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Apocalypse Now: Pandemic Triggers Automation Surge and Occupation Shift in US Labor Market 

 August 22, 2023

By  Joe Habscheid

Summary: In this era, the US labor market is in a state of constant flux, with immense changes precipitated by the Covid-19 pandemic, technological progress, and shifting industrial demands. As we transition towards higher-wage roles and green industries, workers, especially in lower-wage jobs, face the daunting challenge of occupational shifts, necessitating new skills. However, these changes also bring about an opportunity to build a more inclusive labor market. Therefore, solutions require recalibrating hiring practices, emphasizing skills, and fostering large-scale workforce development.


Pandemic-Induced Occupational Shifts

There was a significant increase in occupational shifts in the US labor market during the Covid-19 pandemic. Approximately 8.6 million people transitioned into new occupations between 2019 and 2022, a 50% surge compared to the previous three years. Most of these shifts resulted from people leaving customer-facing roles in food service, retail, and office support for jobs offering more stability and higher wages.

Growth of Automation and Generative AI

Automation and advancements in Generative AI are spearheading the ongoing occupational shifts. Generative AI, which can extrapolate patterns from large datasets to create new content, will likely push the automation of work activities. However, rather than eradicating jobs, it could enhance the work of professionals in STEM, creative, business, and legal fields. The ripple effects of automation will be most noticeably felt in office support, customer service, and food services, showing a steady decline.

Factors Shaping Future Labor Demand

While automation will shape future labor demand, other factors, like federal investments in climate and infrastructure initiatives, will also play pivotal roles. As the transition to net-zero emissions starts to change labor demand patterns, employment will likely shift from traditional fields like oil, gas, and automotive manufacturing to more sustainable industries. Infrastructure projects mean more demand for construction, already suffering a scarcity of workers. The steadily aging US population is also projected to drive growth in the healthcare sector, while e-commerce propels growth in transportation services.

Challenges for Workers

For workers in lower-wage jobs, the need to switch occupations is up to 14 times more likely compared to high earners. This shift necessitates the acquisition of new skills and requires workforce development on a much larger scale. Employers must shift their hiring focus towards skill sets and potential, moving away from relying only on formal credentials. It becomes a priority to increase the talent pool, including recruiting from forgotten populations such as rural workers and people with disabilities.

Charting a More Inclusive Labor Market

These ongoing transitions in the labor market present an invaluable opportunity to create more inclusive economic growth. Automation and generative AI promises to increase productivity, given that they are complemented with proactive strategies for on-the-job training for nontraditional candidates, skill-oriented hiring practices, and pathways for job mobility. Upgrading documents of learning and employment to digitized versions could help note acquired skills, facilitating smoother occupational shifts.

Conclusion

The tremors of change have undeniably disrupted the US labor market, heralding substantial occupational shifts spurred by advancements in automation and Generative AI. With these changes come definite benefits but also real challenges, particularly for those in lower-wage roles needing to transition to new jobs. Solutions like widespread access to skill-training programs, effective job-matching assistance, and a skill-based shift in hiring practices are vital. When navigating this change, the key is to foster productivity and bring forth inclusive economic growth.


Experts and professionals, especially in Michigan, you are at the forefront of these changes. Your journey is shared by millions across the country who are striving to adapt, learn, and innovate. It’s not an easy path, but the potential rewards – a more inclusive workforce, better job prospects, and a robust economy – are well within our reach. Today, you’re not just workers and job-seekers; you are pioneers in this rapidly evolving landscape of work. Are you ready to embrace this future?


#USLaborMarket #WorkforceReskilling #InclusiveGrowth #Automation #GenerativeAI #GreenIndustries #EconomicShifts #PandemicImpact #OccupationalShifts #MichiganWorkforce

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Joe Habscheid


Joe Habscheid is the founder of midmichiganai.com. A trilingual speaker fluent in Luxemburgese, German, and English, he grew up in Germany near Luxembourg. After obtaining a Master's in Physics in Germany, he moved to the U.S. and built a successful electronics manufacturing office. With an MBA and over 20 years of expertise transforming several small businesses into multi-seven-figure successes, Joe believes in using time wisely. His approach to consulting helps clients increase revenue and execute growth strategies. Joe's writings offer valuable insights into AI, marketing, politics, and general interests.

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