100 million workers in eight largest economies may need to change occupation

 Women, young people, ethnic minorities and less educated workers will be most affected

According to the latest report by consultant firm McKinsey & Company, more than 100 million workers across the world’s top eight economies may be forced to change occupations by 2030 due to the effects of the coronavirus pandemic. 

The COVID-19 crisis has accelerated globally trending changes in the workplace. According to McKinsey & Company 12% workers will be affected in eight largest economies in next 10 years.

This would add up to one in 16 workers having to change jobs in China, France, Germany, India, Japan, Spain, the United Kingdom and the U.S. Together, these eight countries account for almost half the global population and 62 percent of GDP.

The estimated 100 million includes 17 million employees in the U.S., amounting to one out of every 10 workers, as low-wage work in retail and hospitality dwindles.

Women, ethnic minorities, young people and less-educated workers in the U.S. and Europe are now more likely to have to switch jobs than before the pandemic, McKinsey said.

Those who do not have a college degree in the U.S. are 1.3 times more likely than those with degrees to have to change occupations. Black and Hispanic workers in the country are 1.1 times more likely than white workers to enter a new occupation. 

Bloomberg has identified three trends to transform the global workforce. The pandemic “disruption” will speed up this process. More remote work and working from home, more e-commerce for a larger “delivery economy” and more artificial intelligence and robot involvement in the workplace will be the dominating trends.

McKinsey emphasized in its report that the estimates show that about half of those in the lower two wage brackets will need new skills in order to obtain a new job in higher wage brackets. 

“The scale of workforce transitions set off by COVID-19’s influence on labor trends increases the urgency for businesses and policymakers to take steps to support additional training and education programs for workers,” the institute wrote.

The COVID-19 pandemic disrupted labor markets globally during 2020. The short-term consequences were sudden and often severe: Millions of people were furloughed or lost jobs, and others rapidly adjusted to working from home as offices closed. Many other workers were deemed essential and continued to work in hospitals and grocery stores, on garbage trucks and in warehouses, yet under new protocols to reduce the spread of the novel coronavirus.

Two ways businesses historically have controlled cost and mitigated uncertainty during recessions are by adopting automation and redesigning work processes, which reduce the share of jobs involving mainly routine tasks. In global survey of 800 senior executives in July 2020, two-thirds said they were stepping up investment in automation and artificial intelligence (AI) either somewhat or significantly. Production figures for robotics in China exceeded pre pandemic levels by June 2020.

Many companies’ deployed automation and AI in warehouses, grocery stores, call centers, and manufacturing plants to reduce workplace density and cope with surges in demand. The common feature of these automation use cases is their correlation with high scores on physical proximity, and the research finds the work arenas with high levels of human interaction are likely to see the greatest acceleration in adoption of automation and AI.

The trends accelerated by COVID-19 may spur greater changes in the mix of jobs within economies than we estimated before the pandemic.

McKinsey find that a markedly different mix of occupations may emerge after the pandemic across the eight economies. Compared to our pre-COVID-19 estimates, we expect the largest negative impact of the pandemic to fall on workers in food service and customer sales and service roles, as well as less-skilled office support roles.


Jobs in warehousing and transportation may increase as a result of the growth in e-commerce and the delivery economy, but those increases are unlikely to offset the disruption of many low-wage jobs. In the United States, for instance, customer service and food service jobs could fall by 4.3 million, while transportation jobs could grow by nearly 800,000.

Demand for workers in the healthcare and STEM occupations may grow more than before the pandemic, reflecting increased attention to health as populations age and incomes rise as well as the growing need for people who can create, deploy, and maintain new technologies.

Before the pandemic, net job losses were concentrated in middle-wage occupations in manufacturing and some office work, reflecting automation, and low- and high-wage jobs continued to grow. Nearly all low-wage workers who lost jobs could move into other low-wage occupations—for instance, a data entry worker could move into retail or home healthcare. 

Because of the pandemic’s impact on low-wage jobs, we now estimate that almost all growth in labor demand will occur in high-wage jobs. Going forward, more than half of displaced low-wage workers may need to shift to occupations in higher wage brackets and requiring different skills to remain employed.

Given the expected concentration of job growth in high-wage occupations and declines in low-wage occupations, the scale and nature of workforce transitions required in the years ahead will be challenging, according to our research. Across the eight focus countries, more than 100 million workers, or 1 in 16, will need to find a different occupation by 2030 in our post-COVID-19 scenario This is 12 percent more than we estimated before the pandemic, and up to 25 percent more in advanced economies. 

                                                                 Khalid Bhatti 



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