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For the United States to return to full employment—finding work for the currently unemployed and accommodating new entrants into the labor force this decade—the US economy will need to create 21 million jobs by 2020, according to MGI's analysis. To understand how this might happen, MGI launched a research project that combines extensive sector analysis, interviews with human resource executives, a proprietary survey of 2,000 business leaders, and our own scenario analysis and modeling.

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The research analyzes 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. The research projects how the US labor force will evolve over the next ten years and creates different scenarios for job growth based on extensive analysis of sector trends. MGI's central finding is that a return to full employment will occur in only the most optimistic job-growth scenario.

This will require not only a robust economic recovery but also a concerted effort to address other factors that impede employment, including growing gaps in skill and education. The report offers a range of illustrative solutions based on lessons from US states and other countries that MGI hopes will add to the national conversation on jobs. Findings include: Recoveries are increasingly becoming "jobless" due to firm restructuring, skill and geographic mismatches between workers and jobs, and sharp decline in new start-ups.

The US needs to create 21 million new jobs by 2020 to regain full employment—and only achieves this in our most optimistic job-growth scenario. The US workforce will continue to grow until 2020, but under current trends, many workers will not have the right skills for the available jobs. Technology is changing the nature of work: Jobs are being disaggregated into tasks, work is becoming virtual, and firms are relying on flexible labor (temporary, contract workers). These trends offer new opportunities for creating jobs in the United States, a trend that some companies do not fully appreciate.

Progress in four dimensions will be essential for reviving the US job-creation machine: Develop the US workforce-skill to better match what employers are looking for; expand US workers' share of global economic growth by attracting foreign investment and spurring exports; revive 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 speed up regulatory decision-making that blocks business expansion and new investment. The report is part of a series of MGI perspectives on the theme of US growth and renewal.
(http://www.mckinsey.com/global-themes/employment-and-growth/an-economy-that-works-for-us-job-creation)