Khaberni - The Massachusetts Institute of Technology released a study on Wednesday, November 26, that found artificial intelligence can indeed replace 11.7% of the American labor market, equivalent to $1.2 trillion in wages in the finance, healthcare, and professional services sectors.
The study was conducted using a labor simulation tool called the “Iceberg Index,” developed by the Massachusetts Institute of Technology and the Oak Ridge National Laboratory. This index simulates how 151 million American workers across the country interact and are affected by artificial intelligence and related policies.
The Iceberg Index, announced earlier this year, provides a forward-looking vision of how artificial intelligence is reshaping the labor market, not only in coastal technology hubs but across all states. For lawmakers preparing to invest billions of dollars in retraining and training, the index provides a detailed map of locations where changes are taking place, down to the zip code.
Prasanna Balaprakash, director at the Oak Ridge National Laboratory (ORNL) and co-leader of the research said, “Essentially, we are creating a digital twin of the labor market in the United States.” The Oak Ridge National Laboratory is a research center affiliated with the Department of Energy in East Tennessee and houses the Frontier supercomputer, which powers many extensive modeling efforts.
The index conducts population-level experiments, revealing how artificial intelligence is reshaping tasks, skills, and workflows long before these changes appear in the actual economy, according to Balaprakash.
The index treats 151 million workers as individuals, each with their own skills, tasks, professions, and locations. It identifies over 32,000 skills across 923 professions in 3,000 counties, then measures where current AI systems can already perform these skills.
What the researchers found is that the visible part of the problem, layoffs and role changes in technology and computing sectors, only represents 2.2% of total wages, about $211 billion.
The visible portion lies in the total wages amounting to $1.2 trillion, including routine jobs in human resources, logistics, finance, and office management. These areas are sometimes overlooked in automation forecasts.
The “Iceberg Index” also challenges a common assumption about the risks of artificial intelligence, that it would be limited to technical roles in coastal centers. The simulations conducted by the index show occupations at risk are widespread across all fifty states, including rural and inland areas often neglected in discussions about artificial intelligence.
To bridge this gap, the “Iceberg” team created an interactive simulation environment that allows states to experiment with various policy tools, from reallocating workforce funds and adjusting training programs, to exploring how changes in technology adoption impact local employment and GDP.
The report says: “The ‘Iceberg’ project enables policymakers and business leaders to identify risk hotspots, prioritize training and infrastructure investments, and test interventions before allocating billions of dollars for implementation.”
