The voices of Urban Institute's researchers and staff
September 28, 2018

How is technological advancement changing the labor market?

September 28, 2018

The Urban Institute will cohost the Reimagine Communities Symposium in Plano, Texas, on October 3, 2018. In a series of posts this month, we’ll explore the theme of the conference: how we can harness technology to create more inclusive communities and create pathways to economic opportunity.


“The robots are coming.” “No jobs are safe.” “The way we work is coming to an end.”

These fears around automation and technology’s impact on jobs continue to grow as innovations have the potential to change the employment landscape. Although millions of jobs could be lost as a result of new technologies, millions of jobs will also be created (it’s still unclear whether there will be enough new jobs).

Concerns about robots, automation, and artificial intelligence (AI) miss that the advent of technology is more likely to change jobs, not eliminate them. In manufacturing, companies are experimenting with having floor and line workers use mechanical exoskeletons to reduce strain and fatigue when lifting heavy objects. And in sales, representatives will need to become more capable with online marketing and engagement to adapt to customer preferences.

Technology is changing the way we work, but concerns about which jobs are lost and which are gained—and who those changes affect—are important in considering whether people will have the opportunity to shift from working in the jobs of yesterday to the jobs of tomorrow.

Which jobs are poised for growth, and which face declining demand?

The evidence is clear that technological change has reduced the need for routine mechanized work and increased both the demand and pay for high-skilled technical and analytic work.

The impact of automation and artificial intelligence is an acceleration of a trend decades in the making. Switchboard operators have recently been replaced by phone and interactive voice response menus, and many grocery store clerks have been replaced with self-checkout machines. With advances in AI, reports claim that truck drivers, paralegals, and even surgeons might see their occupations upended by changing technology.

In this environment, tech jobs could seem like the only occupations with guaranteed job growth. But they’re not the only ones. Although there is a growing need for developers and data scientists, jobs in personal care and the medical industry are expanding even faster.

selection of fastest growing and declining occupations

The need for more home health aides—as well as growth in other health-related occupations—is driven largely by the aging baby boomer population entering retirement and by technological advances that increase the effectiveness of care.

Research has shown that the need for basic data processing skills and manual labor will decline over the next decade, while cognitive, social, and emotional skills will be more in demand. These skills—such as solving complex problems, working in teams, giving advice, and demonstrating leadership—facilitate more human interaction. Many growing health- and service-related jobs require skills that robots and automation can’t replace.

How these changes could affect income, gender, and racial and ethnic disparities

An important difference between the jobs being lost and the ones being gained is the difference in pay. Many of the lost jobs are middle-skill occupations that pay middle-class wages (the 2017 median annual wage was $37,690). The tech-related jobs replacing those positions are much higher paying, while such jobs as home health aide and personal care aide pay less.

Many workers in the occupations that are losing jobs do not have the skills to easily move into those higher-paying jobs. Jobs like information security analysts and software developers require at least a bachelor’s degree, and most statistician jobs require a master’s degree. Few of the fastest-declining occupations require anything higher an associate’s degree.

The difference between declining jobs and growing ones also affects racial or ethnic and gender equity. Women make up nearly 90 percent of word processors and typists—the job that will see the biggest decline over the next decade. Women of color are overrepresented in this occupation, with black and Latino workers holding 40 percent of these jobs.

Growing occupations at the higher end of the pay scale tend to employ more men and fewer people of color. Men fill 80 percent of both information security analysts and app developer jobs, while people of color make up 20 percent and 12 percent of those occupations, respectively.

And in growing occupations that pay less (home health aides and medical assistants), women fill 90 percent of jobs, and people of color make up more than 40 percent of medical assistants and 50 percent of home health aides.

The skills and education needed for future high-paying jobs continue to increase, while jobs like home health aides require less education, pay less, and provide fewer opportunities for career advancement. Given persisting racial and ethnic gaps in educational attainment, these differences could lock many people of color out of the opportunity provided by technological advances in the labor market.

Ensuring technology’s effect on work benefits everyone

Technological advancements are changing the way we work, reducing the need for some occupations and expanding the need for others. Jobs that aren’t experiencing rapid change in growth are still seeing rapid change in technological adoption, which requires workers in those fields to learn new skills.

Along with these changes could come advances in productivity, creating high-paying, high-quality employment for people in the position to take advantage of the growth of these good jobs. But there is also a risk, especially among those without advanced degrees, that people will lose jobs paying middle-class wages and get locked out of better jobs.

Efforts to make these changes are under way. Communities are collaborating within their local workforce systems to create reskilling programs targeted to the needs of local employers, and expanding apprenticeship programs have been shown to create employment opportunities for women. National nonprofits such as Opportunity@Work and Code2040 have developed workforce development and training programs targeted to people of color and others underrepresented among the high-paying, fast-growing jobs.

Although these efforts are promising, employers, employees, educators, and policymakers need to ensure that more people can pursue these opportunities and to ensure that technology improves the way we all work.

Capital One, a funder of the Urban Institute and cohost of the Reimagine Communities Symposium, provided support for this work.

Photo by Hero Images/Getty Images.

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