Artificial intelligence and automation could reduce demand for about 36 million jobs in the United States by 2035, while economic growth in other areas is expected to generate roughly 41 million positions, according to a new report from the McKinsey Global Institute.
The figures suggest that the US labour market may not necessarily face a shortage of jobs overall. Instead, the bigger challenge could be moving workers from declining occupations into the areas where demand is expanding.
McKinsey describes the coming transition as a problem of workforce mobility rather than a lack of employment opportunities.
Millions May Need to Change Careers
Under McKinsey’s base-case scenario, around 11 million American workers, equivalent to about 7% of the workforce, could need to leave their current occupations entirely.
The report places the possible range between 6 million and 16 million workers, depending on how quickly technology changes employment patterns and how the economy develops.
The scale of the potential transition is broadly comparable with McKinsey’s earlier estimate that 12 million workers could need to change occupations by 2030.
Retail and Office Jobs Among Those Most Exposed
The occupations expected to experience the largest declines include office and administrative support, retail and transportation roles.
Many of the affected positions are lower-paid jobs, creating a particular challenge for workers who may have fewer opportunities to absorb the cost of retraining or moving into a new profession.
McKinsey estimates that lower-wage workers are 7.6 times more likely than higher-wage workers to require a change of occupation.
Healthcare and Construction Could Gain Workers
At the same time, employment growth is expected in sectors including healthcare, construction and management.
The problem is that workers leaving declining occupations may not automatically possess the skills or qualifications required for these expanding roles.
McKinsey estimates that only about one in seven displaced workers has a direct route into a growing occupation that requires limited retraining while offering at least the same level of pay.
Nearly half could face what the report describes as an “unpaved” pathway, meaning significant skills gaps or credential requirements stand between them and a new job.
Career Changes Could Become Far More Common
The scale of occupational movement projected by McKinsey would represent a significant increase from historical patterns.
The report estimates that approximately 770,000 workers each year could need to move into a completely different occupational field, such as transitioning from retail into healthcare.
That would be about 3.6 times the historical average.
There is evidence that large-scale movement is possible. During the pandemic period between 2019 and 2022, approximately 788,000 workers per year made comparable occupational changes without causing lasting damage to the wider labour market, according to the report.
However, workers have generally become less likely to switch employers compared with the late 1990s and early 2000s, apart from the temporary increase recorded during the pandemic.
Credentials Could Become a Major Barrier
Education and professional qualifications are another obstacle for workers attempting to follow the new employment opportunities.
McKinsey estimates that approximately 85% of growing occupations require some form of credential.
That means simply having transferable experience may not always be enough for workers seeking to move from shrinking sectors into areas where employers are hiring.
Richard Florida, an urbanist and author of The Rise of the Creative Class, said employment has undergone major structural changes before, pointing to the dramatic decline of agricultural and manufacturing employment over previous generations.
He suggested that some displaced service workers could eventually move into a broader range of wellness-related occupations, including areas such as fitness, dermatology and Pilates.
Employers Are Changing What They Want
Florida also argued that employers are increasingly looking beyond traditional measures of academic ability when recruiting.
He said businesses are placing greater emphasis on candidates who can help develop operations, interact with customers and clients, and collaborate effectively with other employees.
That shift could become increasingly important as companies reorganise their workforces around automation and AI.
Instead of simply replacing workers with technology, some employers may also seek people capable of performing tasks that require interpersonal skills, business development and collaboration.
Geography Could Make the Transition Harder
Where jobs are located could become another major obstacle.
McKinsey estimates that about 76% of occupations expected to grow cannot be performed remotely.
That includes jobs in hospitals, construction sites and data centres, meaning workers seeking these opportunities may need to relocate rather than simply find a new position from home.
Florida’s research has long examined how different types of employment are distributed geographically. He noted that manual occupations have historically been spread more widely, while cognitive work has tended to concentrate in major cities.
Workers May Have to Follow Opportunity
The geographic shift could increase competition between cities seeking to attract skilled workers.
Florida pointed to migration patterns involving places such as Miami and Nashville, where lower taxes, lifestyle considerations and economic opportunities can influence people’s decisions about where to live and work.
He also argued that technology has changed the relationship between employment and geography, allowing some types of work to become more geographically dispersed than he anticipated when The Rise of the Creative Class was published in 2002.
The growth of AI could accelerate that transformation further.
Universities Become Part of the Talent Race
Cities and regions are also investing in universities and advanced education facilities as they compete to attract future workers.
Citadel founder Ken Griffin, who moved the hedge fund from Chicago to Miami in 2022, committed $3 billion to Carnegie Mellon University on September 30. About $2 billion of that commitment is intended to support a new Miami campus, which plans to welcome its first students in 2028.
Vanderbilt University is also developing a graduate campus in West Palm Beach focused on business, artificial intelligence and data science, with developer Stephen Ross contributing $50 million to the fundraising effort.
Florida, who joined Vanderbilt’s faculty this year, said South Florida’s wealthy newcomers eventually recognised that building a long-term economic hub would require more than relocating families and financial operations.
The Bigger Challenge Is Moving Workers
The McKinsey projections point to a US labour market undergoing a major reorganisation rather than simply losing jobs to technology.
With millions of positions potentially declining while even more jobs emerge elsewhere, the central issue could be whether workers can acquire the skills, credentials and geographic flexibility needed to make the transition.
For millions of Americans, the impact of AI may therefore be determined not only by which jobs disappear, but by how accessible the next generation of jobs become
