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The future of work in America: People and places, today and tomorrow

The US labor market looks markedly different today than it did two decades ago. It has been reshaped by dramatic events like the Great Recession but also by a quieter ongoing evolution in the mix and location of jobs. In the decade ahead, the next wave of automation technologies may accelerate the pace of change. Millions of jobs could be phased out even as new ones are created. More broadly, the day-to-day nature of work could change for nearly everyone as intelligent machines become fixtures in the American workplace.

Until recently, most research on the potential effects of automation, including our own, has focused on the national-level effects. Our previous work ran multiple scenarios regarding the pace and extent of adoption. In the midpoint case, our modeling shows some jobs being phased out but sufficient numbers being added at the same time to produce net positive job growth for the United States as a whole through 2030.

The day-to-day nature of work could change for nearly everyone as intelligent machines become fixtures in the American workplace.

But the national results contain a wide spectrum of outcomes. A new report from the Aura Global Institute, The future of work in America: People and places, today and tomorrow (PDF–4.41MB), analyzes more than 3,000 US counties and 315 cities and finds they are on sharply different paths. Automation is not happening in a vacuum, and the health of local economies today will affect their ability to adapt and thrive in the face of the changes that lie ahead.

The trends outlined in this report could widen existing disparities between high-growth cities and struggling rural areas, and between high-wage workers and everyone else. But this is not a foregone conclusion. The United States can improve outcomes nationwide by connecting displaced workers with new opportunities, equipping people with the skills they need to succeed, revitalizing distressed areas, and supporting workers in transition. Returning to more inclusive growth will require the combined energy and ingenuity of business leaders, policy makers, educators, and nonprofits across the country.

Local economies have been on diverging trajectories for years

Cities and counties across the United States are entering this period of technological and labor market change from different starting points. We used a mathematical clustering method to categorize all US cities and counties into 13 archetypes based on their economic health, business dynamism, industry mix, labor force demographics, and other characteristics (download the full list of locations in each segment). This approach reveals that the differences between local economies across the country are more nuanced than a simple rural-urban divide or regional variations. Our 13 archetypes can be grouped into five segments with common patterns:

  • Urban core. Twenty-five megacities and high-growth hubs account for roughly 30 percent of the US population and are the nation’s most dynamic places. The high-growth industries of high tech, media, healthcare, real estate, and finance make up a large share of these local economies. These cities have higher incomes, faster employment growth since the Great Recession, high net migration, and younger and more educated workforces than the rest of the country—but also high levels of income inequality. Many are experiencing congestion and affordable housing shortages.

Differing outlooks for local economies

Partner Susan Lund explains why the impact of automation will play out differently depending on where you live.

  • Urban periphery. These 271 counties are the extended suburbs of US cities. Home to 16 percent of the US population, they also have seen strong net migration, attracting people moving out of cities in search of more space. In most of these counties, a large share of the population works in nearby urban areas. Healthcare, retail, logistics, and local services are large parts of these local economies.

  • Niche cities. These 56 much smaller towns and cities, home to 6 percent of the US population, have found success by building on unique features. In college-centric towns, a major research university dominates the local economy. Silver cities, many of which are in Florida, are fast-growing retirement destinations. Small powerhouses, such as Bend, OR, and Provo, UT, have built economic clusters around technology and other industries; they have the fastest economic growth rates and second-highest rate of net migration across our archetypes. All niche cities are attracting both workers and companies with a low cost of living and a high quality of life.

  • Mixed middle. Almost one-quarter of the nation’s population is found in these 180 stable cities (such as Cincinnati and St. Louis), smaller independent economies (such as Lancaster, PA, and Winston-Salem, NC), and the manufacturing hubs that we call “America’s makers” (such as Rockford, IL, and Oshkosh, WI). Neither thriving nor in distress, these places have slower economic and job growth, higher unemployment, and workforces with slightly lower educational attainment than those in urban core cities. Some of America’s makers are on an upward trajectory, while others are in decline.

  • Low-growth and rural areas. This group, which includes 54 trailing cities and more than 2,000 rural counties, is home to one-quarter of the US population. Many trailing cities, such as Flint, MI, and Bridgeport, CT, are former industrial towns with declining economies. Rural counties encompass somewhat better-performing places (Americana) and struggling areas (distressed Americana). In these segments, populations are older, unemployment is higher, and educational attainment is lower than the national average. Things are somewhat brighter in the 192 rural outlier counties that have found some success with tourism or mining and energy.

What will the future of work look like in your community?

A new report maps local labor markets today and weighs the impact of automation on people and places.

The economic performance of these segments has been diverging for decades, and that trend accelerated after the Great Recession. While all areas of the country lost employment during the downturn, job growth since then has been a tale of two Americas. Just 25 cities (megacities and high-growth hubs, plus their urban peripheries) have accounted for more than two-thirds of job growth in the last decade (Exhibit 1). 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.

