A study by the Massachusetts Institute of Technology has found that artificial intelligence can already replace 11.7% of the workforce, or as much as $1.2 trillion in wages across finance, health care and professional services. The study was conducted using a labor simulation tool called the Iceberg Index, which was created by MIT and Oak Ridge National Laboratory. This index simulates how 151 million U.S. workers interact across the country and how they are affected by AI and corresponding policy.
The Iceberg index was announced earlier this year, and it shows a forward-looking glimpse of how AI will shape the labor market all over the country. The index offers a detailed map of where disruption is forming down to the zip code, for lawmakers making billion-dollar investments for reskilling and training.
“Basically, we are creating a digital twin for the U.S. labor market,” said Prasanna Balaprakash, ORNL director and co-leader of the research. ORNL is a Department of Energy research center in eastern Tennessee, home to the Frontier supercomputer, which powers many large-scale modeling efforts.
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The index runs population-level experiments, revealing how AI reshapes tasks, skills and labor flows long before those changes show up in the real economy, Balaprakash said.
The researchers found that the layoffs and the role shifts in tech, computing and information technology represents just 2.2% of total wage exposure, or about $211 billion. The total exposure comes to a figure of $1.2 trillion, and that includes routine functions in human resources, logistics, finance, and office administration. Those are areas sometimes overlooked in automation forecasts.
The researchers said that the index is not a prediction engine about exactly when or where jobs will be lost. Instead, it’s meant to give a skills-centered snapshot of what today’s AI systems can already do, and give policymakers a structured way to explore what-if scenarios before they commit real money and legislation.
The researchers partnered with state governments to run proactive simulations. Tennessee, North Carolina and Utah helped validate the model using their own labor data and have begun building policy scenarios using the platform.
The Iceberg Index challenges a common assumption that AI risk only affects the tech sector, and is only relevant in coastal areas.The index’s simulations show exposed occupations spread across all 50 states, including inland and rural regions that are often left out of the AI conversation.
“Project Iceberg enables policymakers and business leaders to identify exposure hotspots, prioritize training and infrastructure investments, and test interventions before committing billions to implementation,” the report says.