconfigure how they do business, a drive that has raised the demand for machine automation, AI, and online services.
In Northern California, the California Department of Transportation laid off roughly 250 Bay Area toll workers permanently as it transitioned to digital toll collection. Walmart and Sam’s Club expanded the use of robotic floor cleaners and inventory scanners. There are also a wide array of examples of robots acting as essential workers, monitoring patients, sanitizing hospitals, patrolling facilities, making deliveries, and aiding healthcare providers.
AI is contributing to this worker displacement. In recent years, the technology has gradually—and often inconspicuously—replaced the jobs of office receptionists, telemarketers, research analysts, cashiers, proofreaders, and retail clerks.
As companies downsized and restructured during the pandemic, researchers report an aggressive demand for technology and opposition to human labor. For instance, out of the roughly 40 million jobs lost during the pandemic, 32-42 percent will not return, according to an estimation from the Becker Friedman Institute at the University of Chicago.
Further, in its own analysis, McKinsey & Company projects roughly half of the tasks performed by today’s workforce can be automated, meaning certain jobs won’t necessarily disappear but may require far fewer people to fill them.
The findings prompt serious and critical questions about the evolving job market and how new tech, labor policies, and industry trends will impact America’s workforce in the coming years.
Equally important, education will be a critical component to overcoming obstacles and adapting to new technologies. Those entering or already in the workforce will be compelled to explore traditional and non-traditional education, degrees, and contemporary certificated courses.
Short-term displacement and instability
Unfortunately, while advances in AI, machine learning, and automation are expected to increase productivity and even seed new industries and jobs, it’s unclear if these inventions will benefit workers in the short term.
If history follows course, experts fear the immediate effects on the American workforce will be negative. The Economic Policy Institute reports that from 1979 to 2019, the nation’s net productivity rose 72.2 percent, while wages for middle to entry-level workers rose a mere 17.2 percent—adjusted for inflation. Researchers forecast a larger wealth gap between the rich and poor and a profusion of low-wage jobs if businesses continue to prioritize shareholder profits over employee prosperity.
“The risk is that automation could exacerbate wage polarization, income inequality, and the lack of income advancement that has characterized the past decade across advanced economies, stoking social and political tensions,” McKinsey researchers wrote.
Another catalyst for AI-based job displacement is found in the U.S. tax system. The federal government taxes employers for each employee via payroll taxes, and at the same time, allows companies to expense machinery and software purchases. The tax breaks come through Trump Administration’s 2017 Tax Cuts and Jobs Act.
Daron Acemoglu, an MIT economist specializing in automation and workforce analysis, said the tech world has only accelerated this trend with automated systems and small workforces.
“The US tax code aggressively subsidizes the use of equipment and taxes the employment of labor,” Acemoglu said in the Journal of Economic Perspectives. “A tendency towards further—and potentially excessive—automation may have been reinforced by the growing focus on automation and use of artificial intelligence for removing the human element from most of the production process.”
A dearth of investment in education and job skills development is a third major stumbling block for workers. In McKinsey’s research, professions least likely to be impacted by AI and automation were those that required a high level of education and skill. For many Americans, entering or transitioning to such professions may be a challenging task.
Even if workers have the mental capacity and fit for such professions—McKinsey spotlighting science, technology, engineering, and mathematics (STEM) careers—they may not have the funding to make the leap. Costs for education have continued to climb, and the U.S. spends less than half of what it did in the 90s for job transition programs.
Adapting to an Automated Workplace
Despite troubling forecasts and the hardships inherent in systemic change, researchers also see the potential for adaption. There will be opportunities for policy shifts, alternative pathways for job transition, and fresh job demand in yet-to-be-imagined industries and careers. These new options include technical education, certificate courses, coding boot camps, and other novel and affordable educational programs to help workers find employment.
The goal in the next decade will be bridging the skills gap to these new careers. By 2030 McKinsey estimated top job growth will come from technology-based careers. There will be great demand for professions with a high degree of social and emotional skill sets and careers that require higher-level cognitive skills.
In contrast, McKinsey predicts that by 2030 jobs centered around physical and manual tasks will contract sharpest along with jobs comprised of lower-level cognitive skills such as data-entry clerks and cashiers.
“Occupations made up of physical activities in highly structured environments or in data processing or collection will see declines,” McKinsey researchers said. “Growing occupations will include those with difficult to automate activities—such as managers—and those in unpredictable physical environments such as plumbers. Other occupations that will see increasing demand for work include teachers, nursing aides, and tech and other professionals.”
More than anything, researchers agree perennial learning will be a necessity to ensure workers keep pace with the advance in technology. An aptitude with AI assistants and robotic tools may be the norm. McKinsey said this would likely mean dealing with changes in traditional workflows and the supervision and management of autonomous and automated devices.
“As self-checkout machines are introduced in stores, for example, cashiers can become checkout assistance helpers, who can help answer questions or troubleshoot the machines,” McKinsey said. “More system-level solutions will prompt a rethinking of the entire workflow and workspace.”
The World Economic Forum predicted by 2025, more than 50 percent of all professions will need reskilling or upskilling to accommodate advances in technology.
“Increased digitization resulting from COVID-19 may accelerate this trend [in automation]. By the mid-2030s, as AI advances and becomes more autonomous, 30 percent of jobs and 44 percent of workers with low levels of education will be at risk of automation.” WEF researchers said. “In the next five years, half of all workers will require some upskilling or reskilling to prepare for changing and new jobs.”
Predictions aside, researchers say what comes next will hinge on both public sector and private sector policy decisions. These decisions will impact education, social safety net programs, labor-based tax incentives, investments in human capital, and moves to promote social mobility.
“It’s not all doom and gloom,” said MIT Economist Daron Acemoglu. “There is nothing that says technology is all bad for workers. It is the choice we make about the direction to develop technology that is critical.”
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