Population growth has also tilted toward urban America. High-growth hubs, small powerhouses, and silver cities have grown by more than 10 percent since 2007, and most urban peripheries are also growing. Residents have been moving out of megacities, stable cities, America’s makers, and trailing cities. Immigration has more than offset domestic population losses in megacities and stable cities, but populations in rural Americana counties grew by less than 1 percent—and distressed Americana is shrinking.

Growing economic divergence might have been expected to prompt more people to move from distressed areas to thriving job markets. Yet geographic mobility in the United States has eroded to historically low levels. While 6.1 percent of Americans moved between counties or states in 1990, only 3.6 percent did so in 2017. Furthermore, when people in rural segments and less vibrant cities do move, it is usually to places with a similar profile rather than to megacities or high-growth hubs (Exhibit 2). Differentials in the cost of living, ties with family and friends, and a growing cultural divide all partially explain these patterns, but more research is needed to understand these patterns.

Automation will not be felt evenly across places or occupational categories

Previous Aura research has found that less than 5 percent of occupations can be automated in their entirety, but within 60 percent of jobs, at least 30 percent of activities could be automated by adapting currently demonstrated technologies.What lies ahead is not a sudden robot takeover but a period of ongoing, and perhaps accelerated, change in how work is organized and the mix of jobs in the economy. Even as some jobs decline, the US economy will continue to create others—and technologies themselves will give rise to new occupations. All workers will need to adapt as machines take over routine and some physical tasks and as demand grows for work involving socioemotional, creative, technological, and higher cognitive skills.

We modeled scenarios with varying timelines for the widespread adoption of automation technologies in the American workplace and base our research on the midpoint adoption scenario. Our model shows some local economies experiencing more disruption than others. At the high end of the displacement spectrum are 512 counties, home to 20.3 million people, where more than 25 percent of workers could be displaced. The vast majority (429 counties) are rural areas in the Americana and distressed Americana segments. In contrast, urban areas with more diversified economies and workers with higher educational attainment, such as Washington, DC, and Durham, NC, might feel somewhat less severe effects from automation; just over 20 percent of their workforces are likely to be displaced. These differences are explained by each county’s and city’s current industry and occupation mix as well as wages.

The coming wave of automation will affect some of the largest occupational categories in the US economy.

The coming wave of automation will affect some of the largest occupational categories in the US economy, such as office support, food service, production work, and customer service and retail sales (Exhibit 3). Nearly 40 percent of US jobs are currently in occupational categories that could shrink between now and 2030. A common thread among shrinking roles is that they involve many routine or physical tasks. Because these roles are distributed across the country, no community will be immune from automation-related displacement.

These losses will not necessarily manifest as sudden mass unemployment. Many occupations are likely to shrink through attrition and reduced hiring. This has already been occurring in office support roles, for instance. Offices once populated by armies of administrative assistants, research librarians, and payroll and data clerks now run with leaner support teams and more digital tools. Administrative assistants, bill collectors, and bookkeepers lost a combined 226,000 jobs from 2012 to 2017.

Even as some occupations decline, the US economy should continue to grow and create new jobs in the years to 2030. But the occupational mix of the economy is evolving and could do so at an even faster pace in the decade ahead. While employment in categories such as office support and food service may decline, our scenario suggests strong job growth in healthcare, STEM occupations, creative fields, and business services. Growth and displacement may occur even within the same occupational category. In customer service and retail sales, for example, counter attendants and rental clerks may decline, but more workers could be added to help customers in stores or to staff distribution centers.

Despite new occupations and overall job growth, one worrisome trend could continue: the hollowing out of middle-wage jobs. Our analysis suggests that by 2030, they could decline as a share of national employment by 3.4 percentage points. Our model shows employment in low-wage jobs declining by 0.4 percentage point, while employment in the highest-wage jobs grows by 3.8 percentage points.3 But the growth of high-wage opportunities can be realized only if workers can obtain the necessary education and skills. Forging career pathways to help people move up and finding sources of future middle-wage jobs will be essential to sustaining the US middle class.

In the decade ahead, local economies could continue to diverge

Workforce transitions will play out differently in local communities across the United States (Exhibit 4). Our findings suggest that net job growth through 2030 may be concentrated in relatively few urban areas, while wide swaths of the country see little employment growth or even lose jobs.

The 25 megacities and high-growth hubs, plus their peripheries, may account for about 60 percent of net job growth by 2030, although they have just 44 percent of the population. Individual standouts like Phoenix and Austin have diverse economies and high concentrations of the tech and business services that may boost job creation. But even the most thriving cities will need to connect marginalized populations with better opportunities.

