McKinsey says AI and automation could cut demand for about 36 million U.S. jobs by 2035, while growth elsewhere could create about 41 million.
But the firm says the labor shock will not be evenly distributed. In its base case, about 11 million workers, roughly 7% of the workforce, would need to leave their occupations entirely. The range runs from 6 million to 16 million.
The report says the hardest hit jobs are concentrated in office and administrative support, retail, and transportation. Much of that work is lower-paid. McKinsey says lower-wage workers are 7.6 times as likely as higher-wage workers to need a new occupation.
At the same time, job growth is expected in healthcare, construction, and management. Yet the transition is not simple. Only one in seven displaced workers has a direct path into a growing job, meaning one that needs little retraining and pays at least as much.
Nearly half face what McKinsey calls an 'unpaved' path, blocked by large skill gaps or credential requirements. About 85% of growing jobs require a credential.
Geography is another hurdle. McKinsey found that about 76% of growing jobs cannot be done remotely. That includes work in hospitals, on construction sites, and in data centers.
The report also says the scale of worker movement would be unusually high. About 770,000 people a year would need to switch into a completely different field, roughly 3.6 times the historical average. McKinsey says about 788,000 workers a year made similar moves between 2019 and 2022, during the pandemic, without lasting damage.
Richard Florida, the urbanist and author of The Rise of the Creative Class, said this kind of labor shift has happened before. He pointed to agriculture and manufacturing, where the share of workers fell sharply over time.
Florida said some displaced service workers could move into what he called a broad bucket of wellness work, from fitness and dermatology to Pilates studios. He also said employers are changing what they look for, hiring people who can build the business, work with customers, and work with others.
He said people are already moving for opportunity, including to places with low taxes and stronger economic opportunity. He pointed to Miami and Nashville as examples.
The numbers come first. AI is not just a technology story. It is a labor-market shock with real consequences for wages, mobility, and the taxpayer if Washington decides it needs to cushion every disruption. Capital rewards clear rules and a workforce that can move. Bureaucracy usually rewards delay.
The market has already voted. The question now is whether workers can get from the old economy into the new one fast enough, or whether regulation, credential barriers, and weak mobility turn a productivity gain into a political problem.
