US vs Iraq: AI Job Risk in Former War Partners 2026

Two countries shaped by the same conflict

The United States and Iraq have been linked by conflict since the 1990 Gulf War. The 2003 invasion removed Saddam Hussein's government. The occupation lasted until 2011. Then, the rapid collapse of Iraq's security forces in 2014 and the emergence of ISIS prompted the return of US military advisors, air support, and eventually ground forces that remained active through 2026. Two decades of conflict - including infrastructure destruction, sectarian violence, displacement, and institutional collapse followed by reconstruction - have shaped the Iraqi labour market in ways that make AI adoption timelines fundamentally different from the US.

The Iraq ILO ILOSTAT data is from 2021, a data year that falls during the post-ISIS reconstruction phase. Iraq's economy in 2021 was recovering but still operating under the weight of high unemployment, oil price volatility, and incomplete infrastructure rebuilding. Iraq's GDP per capita was $5,410 in 2025 (World Bank Open Data, CC BY 4.0) - 17x below the US at $90,026.

The US Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) May 2025 release (2024 data year), accessed via ILO ILOSTAT (CC BY 4.0), covers 143,066,500 workers. Iraq's ILO ILOSTAT (CC BY 4.0) 2021 data covers 8,463,000 workers across all ISCO-08 major groups.

Side-by-side: occupation groups in both countries

The table below compares both countries across ISCO-08 major occupation categories. US data is BLS OEWS May 2025, accessed via ILO ILOSTAT (CC BY 4.0). Iraq data is ILO ILOSTAT (CC BY 4.0), 2021 data year. Iraq wage data is not available at the ISCO-1 level for this data year in the ILO ILOSTAT series.

Iraq has a complete ISCO-08 dataset at the major group level - all 10 categories are present, which makes it a more directly comparable dataset than some lower-income countries. The contrast with the US is stark at the occupation composition level: Iraq's largest group is professionals (1.4 million, 16.6%) followed by service and sales (1.99 million, 23.5%) and craft and trades (1.79 million, 21.2%). The US professional group alone (35.74 million) is 25 times larger than Iraq's entire workforce.

Why Iraq's average is 3.77 versus 5.07 for the US

The 1.3-point gap between Iraq's average AI exposure (3.77/10) and the US (5.07/10) is explained by workforce composition. Iraq's three largest groups by score rank are: service and sales workers (1.99 million, 23.5%, score 3.5/10), craft and related trades workers (1.79 million, 21.2%, score 2.5/10), and professionals (1.4 million, 16.6%, score 6.5/10). The combined weight of service, craft, agricultural, armed forces, plant operators, and elementary workers in lower-scoring categories pulls Iraq's average below 4.0/10.

The most notable feature of Iraq's workforce data is the near-absence of managers. Managers represent just 62,300 workers - 0.7% of tracked employment. This compares to 23.2 million US managers at 16.2% of the workforce. In the US, manager-level roles at 5.5/10 contribute substantially to the higher average. Iraq's management layer is extremely thin relative to its total employment, reflecting an economy where state employment dominates, private enterprise is constrained, and formal corporate hierarchy is less developed.

Iraq's clerical group is also unusually small at 157,600 workers (1.9% of employment) - the peak 8.5/10 score contributes very little to the weighted average when the group has this small a share. In the US, clerical workers at 16.0% of employment are the single biggest driver of the higher average.

The armed forces dimension: 20 years of militarisation

Iraq's armed forces sector of 443,200 workers (5.2% of all tracked employment) deserves specific analysis. The US armed forces, at 1,425,000 workers, represent just 1.0% of US tracked employment. Iraq's proportional armed forces presence is more than five times the US rate.

This reflects the legacy of conflict. The post-2003 Iraqi Security Forces were built largely from scratch following the dissolution of the Ba'athist military by Coalition Provisional Authority Order 2 in 2003. The Popular Mobilization Forces (PMF, or Hashd al-Shaabi), formed in 2014 to counter ISIS, substantially expanded paramilitary employment. By 2021 - the ILO data year - Iraq's formal and semi-formal security employment was among the largest per-capita in the region.

