AI will create more jobs than it kills, McKinsey says. The catch: 11 million Americans may need new careers

McKinsey’s new forecast says the labor market is not heading for a simple shortage of jobs. It is heading for a massive reshuffle. By 2035, AI and automation are expected to reduce demand for about 36 million U.S. jobs while creating about 41 million elsewhere. The headline number sounds reassuring. The catch is the human part: getting the right workers into the right seats.

In the firm’s base case, about 11 million workers — roughly 7% of the U.S. workforce — would need to leave their occupations entirely. The range runs from 6 million to 16 million. That is close to McKinsey’s 2023 call for 12 million career switches by 2030, and the new report argues this is less about layoffs than about movement across fields. Think retail into healthcare, not just one office to another.

The pace is the hard part. McKinsey estimates roughly 770,000 people a year would need to make a full occupational switch, about 3.6 times the historical average. The report points out that about 788,000 workers a year did similar moves from 2019 to 2022 during the pandemic, without lasting damage. Still, workers are already changing employers less often than they did in the late 1990s and early 2000s, which makes that required churn look even steeper.

The pain would not be evenly spread. The shrinking jobs are mostly in office and administrative support, retail, and transportation, much of it lower-paid work. Lower-wage workers are 7.6 times as likely as higher-wage workers to need a new occupation. Meanwhile, the growth is in healthcare, construction, and management. That is not a neat handoff. It is a credentials problem, with about 85% of growing jobs requiring a credential.

McKinsey says only one in seven displaced workers has a direct path into a growing job that needs little retraining and pays at least as much. Nearly half face what the report calls an “unpaved” path, blocked by skill gaps or credential requirements. Geography makes it harder still: about 76% of growing jobs cannot be done remotely, including work in hospitals, on construction sites, and in data centers. The jobs are there. They just are not sitting politely where the workers already are.