New Report: Autonomous Vehicles Will Directly Impact 16 Million Jobs; 1 in 9 American Workers

Automated Vehicles Could Impact Almost 16 Million Jobs

According to a new report from the US Department Of Commerce, autonomous (self-driving) vehicles could impact approximately 15.5 million jobs. This means about 1 in 9 American workers would either be out of a job, or have their duties (and likely hours) reduced with the mass-adoption of automated vehicles.

In 2015, the year the study examined, 15.5 million Americans were involved in occupations that were either “motor vehicle operates” or “other on-the-job drivers.”

Motor vehicle operators include those workers whose primary activity is transporting people or goods, such as long-haul truckers or taxi drivers.  In 2015, there were 3.8 million workers in this category—all of whom are at risk at losing their job entirely.  These workers, according to the study, are “predominately male, older, less educated, and compensated less than the typical worker.”

The other category potentially affected, “other on-the-job drivers”, use vehicles to deliver services or travel to work sites, such as construction workers, repair workers, and first responders. In 2015, 11.7 million Americans had these sorts of jobs, which have varying degrees of vulnerability from AV replacement.

Here’s a look of the breakdown of each industry impacted by potential AV replacement.

One potential issue is that the introduction of truly self-driving vehicles, which the study predicts could may only be ten years away, there could be a massive dump of unnecessary labor back into the labor force. Even with unemployment at a 16-year low, this could be potentially catastrophic to the economy as a whole.

Or would it?

Would Self-Driving Vehicles Collapse Our Economy?

The short answer is no. The long answer is still no.

As was pointed out in an article published by Zero Hedge last year, AVs have the potential to increase our economic efficiency by a multiple of at least two to three in certain industries, because human-operated automotive systems operate with high levels of redundancy (red lights come to mind).  This means that although there will be fewer driving jobs, there will likely be explosions of employment in other predicate industries that benefit from more efficient (and cheaper) transportation.

Not only are our current systems necessary redundant in order to account for human error, most people don’t drive that much anyways.  Right now America’s utilization capacity for the auto industry is ~3%, meaning that each car is only used for about 45 minutes each day.

Our needs could easily be met by simply renting automated vehicles for when we need them.

This is already happening with the increasing use of ride-sharing services like Uber.  As the article from Zero Hedge explains:

The problem with mass transit is that people still need a car to get back and forth to the train station or bus stop.  The problem with Ubers/Taxis is that they’re expensive for daily use due primariliy (sic) to the labor overhead that’s built into your per mile rate.  But fully autonous (sic) vehicles solve both those problems.  Now, people will have the option of a vehicle at their beck and call without having to fund the upfront capital cost of a purchase and/or the per unit human capital costs inherent in taking an Uber.  In other words, the per mile rental rate of a fully autonomous car should be competed down to a level that provides an adequate return solely on the cost of the vehicle…no wages, no benefits, none of the typical hassles associated with employing people.  Or, said another way, taking an Uber is going to get really freaking cheap.

But the best part is that capacity utilization with fully autonomous cars can skyrocket driving per unit costs even lower for passengers. For example, when you drive to work right now your car sits there all day until you drive home. In the autonomous car world, that car will drive you to work then go pick up multiple other poeple (sic) to do the same thing.  Now, if capacity utilization doubles from just 3% to 6% all of sudden half the number of cars are required in the US which means annual SAAR goes from ~17mm to ~8.5mm…which means Ford and GM likely find themselves in another bailout situation.

AVs have the potential to greatly increase the efficiency and convenience of our transportation system.

Plus, they also stop traffic jams:

The raw logic behind self-driving cars is, at least on the surface, highly positive.  Autonomous vehicles would almost certainly grow our economy, in both the short and long run.

Self-Driving Vehicles Inject Fragility Into Our Nation

However, like green energy schemes, the centralization of power to increase efficiency results in much more fragility being injected into the system. This makes this new and exciting infrastructure more susceptible to exogenous “black swan” events, which are by nature unpredictable and have the potential to be catastrophic—essentially, it puts all our eggs in one basket.

For example, an unforeseen problem with the communications infrastructure, or coding could paralyze an entire city, since no AV unit is completely autonomous (as are human-operated vehicles).

There is also the issue of atrophy: rather than everyone owning their own cars, it is likely that, with the widespread use of AVs, that people would simply share them by renting out time.  This means fewer cars are needed.   Eventually we would reach a point where there were far fewer vehicles than we would need in the event of an emergency, such as an evacuation.

But perhaps the biggest problem with AVs is the question of freedom: are we really willing to surrender control over life-and-death decisions to computer algorithms.  That is, in the event of a crash, who does the vehicle protect, the occupant or pedestrians?

This is massive ethical dilemma that most people can’t agree on (called the train dilemma): this choice will be made for us all by machines.

We need to consider these thorny issues before adopting automated vehicles simply for economic expediency.

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2 Comments on "New Report: Autonomous Vehicles Will Directly Impact 16 Million Jobs; 1 in 9 American Workers"

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Warren
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If it happens, and there’s a lot to do before it does there will be massive changes, yes.

One thing is that people are going to have almost everything delivered. Who likes to go grocery shopping? No one. So enter your purchase online and then a car shows up in an hour or so.

This is true for everything. Need stuff from the pool store? Delivered. Want the cheap hot dog from COSTCO? Delivered.

Everything.

This is going to save people an enormous amount of time.

People taking these to work will save time as they can finish up in the car. Plus productivity might increase as they can work instead of drive.

Traffic will be more efficient, thus saving even more time.

It’s impossible to guess just what people are going to do with all this freed up time but it will change the texture of society.

If the other things happen, the remove of illegals and the raising of tariffs, then I expect that Americans are going to have a lot more money flowing to them (and not in nominal terms, an actual increase in real income)and so some of that money is going to be spent on vacations, excursions, experiences and so forth so I predict a huge, huge increase in the leisure sector.

More theme, adventure and water parks, more cruise ships (maybe even cruise blimps!), more spas, more camping experiences, more concerts and on and on.

So while most of these jobs will not pay as well as good manufacturing jobs they will be an absolute boon of entry level and part time jobs for the young and under-employed to take advantage of.

Of course building the components for all these new leisure activities will create good manufacturing jobs so I would not worry about the shift from driving and related jobs as we’ll see a lot of new, fun, good-paying jobs created.

Warren Platts
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One thing that will be helped is the sheer number of people who for whatever reason don’t have driver’s licenses. One Florida study found that fully 15% of all licenses were suspended or revoked, and that 10% of all drivers on the highway did not have a valid license. Getting a license back after it’s been suspended can turn into a Kafkaesque nightmare. No doubt many otherwise able-bodied people have dropped out of the labor force because they simply don’t have a drivers license which is often a basic job requirement for working class folks. Automated cars will bring a lot of these people back, helping to grow the economy.

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