For AI risk purposes, armed forces occupations score 2.5/10. The tasks involved - physical security, combat operations, logistics under conflict conditions, intelligence operations - do not map cleanly to current AI capability. This is true in both the US and Iraq. The difference is that in Iraq, the armed forces sector is proportionally five times larger, contributing more weight to the lower end of the AI score distribution.

Iraq's oil sector is also relevant here. Oil and gas employs workers across multiple ISCO categories - but oil extraction itself is capital-intensive with relatively small direct employment. Iraq's oil revenues fund government salaries across the public sector, which is the dominant employer in the Iraqi economy. Government salary dependence reduces the private-sector competitive pressure to automate that drives AI adoption in market economies.

The unemployment factor: when workers are surplus, automation ROI weakens

Iraq's 15.48% unemployment rate (World Bank Open Data, 2025) is one of the highest in the Middle East and among the highest globally for a country with significant oil revenues. For context, OECD country unemployment rates typically range from 3-8%. Iraq's unemployment reflects structural problems: a bloated public sector, limited private sector development, youth unemployment that is substantially higher than the headline figure, and gender employment gaps with female participation severely constrained.

High unemployment has a direct effect on AI adoption incentives. When labour is cheap and surplus, the cost-benefit case for AI automation is fundamentally different than in tight labour markets. US employers in sectors facing labour shortages - healthcare, logistics, financial services administration - cite workforce availability as a driver of AI investment. Iraqi employers face the opposite problem: more workers than jobs, many of them in the public sector where efficiency pressures are limited and salary expenditure is covered by oil revenues rather than competitive market dynamics.

Iraq's HDI of 0.695 (UNDP Human Development Report 2025, rank 126, 2023 data year) reflects moderate levels of health and education attainment. Iraq has universities and a technically trained workforce, including engineers and doctors. But in an economy where 15.48% are unemployed and much of skilled employment is in public administration funded by oil, the channels for AI-driven productivity growth are narrow.

Economy context: US vs Iraq side by side

The table below uses World Bank Open Data (CC BY 4.0, 2025) and UNDP Human Development Report 2025 (HDR 2025, 2023 data year, licence CC BY 3.0 IGO).

The safest jobs from AI in both countries

Iraq's elementary occupations (490,700 workers, score 2.0/10) are the single lowest-scoring group in either country. Elementary work - cleaning, manual handling, basic construction assistance - requires physical presence and variable-environment dexterity that AI systems handle poorly. Iraq's craft and trades workers (1,791,200, score 2.5/10) at 21.2% of employment represent the bulk of Iraq's most AI-insulated employment.

What this means for workers in both countries

For US workers, the AI risk is immediate and measurable in deployed systems. The 22.9 million US clerical workers at 8.5/10 are in roles where AI workflow tools are already in production in 2026. Enterprise deployments in financial services, insurance, healthcare administration, and legal support have been documented by major US employers. The full US analysis covers which sub-groups face the earliest displacement timelines. US professionals at 6.5/10 (35.74 million workers, median $82,032 per year per BLS OEWS May 2025) face AI augmentation and in some cases replacement of specific task clusters within the 2026-2029 window.

For Iraqi workers, the 157,600 clerical workers at peak exposure of 8.5/10 are technically in the most vulnerable category on task susceptibility grounds. But Iraq's risk velocity of 0.5 reflects structural barriers: $5,410 per capita GDP constrains enterprise AI investment; 15.48% unemployment removes labour-shortage pressure to automate; AI infrastructure including reliable cloud connectivity, enterprise software markets, and system integration capability remains underdeveloped relative to the deployment frontier in the US and Gulf states.

Iraq's professionals (1.4 million, 16.6%, score 6.5/10) face the most interesting near-term dynamic. Iraqi professionals include engineers, doctors, lawyers, and educators. Some of these roles - particularly in sectors connected to international oil companies operating in Iraq's southern fields - may face AI augmentation sooner than the headline country metrics suggest. International oil operators bring their own technology standards and may deploy AI tools regardless of local market conditions. But this affects a fraction of Iraq's professional workforce.

Iraq's largest AI-insulated groups - craft and trades (1.79 million), service and sales (1.99 million), agricultural workers (729,900), armed forces (443,200), and elementary occupations (490,700) - together account for more than 5.4 million workers, roughly two-thirds of Iraq's total tracked workforce. These groups face essentially no near-term AI displacement risk in Iraq's current economic context.