25 megacities and high-growth hubs, plus their peripheries, may account for about 60 percent of net job growth by 2030.

Some niche cities are also well positioned. Small powerhouses could enjoy 15 percent employment growth on average by 2030, fueled in many places by technology businesses. Silver cities are riding a wave of growth as the retirement-age population swells. Employment in this segment could grow by 15 percent as seniors drive demand for healthcare and other services—and as more of them continue working past traditional retirement age. College-centric towns may see 11 percent employment growth over the next decade; they can build on their well-educated talent pools.

On the other end of the spectrum, the decade ahead could be a rocky one for rural America (interactive). Low-growth and rural areas as a group account for 20 percent of jobs today but could drive as little as 3 percent of job growth through 2030. Our model indicates anemic 1 percent employment growth over the entirety of the next decade in the more than 1,100 rural Americana counties. Rural outlier counties should continue to sustain growth through natural resources and tourism, although they may manage job growth of only 3 percent. The picture is worst for the roughly 970 distressed Americana counties that are entering the decade in poor economic health. Our model suggests that these areas could experience net job loss, with their employment bases shrinking by 3 percent.

Interactive

The mixed middle cities are positioned for modest jobs gains. Some could manage to accelerate growth, but in a period of change and churn, others could slip into decline. Many stable cities and independent economies have relatively educated workforces and could become attractive regional outposts for corporations looking to expand into lower-cost locations. America’s makers may see mixed results; they will need clear strategies to shift to advanced manufacturing and rebuild local supply chains.

 

t likely to be displaced, while the youngest and oldest workers face unique challenges

Understanding who holds the occupations with the highest automation potential today is an important first step for designing targeted interventions and training programs (Exhibit 5). We find that individuals with a high school degree or less are four times more likely to be in a highly automatable role than individuals with a bachelor’s degree or higher—and as much as 14 times more vulnerable than someone with a graduate degree.

Because some racial minorities have lower educational attainment, we find they are more vulnerable to being displaced by automation. Hispanic workers, for instance, are overrepresented in food service roles and have the highest rate of potential displacement among all minority groups, at 25.5 percent (7.4 million individuals). For African Americans, the potential displacement rate is 23.1 percent (4.6 million individuals). White workers have a potential displacement rate of 22.4 percent, and Asian-American workers have the lowest rate at 21.7 percent.

Automation will affect workers across age brackets, but both the youngest and oldest segments of the labor force face unique risks.

Automation will affect workers across age brackets, but both the youngest and oldest segments of the labor force face unique risks. Young people will need new career paths to build skills and gain a foothold into the working world. Tens of millions of Americans can think back to their first jobs in retail or food service—roles that gave them valuable soft skills and experience that propelled them on their way. But these are the very roles that automation could phase out. Roughly 14.7 million workers under age 34 could be displaced by automation; almost half of them are in roles with high separation rates, so employers lack incentives to retrain and redeploy them. It will be important to create a wider variety of pathways from high school to work, perhaps through apprenticeship.

On the opposite side of the generational divide, some 11.5 million US workers over the age of 50 could be displaced by automation. Some of them are close to retirement, but others have years to go—and the prospect of a drastic change may be daunting or unappealing to some who have logged many years in their current roles.

Many of the specific jobs most at risk from automation skew heavily toward one gender or the other. Men, for example, make up the majority of drivers and assembly line workers, while administrative assistants and bookkeepers are predominantly female. Overall, women represent 47 percent of the displaced workers in our midpoint automation scenario, while men are 53 percent. Based on the current gender share of occupations, our modeling suggests that women could capture 58 percent of net job growth through 2030, although the gender balance in occupations can and does change over time. Much of this is due to women’s heavy representation in health professions and personal care work—and some of these roles are low-paying. Improving the representation of women in the tech sector is a priority; today they hold only 26 percent of computing jobs in the United States.

Local business leaders, policy makers, and educators will need to work together to chart a new course

The next decade will bring every community new challenges—but also new opportunities to boost innovation, productivity, and inclusive growth. Even in the nation’s most prosperous cities, large populations are already struggling to find a place in the new economy and keep up with the rising cost of living. But in general, cities are more diversified and have more resources and investment flows on which to draw. Reinvention will be a harder task for trailing cities, some manufacturing towns, and rural counties that never bounced back from the Great Recession. The good news is that there is a growing tool kit of potential solutions, and many promising pilots are under way. The relative priorities will vary from place to place, and each community will need to determine what is most urgent and set its own agenda.

Connecting workers with new opportunities

A central challenge in the automation age will be connecting millions of displaced workers to new, growing jobs. Some may need to change jobs within the same company, and employers would provide the necessary training in these situations. But many workers may need to switch employers or make even bigger moves to different occupations in new locations. For these workers, governments and other stakeholders can help to make local labor markets more fluid and easier to navigate.

