As the debate continues over whether AI will displace large numbers of workers, new research on another long-term trend—a decrease in the U.S. workforce—suggests that AI may be necessary to fill the gap.
Longer-Term Trend: US Workforce Shrinkage
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University of Minnesota professor and demographer Steven Ruggles projects the U.S. labor force will expand by 9.1 million people in the 10 years ending in 2030, the smallest growth since the 10-year period ending in 1960.
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It will decrease by 2.1 million in the 10 years ending in 2040, according to a recent Wall Street Journal article.
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If those projections are correct, the economy will be relying on a smaller number of workers to support a large number of retirees. Ruggles projects wages are likely to rise and more people will enter the labor force, with potential union implications as well.
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Ruggles’ projections are contingent upon current trends staying consistent, including immigration remaining low.
A Mismatch Between Current Skills and Jobs
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Meanwhile, as noted in The Washington Post, the Georgetown University Center on Education and the Workforce projects that skills shortages and population shifts “will hobble the American economy for years to come.” It projects a workforce gap of 4.5 million workers by 2032.
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A root cause of the shortages is a mismatch between the jobs students (both associates and college students) are preparing for and the needs of the marketplace.
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Research from JPMorgan Chase and Lightcast projects shortages from the tens to the hundreds of thousands of jobs. Particularly in roles such as nurses, physicians, teachers, engineers, pharmacists, mental health counselors, construction workers, and airplane mechanics, jobs generally AI can’t do.
The AI Connection
Slower population growth pushes economies toward efficiency gains. Research from economists Daron Acemoglu, David Autor, Keelan Beirne, and Andrew Scott links declining birth rates to higher GDP per working adult and higher wages. Businesses respond to population decline by investing more in labor-saving technology.
This leaves an open question: Will AI-driven productivity gains do the same this time, or even displace more workers? This remains to be seen, but the broader workforce context reframes the typical concerns about AI displacement.
