The Generative AI revolution will disrupt America’s biggest labor market, but its impact may not be what you expect.
At a glance
The labor market in the New York region faces several critical challenges. These include too few workers to meet overall demand, stagnating productivity, and yawning inequities across geographic areas and demographic groups. Generative AI (gen AI) provides an opportunity to address aspects of these challenges, while creating some new obstacles.
Overall net employment in the New York region is expected to continue to grow, increasing by about 1.8 percent through the end of the decade. While positive, that is lower than the 4.2 percent net employment growth estimated for the nation during the same period.
The evolving nature of work means the mix of jobs in the New York region will likely change substantially in the next few years. By 2030, as many as 1.1 million occupational shifts may be required in the New York region, and one-third—or approximately 380,000 of these shifts are directly attributable to the impact of gen AI. The technology affects a far broader range of occupations than existing automation technologies do and primarily augments work rather than replacing it.
When factoring in other structural and technological shifts alongside gen AI, the New York region stands to gain up to 700,000 jobs. This gain will be fueled by heightened demand for healthcare and engineering professionals, construction workers, and transportation service personnel. This growth will be partially offset by 600,000 positions that could be affected in office support, customer service, and food service and production, precipitated by accelerated automation and deliberate cost-shifting strategies beyond the region’s boundaries.
Gen AI could help ease the region’s worker shortage, revive productivity growth, push people toward higher-value roles, and unleash creativity. Yet doing so while minimizing the potential negative impact on workers requires the committed and coordinated engagement of public, education, and private sector leaders across
America’s most important economic region.
The greater New York region has a long history of evolving its economy to meet the demands of new markets, technologies, and trends. Hundreds of thousands of New Yorkers change jobs every year to increase their earnings, reach their potential, or adjust to shifting demands for labor1 as neighborhoods like Manhattan’s Far West Side have evolved from oyster reefs to shipbuilding and warehouses to becoming the home of Google and the High Line. For centuries, automation has been a driving force for much of that churn, and today, the latest force for change—broadly described as gen AI—will drive further and faster evolution in the ways of working and the demand for labor.
Gen AI is shifting the New York region’s work landscape and job market. The evolving technology’s advanced natural language capabilities have extended the possibility of increased productivity to a much wider set of job activities, including writing code, designing products, creating marketing content and strategies, streamlining operations, analyzing legal documents, providing customer service via chatbots, and even accelerating scientific discovery.
Our analysis of McKinsey Global Institute research found that even without gen AI, by 2030, ongoing technological advancements could automate as many as 20 percent of total hours worked in the dynamic economic market of the New York region (defined for this article as the New York combined statistical area [CSA] with more than 12 million workers). A comprehensive analysis indicates that the unparalleled capabilities of gen AI have the potential to elevate this figure by an additional nine percentage points, reaching up to 29 percent of total hours worked (Exhibit 1). This transformative influence of gen AI is expected to reshape the fundamental nature of numerous occupations, instigating a shift toward novel roles that will emerge concurrently with the phasing out of traditional positions.
This change—like so many before it—does not mean the region will lose jobs overall, just as the lost jobs of clothing manufacturers in the Garment Center were replaced by media and tech jobs generations later. But gen AI will accelerate a shift in ways of working for hundreds of thousands of workers in different ways and to different degrees. Because the technology’s distinctive capabilities—such as enhanced natural language processing and understanding—can expedite basic, manual, and higher-level cognitive tasks, it will affect the workforce at both ends of the income and skills spectrums.
Activities anchored by decision-making and collaboration, of financial analysts in Wall Street banks to programmers in Union Square tech start-ups, which were barely affected by previous cycles of technological advancement, could see the biggest changes caused by gen AI. We estimate that for workers in these roles, the potential share of hours affected by automation will increase by 27 to 38 percentage points.2 For example, gen AI could automate 56 percent of work hours spent on activities that involve applying expertise, such as planning and designing facilities or conducting audits, compared with 18 percent without.
In contrast, for jobs involving physical activity, whether maintaining vehicles or delivering items, the incremental increase in potentially automated hours of work due to gen AI may be only one to three percentage points (Exhibit 2). Unlike with prior technology shifts, workers with higher levels of education are the most likely to be affected: gen AI may increase the automation potential of tasks by 14 percentage points for people with master’s degrees or higher by 2030, compared with a five-percentage-point increase for those who did not graduate from high school.
Yet while gen AI presents significant challenges, it offers even greater opportunity. Although the technology may accelerate the automation of certain elements of jobs, it could also free workers to undertake tasks that involve applying expertise to decision making and planning or managing and developing people. For example, new associates in Midtown firms could be freed to focus on complex matters of law instead of spending hours repetitively reviewing nearly identical documents. This could create entirely new roles to accommodate an expansion in creative work and encourage workers to harness new skills. And with the committed and coordinated engagement of all stakeholders, the net effect of gen AI could be to ease the New York region’s worker shortage, reverse years of slowing productivity, and unleash worker creativity.
Fuente de nota e imagen: https://www.mckinsey.com/industries/public-sector/our-insights/generative-ai-and-the-future-of-new-york?stcr=0A4A51183BD04DACA23CD3E2E07E087D&cid=other-eml-alt-mip-mck&hlkid=8d9002d1004c4419b518651e5ea22570&hctky=2269170&hdpid=2f607bec-0a05-4335-a27f-6abf3c9e45b7