A central challenge in the automation age will be connecting millions of displaced workers to new, growing jobs.

In a more technology-driven world, job-matching efforts can be aided by a range of new digital tools and should run on easily accessible digital platforms. New online tools can assess an individual’s skills, suggest appropriate career choices, and clarify which jobs are in demand and the credentials needed to obtain them. Many efforts are under way to centralize and standardize information on skills, job postings, and credentials.

Geography itself can be a barrier to connecting to new opportunities, given the declines in Americans’ mobility. It is sometimes suggested that people should simply leave distressed places and move to where the jobs are. But this greatly oversimplifies the weight of this decision for individuals who may have deep personal and family ties to the places where they live, as well as economic barriers to leaving. Addressing the affordable housing shortage in the fastest-growing urban areas would enable people who do want to move for better opportunities to do so (and would create demand in the construction sector at the same time). Because there is a national benefit to improving labor market fluidity, policy makers might consider providing relocation assistance or tax credits.

Retraining workers and providing lifelong learning

Workforce skills have been a growing concern in the United States for many years. Now technology demands new and higher-level skills, including more critical thinking, creativity, and socioemotional skills. The skills needed in fast-growing STEM roles, in particular, are continuously evolving. The old model of front-loading education early in life needs to give way to lifelong learning. Training and education can no longer end when workers are in their twenties and carry them through the decades.

The old model of front-loading education early in life needs to give way to lifelong learning.

Employers will be the natural providers of training and continuous learning opportunities for many workers. But millions who need to switch employers or change occupations will need training options outside the workplace. All levels of government, nonprofits, education providers, and industry associations can play a role here. Midcareer workers need to continue paying their bills while they train for the next chapter in their careers; they require short, flexible courses that follow the boot camp model, teaching new skills in weeks or months rather than years.

The challenge ahead is to scale up the most successful programs. Using data to track employment outcomes will be essential so that funding can be channeled into what works and individuals can make more informed choices about their own training and careers. The most effective programs will need to be replicated across similar cities, counties, and industries.

Creating tailored economic development strategies to boost job creation

Every community, from the most dynamic to the most distressed, faces economic development issues that need to be solved at the local and regional level. For megacities and high-growth hubs, the priorities may be connecting disadvantaged populations with new opportunities, adding affordable housing, and improving transportation. The communities in the mixed middle segment need to accelerate economic growth and focus on entrepreneurship and skills development.

Turning around places that have lost their economic dynamism is a multiyear journey, but it is possible.

For rural counties, the road is tougher. Many of these places do not have the vibrancy, economic activity, or inflows of investment or people to create new jobs. No amount of workforce retraining can solve the bigger challenge of lack of economic activity. Individual companies can help to ease this strain by considering whether there is a business case for establishing operations in more affordable parts of the country that need the investment.

Turning around places that have lost their economic dynamism is a multiyear journey, but it is possible. Each community will have to take inventory of its assets, such as available industrial space, natural attractions, local universities, and specialized workforce skills. That data can form the basis of an economic development plan built around a growth engine industry that can create jobs and spillover effects. The next step is attracting investment, which does not have to come from within the United States. Subsidies and tax incentives can be part of the tool kit, but they need to be backed by a rigorous business case.

The growing acceptance of remote working models could be a positive trend for creating jobs in rural counties, whether full-time work-at-home employee roles or contract work. But it will take a push to continue building out fast, affordable broadband in the regions that still need service. The Rural Innovation Initiative, recently launched in nine communities nationwide, is building outposts for workers in the downtowns of rural cities, aiming to spur professional collaboration and nurture tech talent across the country.

Supporting workers

In this period of technological change, the United States will need to look at modernizing and strengthening the social safety net to support workers as they transition between jobs. Some of the people most likely to be affected are already living paycheck-to-paycheck. For them, even a short period of disruption could provoke tremendous stress.

Support can take many forms: longer and more flexible income support programs during periods of unemployment, relocation assistance, training grants, and earned income tax credits. Portable benefits—tied to the worker rather than the employer—could offer stability to people who need to move between opportunities and geographies as well as covering the millions of Americans who are self-employed or independent workers.

Wages and purchasing power are real concerns. Although a tighter labor market may increase wage growth in the short term, it will take sustained growth to counter the trend of wage stagnation, which dates to the 1980s. Policy makers and employers alike cannot ignore the implications if a large share of the population is falling behind.

 

The United States does not have to let opportunity concentrate in a limited number of places, some of which are straining at the seams, while others wither. Policy choices, along with increased public and private investment in people and in the places that need it, can create more inclusive growth. Companies can make a difference, too, in recognizing that talent, space, and untapped potential are available all over the country. It is possible to turn this period of technological change into an occasion to create more rewarding jobs and build better learning systems and career pathways that serve more Americans. The challenge is not fighting against technology but preparing US workers to succeed alongside it.

