Brookings: Indiana, Kentucky are the states most at risk for job loss due to automation

Though experts disagree on the exact number of U.S. jobs that are at risk of being eliminated by automation in the coming decades, economists are already trying to determine which states and cities may be the most affected.
A new report out today from the Brookings Institution today determined that Rust Belt states like Indiana and Kentucky are the ones that will be most ‘exposed’ to automation. While that doesn’t mean that their jobs will be automated entirely, it means those states are home to more occupations where automation is more likely to be widely deployed in the coming decades. Within some metro areas may prove to be more resilient than others.
The Brookings report used ‘potential for automation’ values assigned to more than 800 occupations developed by McKinsey in a report released last year.
McKinsey’s scores are calculated based on what percentage of tasks that make up jobs could be “automated by 2030 or in next decades based on currently demonstrated technologies.” Accommodation and food services jobs have the highest potential of automation at 74 percent, followed by manufacturing. Educational occupations have one of the lowest automation occupational score at 27 percent.
The authors note that only 0.5 of the U.S. workforce is in a job where 100 percent of the tasks have the potential to be automated in the coming decades. But the higher the automation risk score, the more likely that some tasks related to that job will be automated — meaning that people who work those fields may see more jobs being consolidated, and will have to put more effort into being constantly retrained.
The authors then used the potential automation values assigned to each occupation to calculate the exposure to automation score for each state and metro area, based upon how many jobs they have in each occupation. The states most at risk — Indiana and Kentucky — had automation potential scores upwards of 48 percent. The states with the lowest scores, New York and Massachusetts, had scores of about 42 percent, meaning 42 percent of the tasks that make up the job mix in those states will be at risk of being automated in the coming decades.
The risk level taken on by metro areas varies more significantly — Toledo, Ohio has an automation exposure of 50 percent, while San Jose, California has one of 40 percent.
Given the outsized focus on the deployment of robots in factories, it’s not surprising that manufacturing-intensive states like Indiana and Kentucky have more occupations there that are at risk of being disrupted by automation. However, it’s not just the occupational make-up of an area that determines how greatly it will be affected by automation.
The level of education obtained by that area’s workers will also play a factor, as routine-heavy roles like clerical, retail, and service work are more likely to have tasks that can be automated, and require less education. Less than one quarter of adults in Kentucky, Arkansas, Alabama, and Mississippi have a bachelor’s degree or higher. All of these states had one of the 10 highest automation potential scores.
“I think one of the narratives is the production industries have already been automated [away] and we’re moving onto the service sector,” Mark Muro, senior fellow at the Brookings Institution told VentureBeat. “And our research doesn’t show that that is exactly the case, there are still many workers in many vulnerable occupations in the production center that still matters in a lot of places.”
On a metro level, it is manufacturing-intensive areas like Toledo and Greensboro-High Point, North Carolina that are also most exposed to automation. But on the whole, large metro areas — even in manufacturing-intensive states — will likely be able to weather the storm OK as they’re more likely to have a more diverse mix of occupations.
“The average worker in a small metro area with a population of less than 250,000 works in a job where 48 percent of current tasks are potentially automatable,” the Brookings report notes.
This high exposure for smaller metros also also comes at a time when larger ‘superstar’ metros like San Francisco, Seattle, and Austin have added much more tech jobs and more new businesses over the past decade than rural to mid-sized cities in the middle of the country.
What this means is that smaller metro areas need to be prepared to hit with a double whammy.Nationally, things could look OK — automation could lead to increased company earnings, and total employment could continue to rise. But the national increase in employment won’t mean anything to smaller areas who continue to lose out on new jobs, and see their existing ones automated away.
The Brookings authors proposed a variety of policy solutions — from state and federal government investing more in worker retraining programs, to more federal branches opening offices in rural areas to help diversify their job mix. But Muro said that the U.S. also won’t really know how quickly employers will adopt automation until the next recession. He said that research has shown that in an economic downturn, employers are more likely to adopt new cost-saving technology.
“We don’t think it’s a wholesale emergency — most people in most places are going to manage this [increased automation],” Muro said. “But many places are going to be extremely up against it.”
Source: VentureBeat