AI Could Replace 11.7% of U.S. Workforce, says MIT and ORNL Study

Artificial intelligence (AI) has advanced to a point where it could feasibly replace 11.7% of the U.S. workforce, equating to approximately $1.2 trillion in wages, according to a recent study by the Massachusetts Institute of Technology (MIT) and Oak Ridge National Laboratory (ORNL). The research highlights AI's potential to automate tasks across various sectors, including finance, healthcare, and professional services.

The study utilized the "Iceberg Index," a labor simulation tool developed jointly by MIT and ORNL. This tool creates a digital twin of the U.S. labor market, simulating 151 million workers as individual agents, each with specific skills, occupations, and locations. It tracks more than 32,000 skills across 923 job types in 3,000 counties and maps them against current AI capabilities. Prasanna Balaprakash, a director at ORNL and co-leader of the study, explained, "We're effectively creating a digital twin of the U.S. labor market."

The findings indicate that AI's impact extends beyond the technology sector, significantly affecting fields such as finance, healthcare, and professional services. The study categorizes AI's effects into 'visible' impacts, such as layoffs in tech roles, and 'hidden' impacts, affecting areas like human resources, logistics, and administration. Notably, states like Delaware, South Dakota, North Carolina, and Utah exhibit higher hidden AI exposure than even California.

The Iceberg Index is not a job loss predictor but offers valuable insights for policymakers. States like Tennessee, North Carolina, and Utah have already begun using the Iceberg Index to evaluate how AI might reshape their workforces and to inform state-level AI workforce action plans. For instance, Tennessee has referenced the tool in its AI Workforce Action Plan, and Utah is preparing its own. North Carolina Senator DeAndrea Salvador commended the index for its detailed county-level data, helpful in pinpointing economic vulnerabilities.

While previous studies have focused on theoretical "exposure" to automation, this research emphasizes jobs where AI can perform the same tasks at a cost that's either competitive with or cheaper than human labor. Earlier work from MIT's Computer Science and Artificial Intelligence Laboratory found that, for many roles, fully replacing human workers with AI remained too expensive or impractical in the near term, even where the technology could perform the tasks.

The study underscores the need for policymakers and business leaders to consider strategies for workforce adaptation and reskilling in response to AI-driven changes in the labor market. The Iceberg Index provides a detailed map of where disruption is forming, down to the zip code, for lawmakers making billion-dollar investments for reskilling and training.

In conclusion, the MIT and ORNL study highlights the significant potential of AI to transform the U.S. labor market. By providing a comprehensive analysis of AI's current capabilities and its potential impact on various sectors, the research emphasizes the importance of proactive measures to address these challenges.