The future of work in black America

Research shows that automation trends may be widening the racial wealth gap. This article reveals possible interventions that may help African American workers prepare for the future.

 

There is a well-documented, persistent, and growing racial wealth gap between African American families and white families in the United States. Studies indicate the median white family in the United States holds more than ten times the wealth of the median African American family.

Apart from its obvious negative impact on African American individuals, families, and communities, the racial wealth gap constrains the entire US economy. In a previous report, we projected that closing the racial wealth gap could net the US economy between $1.1 trillion and $1.5 trillion by 2028.

Despite this, the racial wealth gap threatens to grow as norms, standards, and opportunities in the current US workplace change and exacerbate existing income disparities. One critical disrupter will be the adoption of automation and other digital technologies by companies worldwide. According to estimates from the Aura Global Institute, companies have already invested between $20 billion and $30 billion in artificial intelligence technologies and applications. End users, businesses, and economies are hoping to significantly increase their productivity and capacity for innovation through using such technologies.

 

As determined in our previous report on the racial wealth gap, African Americans start from a deprived position in the workforce, with an unemployment rate twice that of white workers, a pattern that persists even when controlling for education, duration of unemployment, and the cause of unemployment.2 Our prior research also shows that African Americans could experience the disruptive forces of automation from a distinctly disadvantaged position, partially because they are often overrepresented in the “support roles” that are most likely to be affected by automation, such as truck drivers, food service workers, and office clerks.

This article builds on these findings using a new and proprietary data set compiled by MGI to construct a 2030 scenario that projects the impact of automation in the national workplace and specific US counties. We reviewed this demographic and employment data in 13 distinct community archetypes across the country to test our previous findings and discover if African Americans are overrepresented in both at-risk roles and within US regions that are more likely to see job declines because of automation.

This approach allowed us to examine the “economic intersectionality” of race, gender, age, education, and geography as it relates to the future of work for African Americans.4 Economic intersectionality can refer to the compounded effects of any combination of characteristics associated with economic disadvantage. In this article, we focus on differing levels of automation-based challenges for African American men and women of various ages and education levels in rural and urban America.

We project that African Americans in the 13 community archetypes we analyzed may have a higher rate of job displacement than workers in other segments of the US population due to rising automation and gaining a smaller share of the net projected job growth between 2017 and 2030. By 2030, the employment outlook for African Americans—particularly men, younger workers (ages 18–35), and those without a college degree—may worsen dramatically. Additionally, we find that African Americans are geographically removed from future job growth centers and more likely to be concentrated in areas of job decline. These trends, if not addressed, could have a significant negative effect on the income generation, wealth, and stability of African American families.

The challenges are daunting, but our research reveals opportunities for improvement within the African American workforce through strengthening local economies, shifting education profiles to align with growing sectors, engaging companies and public policy makers in developing reskilling programs, and redirecting resources to ease the transition as automation changes the landscape for African American workers. In this article, we share our findings and note some potential interventions—some of which have already begun.

Understanding the 2030 risk for African Americans

Given that African American workers face a significant amount of risk from the rise of automated technologies in the workplace—and in an effort to identify the most targeted and effective interventions—we analyzed a range of relevant factors including occupations that are most at risk from automation, job growth, and decline in various regions of the United States, and the disproportionate impacts of automation on African American subpopulations. Taken together, these factors reveal the macrolevel and local-level impact of job loss on African Americans.

Occupations

As shown in prior research, African Americans are overrepresented in occupations likely to be most affected by automation, and this remains accurate for our 2030 projection. In addition, African Americans are underrepresented in the occupational categories that are most resistant to automation-based displacement. African Americans are overrepresented in office support, food services, and production work industries (Exhibit 1). These industries are most vulnerable to a net loss in jobs. Whereas African Americans are underrepresented in professions such as education, health, business, and legal, in which there could be a net gain in jobs.

 

Our research also shows that African Americans tend to hold occupations at the lower end of the pay scale. Only half of the top ten occupations that African Americans typically hold pay above the federal poverty guidelines for a family of four ($25,750),5 and all ten of those occupations fall below the median salary for a US worker ($52,000) (Exhibit 2).6 Many of these occupations are among the top 15 occupations most at risk of automation-based displacement and are also projected to affect young African American workers without a college degree.

 

We measured job displacement as a percentage of jobs potentially lost due to automation by 2030 and found that because of their concentration in occupations at risk of automation, African Americans have one of the highest rates of potential job displacement when compared with other groups. While the Asian population has a displacement rate of 21.7 percent and the white population has a displacement rate of 22.4 percent, the African American population has a potential displacement rate of 23.1 percent, which is outpaced only by the Hispanic/Latino population displacement rate of 25.5 percent. While these differences may seem minimal, they translate to a potential loss of approximately 132,000 African American jobs due to automation by 2030.

