The present and future of work in America

Over the past couple of years, the McKinsey Global Institute has contributed to a growing body of research looking at how AI and other automation technologies will change the nature of work.  Our previous reports focused on what the technologies themselves can do and on the implications for employment at the national and even global levels.

But for most people, the labor market that really matters is the one where they live. Our latest report, The future of work in America: People and places, today and tomorrow, takes a more granular look at the state of local labor markets today, then assesses how things might play out for specific types of communities and demographic groups across the United States.

Our team analyzed 3,000 US counties and 315 cities, compiling more than 40 variables on each place to understand its recent growth, industry mix, educational attainment, and more. Using this information, we sorted each location into 13 community segments.

Megacities and high-growth hubs, where 96 million people live, are the nation’s most vibrant economies, with high-growth industries, many high-wage jobs, and young, educated workers. By contrast, 54 trailing cities and roughly 2,000 rural counties, home to 78 million people, have older and shrinking workforces, higher unemployment, and lower educational attainment. Between these extremes are some thriving niche cities, a larger “mixed middle,” and some manufacturing hubs with modest economic growth; some 94 million people live in these segments.

The economic performance of these segments has been diverging for decades, and that trend accelerated after the Great Recession, even as the economy bounced back at the national level. Just 25 urban areas (megacities and high-growth hubs, plus their peripheries) accounted for more than two-thirds of job growth in the last decade. By contrast, trailing cities have had virtually no job growth for a decade, and the counties of Americana and distressed Americana have 360,000 fewer jobs in 2017 than they did in 2007. These trends have been unfolding at a time when Americans’ geographic mobility has reached an all-time low, with few people moving from distressed areas to thriving cities.

These divergences could get even wider as intelligent machines start to take over more types of work. The jobs that are most susceptible to being automated—in categories such as office support, food service, manufacturing production, and customer service and retail sales—are found everywhere. But local economies are going into this decade with varying momentum. Some will be better able to continue generating new jobs to offset these losses. The same 25 urban areas that led the post-recession recovery could capture 60 percent of national job growth through 2030. Meanwhile, rural counties could see a decade of flat or even negative net job growth. Other segments are positioned for only modest gains.

We also assessed who currently holds the jobs that are likely to shrink over time, looking at age, education level, gender, and ethnicity. Educational attainment is one of the biggest markers of risk: Workers with high school diplomas or less are four times more likely to be in automatable roles than those with bachelor’s degrees or higher. Our team also zeroed in on the fact that automation may eliminate many of the entry-level roles that have traditionally given young workers their first foothold in the working world, while 11.5 million workers over age 50 could be displaced.

Employers will naturally want to maximize what automation technologies can do for productivity and innovation. But to do that, many of them will need to manage complex organizational change, with challenges that will vary depending on the nature, mix, and geographic footprint of their workforces. All employers will need to make adept decisions about strategy, investment, technology, workflow redesign, talent needs and training, and the potential impact on the communities in which they operate. 

The picture our team found is not all dire. Americans need to prepare for the jobs of the future—and many promising workforce initiatives are under way to help them do just that, from companies and nonprofits alike. McKinsey is collaborating on some of these efforts, with the Markle Foundation’s Rework America and its Skillful initiative, the Aspen Institute’s Future of Work Taskforce, the Walmart Foundation, and our own Generation initiative. But a lot more can be done—and it needs to happen on a larger scale, in more places. The priorities will vary in different communities, but the U.S. needs more training programs, better job matching, and more investment in the places that have been left behind.

America can choose the path it wants to take. It’s within our power to create better learning systems and career paths, and to inject new hope into large parts of the country that have been struggling for too long. Rapid technological change isn’t cause for alarm; it’s a call to action. Businesses, policymakers, educators, and other stakeholders will need to join forces and build labor markets that really work for more Americans.