Current state of industries in the United States
The Bureau of Labor Statistics (BLS) defines ~150 top-level industries in the United States economy, and the below 10 largest industries account for ~80% of the economy.
Industries expected to add the most jobs by 2024 (healthcare expands)
Overall, the United States is expected to add ~43.5 million jobs by 2024. The following 10 industries adding the most jobs are expected to drive >30% of that growth:
Next, these 10 industries are expected to have the largest % growth in jobs, with the highest, outpatient care centers, forecasted to grow by nearly 50% over the next 10 years!
Notice that healthcare dominates the list of high-growth industries; this is primarily due to two reasons:
- The massive ‘baby boomer’ population is beginning to age, driving up the total # of new individuals in need of healthcare
- Americans in general are living longer, meaning that individuals who are already utilizing these healthcare facilities will continue to due so for a longer amount of time. Every year added to life expectancy has a tremendous impact on total demand when there are millions of folks in each cohort of the healthcare population.
Industries expected to lose the most jobs by 2024 (manufacturing contracts)
Topping BLS’ list of shrinking industries in terms of total jobs lost is manufacturing, followed by governmental functions:
When we split the data to show expected % change in # of jobs, apparel/leather manufacturing, tops the list, with an over 45% reduction expected!
(not) Made in America/made with robots 🙂
Notice that the manufacturing industry is expected to contract the hardest in the U.S. by 2024. Overall, manufacturing of all kinds is expected to lose ~1.5MM jobs in the next 10 years, or 6% of its total workforce; the industry currently accounts for ~16% of the total workforce, and after this change it would drop to ~14%. This drop is due to increased automation capabilities and an increase in outsourcing manufacturing outside of the U.S.
Speaking of automation (looking at you, transportation industry)….
While on the topic of automation, I found it interesting that transportation is still expected to add ~255 thousand jobs into 2024, for a total employment of ~7.4 million (nearly 2% of the total working population).
While the true timeline for self-driving cars/trucks/etc. is certainly debatable, it’s tough to argue that this industry won’t eventually face a massive step-change/contraction in labor due to automation. —this is similar to what’s currently going on in pockets of manufacturing, as automation solutions continue to drop in cost, while labor costs continue to increase
The economic impact of a change in this industry could be severe, with the average truck driver earning ~$21/hr, and working ~41 hours/week, that gets us to an annualized salary of ~$44,000, meaning over $62 billion of salary could be impacted (coming from ~123M separate establishments) in the truck transportation industry alone. Extrapolating the truck driver’s salary across the rest of the above transportation industry yields over $325 billion worth of wages that could subject to change in the coming years. For reference, wages in the United States as a whole come in near $14 trillion.
Where will the $325 billion currently being directed towards wages be reallocated, if automation truly does eliminate the need for the majority of these jobs? A number of possibilities:
- For starters, a good deal will be plowed into high-cost upfront investments into the automation technology itself for the first few years
- Second, once efficiency gains are realized and OpEx begins to drive downwards, the value created will move to the shareholders, investors, and employees of the companies both providing and benefiting from the technology
In regards to the employees operating in the transportation sector, it’s of course unclear where they would move to. They could of course re-skill and move to other industries, but many other areas are also ripe for automation, meaning things could get pretty crazy. I’ve listed out a few options below of how things may shake out regarding automation of work:
- Automation doesn’t work as imagined, majority of current jobs are still needed to supervise the tech., not much changes
- Old industries are automated into obsolescence in terms of job prospects, but this opens up the door for new industries/jobs we’ve never ever posited, and employees of impacted sectors shift towards these industries (see cars replacing horses, industrial age, Luddites)
- Automation fully eliminates the need for the vast amount of jobs/work we currently have today, no new jobs or industries are created as a by-product. Some sort of social safety net is put in place (e.g., basic income), our new robot friends perform all of the work, and we humans pursue leisurely activities, creative ventures, or higher-purpose undertakings (interplanetary colonization, immortality, etc)
- Same as option 2, but no social safety net put in place, a ruling class is created, people get pissed and overthrow them, does not end well for folks on top
- Same as option 2, but no social safety net put in place. A ruling class is created where a select few make a ****-ton of money and rest of the world faces low wages and high unemployment
Though the timeline is debatable, it’s clear that automation/technology improvements and outsourcing/globalization have already had a profound impact on the U.S. labor market, and will continue to do so.