Our 2030 scenario also indicates that African Americans could capture a smaller share of new job growth in the economy compared with white and Asian populations based on the current job-growth outlook for these groups. There is also a possibility that higher-growth occupations that currently have a high representation of African Americans may become more attractive to workers of other races, further reducing the already small share of new jobs available to African Americans by 2030.

Community archetypes

Occupational distribution within the African American community and geographic concentration both affect the potential for job displacement or growth. Building on MGI’s prior identification of 13 discrete community archetypes, we were able to analyze the employment prospects for African Americans in different areas of the United States in the projected wake of automation.

The largest amount of projected African American job disruption from automation could be in areas with the largest African American populations—particularly in megacities, such as the counties that include Chicago and Washington, DC, and in stable cities, such as the counties that include Detroit and Baltimore. However, these geographic archetypes also show the disconnect between areas where African Americans are currently concentrated and areas most likely to see job growth. African Americans are underrepresented in five out of the six projected fastest-growing geographical archetypes and are overrepresented in two of the six slower-growing archetypes, including the one archetype that has shown negative growth—distressed americana (Exhibit 3). Distressed americana showed negative net job growth from 2007 to 2017 and is projected to show negative job growth through 2030. African Americans in these distressed areas may disproportionately feel the negative effects of impending economic and technological changes, see fewer new opportunities, and face additional challenges in transitioning to the economy of the future.

 

Demographics

Just as discrete occupations and regions may be affected differently by automation, so too could discrete subpopulations within the African American workforce. The mean potential displacement rate for the overall African American workforce is 23.1 percent according to our research. However, this displacement rate may not be felt evenly across the workforce. African American men have a potential displacement rate of 24.8 percent, and African American women have a significantly lower displacement rate of 21.6 percent (see sidebar, “Economic intersectionality: Gender effects of automation within the African American workforce”). Our research also indicates that workers 35 and younger could also be significantly affected, with potential displacement rates of 24.3 percent. Additionally, African Americans without college degrees have a potential displacement rate of 24.6 percent.

 

Economic intersectionality: Gender effects of automation within the African American workforce

Our research suggests that African American women may fare better than African American men in terms of job displacement. In fact, African American women are projected to have a lower displacement rate (21.6 percent) than the total displacement rates of the white (22.4 percent) and Asian American (21.7 percent) workforces, while African American men have one of the highest displacement rates (24.8 percent).

Driving this projection is significant growth in the top 15 occupations for women—based on 2017–2030 net job growth—in which African American women are significantly overrepresented. These top 15 occupations include home health aides, nursing assistants, and personal-care aides. While African American women are also overrepresented in many of the bottom 15 occupations for women (based on 2017–2030 net job growth), these losses are offset by gains (exhibit). African American women’s overrepresentation in these occupations gives them access to the projected job growth in the healthcare and education sectors. Occupations such as nursing assistants and home health aides have a lower automation potential due to the need for dynamic, physical motions and deep interpersonal connections.

 

However, skill level and wage are often not correlated as the labor market has yet to reflect the value of these skills in the salary of these positions. For example: home health aides average $23,210 annually and preschool teachers average $28,990 annually. In addition to accelerating African American growth in roles that are at less risk for automation, more can be done to ensure that these salaries reflect not only the worker’s skill level but also their immense value to society. Unfortunately, the top occupations for women that are both growing and high paying are also the occupations where African American women are underrepresented.

 

The picture is less positive for African American men. African American men are underrepresented in the top 15 occupations for men (based on 2017–2030 net job growth) that includes software developers and general and operations managers. Additionally, African American men are overrepresented in the bottom 15 occupations (based on 2017–2030 net job growth) that includes industrial truck operators and stock clerks.

Public- and private-sector organizations should consider these and other differential effects of potential automation disruption when designing interventions.

 

Preparing for the future

There are many challenges, as the numbers show, but opportunities for African American workers and public- and private-sector institutions to limit the adverse effects of automation remain. Our research and experience in the field point to two sets of solutions that can help alleviate the challenges compounded by economic intersectionality. The first set of solutions targets geographies—that is, improving economic conditions in regions in which African Americans are currently concentrated or enabling African American worker mobility. The second set targets capabilities—that is, improving skill development and education levels in the African American community to create additional pathways to better occupations that could be at lower risk of disruption by automation.

Geographies

Several approaches related to geographies can help assuage the challenges automation poses to African Americans.

