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Forget Robots: Bad Public Policies Could Be Bigger Job Killers

Automation could be a huge boon to the world’s workers—but only if governments and businesses prudently manage the disruption it creates.
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Lauren Weber

Automation could be a huge boon to the world’s workers—but only if governments and businesses prudently manage the disruption it creates.

As many as 375 million workers around the world will need to find new occupations or lose their livelihood to automation by 2030, the McKinsey Global Institute estimates in a new report. It isn’t impossible for up to 14% of the global workforce to retrain and refocus, but it requires planning and the investment of will and resources, says Susan Lund, a principal at the Institute.

“‘Will there be enough jobs?’ is not the right question,” she says. “The question is, what are we going to do to manage the transition for people who do lose their jobs?” The choices that policy makers and business leaders make about how to support displaced workers, invest in education and training, and fund job-creating projects in areas such as infrastructure and energy will all affect the labor market, she says.

If governments and businesses choose wisely, global job displacement could affect as few as 3% of workers, but that depends on how quickly companies adopt automation tools, reconcile regulatory issues, and adjust wage rates for workers, among other factors. Higher wages, for instance, mean companies have more incentive to automate tasks.

The transition for workers creates the potential for social unrest and disruption, McKinsey warns. Countries and companies must take steps—from maintaining economic growth to creating dynamic retraining programs—to help workers transition quickly to new jobs.

While a few places, such as Finland and Ontario, are experimenting with cash grants known as universal basic income, Ms. Lund notes that support for displaced workers can include guidance and career coaching as well as services such as transportation and child care during job interviews.

About 15% of all hours worked globally could be automated by 2030 using technology that is currently available, McKinsey estimates. The new report builds on McKinsey’s earlier research, published in January, which found that 60% of all occupations could be at least partially automated with current tools, though fewer than 5% are at risk of total automation.

Like prior waves of technological change, the adoption of new tools like machine learning and artificial intelligence will likely create more jobs than it destroys, says the Institute, the think-tank arm of consulting firm McKinsey & Co.

The new jobs that emerge may be the indirect result of technology’s contribution to higher productivity and rising incomes, especially in developing countries with expanding middle classes. Higher incomes will lead to more spending on leisure activities, education, health care and other goods and services, resulting in 300 million to 365 million new jobs, the authors estimate.

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More jobs will also be created to help care for aging populations, to develop and maintain future technology, to build new infrastructure and housing, and to staff energy-efficiency initiatives. Also, as more women enter the labor force, families will either pay others to do tasks such as child care or cooking or governments will provide services like universal prekindergarten, leading to more job creation.

Write to Lauren Weber at lauren.weber@wsj.com

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