The Next 11 Years in United States Jobs: McKinsey Looks at Automation

This past week I was thoughtfully informed of a report that came out earlier this month.  McKinsey Global Institute, and especially authors Susan Lund, James Manyika, Liz Hilton Segel, André Dua, Bryan Hancock, Scott Rutherford, and Brent Macon, issued “The future of work in America: People and places, today and tomorrow.”  Despite the more general title, the 28-page paper was limited to the projected effects of automation through 2030, but ended with a section framing courses of action. 

After an introduction in which the authors, to their great credit, mentioned the need to have “more inclusive growth” around the country, they presented five section titles to be fleshed out.  The first, “local economies have been on diverging trajectories for years,” when documented with assignment of almost every American city or its county into 13 “archetypes,” surprised me with how small the differences actually were, with the largest gap, between the 11 “small powerhouses” (e.g. Bend, Oregon and Charleston, South Carolina) and the about 1,000 widespread counties of “distressed Americana,” between a 16% 2007-2017 jobs gain and a 5% loss.  A chart showed the progression or regression of jobs in five of these groups, along with the overall average – while each lost positions between 2007 and 2009, the “high-growth hubs” and “megacities” rebounded and then some, but the poorest 1,000 have only a barely upward-sloping line from 2009 to 2017, showing that they had not recovered from the Great Recession.  One problem with the authors’ classification system is that city and county inclusion came from after-the-fact jobs progress, not original definitions, which accentuated differences; we could not have anticipated, for example, which 192 counties would be named “rural outliers” which “have found some success with tourism or mining and energy.”  Per the article, Americans are not relocating in large numbers for better job opportunities from the least prosperous places; that is probably for two reasons beyond the community-ties one the authors mentioned, that they could not anticipate which cities and counties would do the best, and that they were not confident that opportunities there would be long-lasting. 

The second section, “automation will not be felt evenly across places or occupational categories,” was mainly an updated view of the focus of my 2013 Choosing a Lasting Career and various works since then.  The authors said, correctly in my assessment, that “what lies ahead is not a sudden robot takeover but a period of ongoing, and perhaps accelerated, change in how work is organized and the mix of jobs in the economy.”  They also mentioned that while “less than 5 percent of occupations can be automated in their entirety, but within 60 percent of jobs, at least 30 percent of activities could be automated by adapting currently demonstrated technologies,” important since the largest mechanization threat to employment is not entire positions going away, but employers cutting workers by reorganizing workloads, automating portions where that is possible and leaving humans with the tasks machines cannot do.  I also add that mechanizing is often not as cost-effective in less populous areas with fewer opportunities, and so will often be slower there.  The authors held that “the hollowing out of middle-wage jobs” could continue, and forecasted “strong job growth in healthcare (yes), STEM occupations (I still disagree), creative fields (not sure), and business services (until individual ones become automatable).”  For better or worse, a chart showing mechanization exposure by field projected no effect from driverless vehicles.

Section 3, “in the decade ahead, local economies could continue to diverge,” dealt with new positions being concentrated, in particular with 60% of 2030 employment growth going to “25 megacities and high-growth hubs (e.g. Austin, Charlotte, and Las Vegas), plus their peripheries,” and included a projection that rural counties in general could see no net employment increase.  The fourth section, “less educated workers are most likely to be displaced, while the youngest and oldest workers face unique challenges,” found that those with high school or lower schooling are still the most vulnerable to automation.  One fine insight was that many of the jobs people have often used to start careers, especially in retail and food service, “are the very roles that automation could phase out,” and that older workers, heading toward retirement, will often be pushed their earlier.

The final segment, “local business leaders, policy makers, and educators will need to work together to chart a new course,” while necessarily unspecific, provided an outline of how to deal best with automation.  Its four subsections were: “connecting workers with new opportunities,“ mentioning somehow-cheaper urban housing, relocation tax credits, and “new digital tools” as solutions; “retraining workers and providing lifelong learning,” suggesting enlarging and geographically expanding skill-teaching programs (most likely with special emphasis on online and community college curricula);  “creating tailored economic development strategies to boost job creation” including the critical need for high-speed Internet access everywhere, and for areas to take stock of what assets they have; and “supporting workers,” not detailed much except for the idea of portable benefits, which is a dead letter for most low-income employees as they have few of any kind.  In a final paragraph, Lund et al. noted that “the challenge is not fighting against technology but preparing US workers to succeed alongside it.”

Overall, how do I evaluate “The Future of Work in America”?  It was excellent in general.  It had sober conclusions and estimates.  My disagreements were generally minor and expected.  While closely related to Choosing a Lasting Career, its audience was not workers but those influencing public policy.  It would have profited from addressing the gap between having specific job skills and actually being hired.  It could easily be expanded to book length, and further efforts could go in many different directions.  In the meantime, though, its strength at communicating and provoking thoughts about its overall message, which I took as “it’s a lot of work to get enough jobs,” means it belongs in the hands, or on the computers, of every pertinent city and county official in the nation.