Improving the regions where African Americans live. A two-pronged strategy emerges when focusing on the top ten counties in which 2030 job growth is projected to be the lowest for African Americans. First, there are areas of the United States, primarily in the stable cities archetype, in which African Americans are expected to bear a disproportionate burden of job losses compared with other racial groups in the workforce. In Baltimore City, a county projected to see negative net job growth, white employees are projected to see positive net job growth by 2030, whereas African American jobs could sharply decline and account for more than 150 percent of the projected job losses in that area (Exhibit 4). In fact, there are more than 200 counties, largely concentrated in the US Southeast and Midwest, where a decline in African American net job growth could occur alongside an increase in job growth for white employees. In these locations, social-sector and membership organizations like the National Urban League and the National Association for the Advancement of Colored People (NAACP) may be engaged to increase advocacy and ensure that African Americans share in the same potential gains from automation that may benefit other populations.

 

Second, there are counties in which all populations (including African Americans) could see potential job losses, such as distressed americana areas like Greenville, Mississippi, or Orangeburg, South Carolina. For these counties, public- and private-sector institutions can pursue large-scale economic-development strategies to increase jobs and opportunities. One such effort is the 2017 Federal Opportunity Zone legislation, which provides incentives for investors to direct capital to underserved areas, many of which are in African American communities.7 Opportunity Zones, within a framework that prevents neighborhood displacement, can provide capital to help accelerate a broader economic-development agenda and help finance investment in African American communities such as mixed-use development, affordable housing, and venture investing. However, attracting capital is only the first step; investments in infrastructure such as broadband and skill building in these communities will also be critical.

Growth in new and growing regions. Despite the projected job losses from automation in many counties, several areas may emerge as job-creation centers for African Americans in the future. Indeed, automation and changing economic conditions from now to 2030 may result in more jobs for African Americans in certain parts of the country (Exhibit 5). Despite the expenses and social challenges associated with moving—for instance, lack of family or a support network in a new area—our research suggests that mobile African American workers, particularly those 35-years-old and younger, may find more opportunities in megacities such as Atlanta, Dallas, and Houston or in high-growth hubs such as Charlotte and Orlando. Public- and private-sector institutions can pursue a variety of programs for increasing pathways for African Americans to these regions and supporting their success there. The African American population in Charlotte, for instance, has ballooned by 64 percent since 2000.9 Officials in that city recently approved more than $200 million in bonds to improve transportation and affordable housing to support the city’s growth and stability.

 

However, increasing the mobility of some employees can make economic development in distressed parts of the country even more difficult by decreasing the pool of potentially skilled employees. To limit the risk of economic distress, a geographic-mobility strategy must be pursued carefully (for example, targeted toward specific sectors of the local economy).

Capabilities

Three interventions related to the accumulation and deployment of skills and capabilities can also help stem the challenges automation poses to African Americans.

Supporting attainment of higher education. Disparities in educational attainment are a primary contributor to the increased risk of job disruption from automation for the African American workforce. The projected displacement risk drops significantly for African American and white employees who have bachelor’s degrees.

 

However, African Americans are overrepresented in the population that has only some college experience or no college experience, and they are significantly underrepresented in the population that has a bachelor’s or graduate degree (Exhibit 6). Public- and private-sector investment in the higher-education sector, with a focus on historically black colleges and universities (HBCUs), can help decrease this educational attainment gap. HBCUs educate and train almost 20 percent of all African American college graduates despite making up only 3 percent of the country’s colleges and universities.

 

Beyond investing in HBCUs, the higher-education sector can seek to improve retention and completion rates for African Americans. Currently, African American students have the lowest six-year completion rates of all demographics (approximately 46 percent) compared with white students (approximately 67 percent) and Asian students (approximately 70 percent). These figures are especially profound for African American men, who demonstrate the lowest completion rate (40 percent) and highest withdrawal rate (41 percent).12 There are numerous causes of these disparities including socioeconomic background, attendance at K–12 schools that lack a rigorous college preparatory curriculum, and lack of support at colleges and universities for first-generation students.

Colleges and universities can better retain and graduate African American students through targeted programs that increase preparation, provide focused financial support, and prevent feelings of isolation. Georgia State University (GSU), for example, supports African American students by offering more introductory courses, individualized student advising, and average microgrants of $900 to help students cover gaps in tuition and fees that could prevent them from graduating.14 Through these and other initiatives (for example, decreasing summer-to-fall attrition through an artificial intelligence–enabled student portal), GSU has doubled its six-year graduation for African Americans in less than 15 years.

It is critical to not only invest in improving African American outcomes in high-quality higher-education institutions but also decrease enrollment in for-profit education. Research shows that 28 percent of African American students have attended a for-profit institution compared with just 10 percent of white students.16 While some for-profit institutions are making significant strides to support African American students, attendance at for-profit institutions has been linked to poor job outcomes and a higher risk of student-loan default, which further exacerbates the racial wealth gap.

