According to new research from McKinsey & Co., it will take the United States until 2016 to replace the 7 million jobs that were lost during the 2008-09 recession. And to gain full employment—finding work for the unemployed and accommodating the 15 million Americans expected to enter the labor force this decade—the U.S. economy must create 21 million jobs by 2020.
A return to full employment will occur in only the "most optimistic job growth scenario," according to the McKinsey Global Institute's report, "An economy that works: Job creation and America's future."
"Progress on four dimensions will be essential for reviving the U.S. job creation machine," report authors say. Those dimensions are: developing the U.S. workforces' skill to better match what employers are looking for; expanding U.S. workers' share of global economic growth by attracting foreign investment and spurring exports; reviving the nation's spark by supporting emerging industries, ensuring more of them scale up in the United States, and reviving new business start-ups; and speeding up regulatory decision-making that blocks business expansion and new investment.
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McKinsey analyzed the causes of slow job creation in the period before the recession and during the recovery and the implications of these forces for future job growth. They surveyed 2,000 business leaders as well as more than 100 business executives, public-sector leaders, educators and other experts on U.S. labor markets.
The U.S. workforce will continue to grow until 2020, McKinsey finds, but under current trends, many workers will not have the right skills or education for available jobs. Their analysis suggests a shortage of up to 1.5 million workers with bachelor's degrees (or higher) in 2020. At the same time, nearly 6 million Americans that don't have a high school diploma will likely be without a job.
Technology is changing the nature of work: jobs are being disaggregated into tasks, work is becoming virtual and firms are relying on temporary and contract labor. "These trends offer new opportunities for creating jobs in the United States, a trend that some companies do not fully appreciate," the McKinsey report says. Some 58 percent of employers say they will hire more temporary and part-time workers.
Additionally, six sectors—health care, business services, leisure and hospitality, retail, construction and manufacturing—will be most important for job growth potential. Today, they account for 66 percent of employment, but are projected to account for 85 percent of new jobs created through the end of the decade.
McKinsey came under fire for their recent survey that found 30 percent of employers will likely drop health coverage due to health care reform, causing Democrats to demand methodology and survey questions from McKinsey, which the firm did June 20.
For their job report, McKinsey released a full report.
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