A new report from the McKinsey Global Institute projects that AI and automation will eliminate demand for about 36 million jobs in the US by 2035, while creating approximately 41 million new roles, resulting in a net job gain. However, the challenge lies in workforce mobility, as around 11 million Americans, or 7% of the workforce, will need to switch careers entirely during this period, according to the report published this week.
The report outlines that about 770,000 workers annually will have to transition to different fields, such as moving from retail to healthcare, which is roughly 3.6 times the historical average of career switches. This shift is significant compared to the 788,000 annual moves recorded between 2019 and 2022 during the pandemic, which did not cause lasting employment damage. The report emphasizes that this level of occupational mobility is unprecedented in recent decades, noting that worker movement between employers has generally declined since the late 1990s.
Job losses are concentrated in lower-paid sectors like office and administrative support, retail, and transportation, with lower-wage workers being 7.6 times more likely to need new occupations than higher-wage workers. Conversely, job growth is expected in healthcare, construction, and other sectors. The findings highlight the scale of retraining and reskilling efforts needed to accommodate this workforce transition, underscoring the importance of policies and programs that support career mobility amid technological change.
The McKinsey report also compares its 2035 forecast with a 2023 projection that anticipated 12 million career switches by 2030, indicating a consistent expectation of significant workforce transformation. The next decade will require substantial adjustments in labor markets, with about 11 million workers needing new careers to meet evolving job demands.