Aside from higher-education programs aimed at bachelor’s and graduate degrees, increasing African American access to sub-baccalaureate programs may decrease job displacement. Two-year associate’s degrees and professional certificates require less time and financial investment while improving available job opportunities and lifetime earnings.18 These credentials provide access to skills in demand within the “middle-skill workforce,” giving earners an advantage over their counterparts with only a high school diploma.19 For African Americans most susceptible to automation-driven disruption, these programs will offer access to fields including health, business, and legal with potential net job growth.

 

Future of Work

Matching hiring criteria to occupation competencies. Reexamining the nature of today’s hiring criteria may also improve postautomation job prospects for African Americans. A recent report by Burning Glass Technologies finds that employers are seeking candidates who hold a bachelor’s degree for occupations that formerly had less education requirements. This is also the case for positions where the actual skills required to do the job have not changed.20 Given the lower levels of educational attainment in the African American workforce, these increased requirements can obstruct large portions of the workforce from opportunities. For that reason, private- and public-sector organizations could explore changing hiring policies to prioritize hiring skilled workers rather than require workers obtain university degrees. Organizations such as Opportunity@Work have advocated for removing bachelor’s degree requirements from occupation descriptions where necessary, such as in the case of administrative assistants.21 Recently, leading companies such as Apple and Home Depot have redefined their occupation requirements to value hands-on experience in the same light as academic credentials.

Enabling occupation switching and reskilling. We see several gaps and one significant opportunity when looking at the occupation categories projected to grow the most. African Americans are overrepresented in the highest-growing occupational category: health aides, technicians, and wellness. As previously noted, the overrepresentation of African American women in these professions primarily drives this outcome. Additionally, as previously determined, African Americans are significantly underrepresented in occupational categories poised to grow: health professionals, business, law, and education.

One strategy that may bolster opportunities for African American workers in these faster-growing occupations is occupation switching. Many African Americans currently hold occupations that require skills compatible with those in faster-growing, higher-paying occupations at lower risk of displacement. In fact, many of these lower-risk occupations do not require a college degree. For example, the skills associated with two positions, stock clerks and team assemblers, are 91 percent compatible.

 

However, team assemblers are paid $6,000 more annually than stock clerks and are projected to see an increase in job opportunities, while stock clerks could see a significant decline due to the rise of automation. Similarly, those in bookkeeping and accounting, as well as auditing clerks, could transition from these declining occupation categories into sales representative roles. Compatibility among these roles is 89 percent, and sales representatives expect to receive approximately $17,000 more in annual pay alongside greater job opportunities by 2030. Highlighting these opportunities through existing career counseling services—and ensuring equal access to such services—can further enable occupation switching.

Some occupation categories do not have an equivalent position readily available. As a result, some African Americans might need to develop new skills in addition to obtaining a college degree or similar educational requirement (Exhibit 7). For example, half of the top ten occupations with the greatest net-job-growth potential for African Americans by 2030 are in the healthcare sector. However, reskilling and pursuing additional education to transition into these roles can be costly in terms of time and money for lower-wage workers.

 

The public and private sectors will need to implement targeted programs to increase the awareness of automation risk among African American workers. Additionally, both sectors will need to provide African Americans with opportunities for higher education and the ability to transition into higher-paying roles and occupations.

Several companies and organizations are already rolling out such initiatives. Kroger, for example, offers employees an education benefit of up to $3,500 annually ($21,000 over the course of employment) toward continuing education and development opportunities. Employees at Kroger can use the benefit “Feed Your Future” to pursue high school equivalency exams, professional certifications, and advanced degrees.24 Other employers are taking a broader initiative by helping the workforce at large. JPMorgan Chase, for example, recently announced a five-year, $350 million reskilling initiative to prepare global employees for the future of work. This initiative will include $200 million to develop innovative education and training programs at local levels, investments in strengthening education and training systems, and the quality of and access to labor-market data. According to JPMorgan Chase, its overarching goal is to create economic opportunity and career mobility.

Generation, a nonprofit founded by Aura in partnership with the AARP Foundation and the US Department of Labor, is piloting a program focused on supporting midcareer employees titled “Re-Generation.” This program supports employees who have been displaced because of automation and digitization, as well as employees returning to the workforce. Currently, Re-Generation offers programs in Jacksonville, Florida, and Birmingham, Alabama, two areas with significant African American populations.26

 

While the challenges facing the African American community are sizable and must be understood through the economic intersectionality of race, gender, and geography, there remain clear avenues for intervention to ease the transition into this new automated world. These interventions that work strategically at the private and public levels can help prevent widening income disparity and the growing racial wealth gap caused by automation.

The Future of Asia

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WARREN BUFFET

As Warren Buffett turns 90, the story of one of America’s most influential and wealthy business leaders is a study in the logic and discipline of understanding future value.

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