Study: Artificial Intelligence Could Displace $1.2 Trillion in U.S. Jobs

A study conducted by the Massachusetts Institute of Technology (MIT) reveals that artificial intelligence could replace jobs valued at $1.2 trillion in the U.S. labor market, representing 11.7% of total wages in critical sectors including finance, healthcare, and professional services.

Published on Wednesday, November 26, the study utilized a unique simulation tool known as the "Iceberg Index" (Iceberg Index), developed in collaboration with the Oak Ridge National Laboratory. This index aims to simulate the interactions of 151 million American workers and the potential impact of artificial intelligence and related policies.

Prasanna Balaprakash, director at Oak Ridge National Laboratory (ORNL) and co-lead of the research, explained the project's goals, stating, "Essentially, we are creating a digital twin of the labor market in the United States." He noted that the index conducts "population experiments that illustrate how artificial intelligence reshapes tasks, skills, and workflows long before these changes become evident in the real economy."

The findings challenge traditional forecasts, showing that the most significant impact of artificial intelligence is not concentrated in technology and computing sectors, which account for only 2.2% of total wages (approximately $211 billion), representing the visible portion of the "iceberg."

The greatest risk, the invisible part, lies in administrative and routine jobs that are often overlooked in discussions about automation. Artificial intelligence threatens wages totaling $1.2 trillion in areas such as human resources, logistics, finance, and office management.

The threat posed by artificial intelligence extends beyond coastal tech hubs, affecting all fifty states, including rural and urban areas that are often marginalized in these discussions.

The "Iceberg Index" provides an unprecedented predictive view by treating 151 million workers as individuals, each with unique skills, tasks, and locations. The index identifies over 32,000 skills across 923 occupations in 3,000 counties, accurately determining which skills can be performed by current artificial intelligence systems.

To bridge the gap between analysis and application, the team has created an interactive simulation environment that allows policymakers and business leaders to test the effects of various policy tools, such as training and reskilling programs, before investing billions in their implementation.

The report concludes that the "Iceberg" project enables policymakers and business leaders to identify risk areas, set training priorities, and test interventions before allocating billions for implementation, providing a proactive roadmap for addressing labor market changes.