Driverless Cars – Transformation of the Workforce

Widespread adoption of driverless cars will undoubtedly affect the American workforce.  Some industries, such as trucking, could go entirely or mostly driverless.  That would drive down the jobs open at truck stops that serve truck drivers and cut jobs for truck drivers themselves.  With fewer collisions among driverless vehicles, auto-body-repair shops would lose customers and might be forced into layoffs of employees or outright shutdowns.  Insurance adjusters would decrease.  Numbers of cab drivers and bus drivers would dwindle.

Think first of how many people make a living driving the following types of vehicles: long-haul trucks, taxicabs, buses, tractors.  You might underestimate these totals, which are as follows:

  • Truck drivers in the US: 1,797,700. 
  • Auto-body shop workers: 330,200.
  • Truck-stop employees serving truckers: 7,000 US truck stops with 40 employees each = 280,000.
  • Cab drivers: 233,900.
  • Bus drivers:  158,050.

This means, unfortunately, that a portion of these 2.8 million people are in a position to lose jobs after a shift to driverless cars.  This job loss would happen when employers learned that it was decreasingly profitable, in a day of more and more driverless vehicles, to hire truck drivers, run a body shop, or operate a cab company.  Additionally, as consumers we would choose the cheaper products, adding pressure to drive this switch.

How much of an effect on the US economy might such a job loss have?  The total US workforce numbers around 157 million.  Out of that 157 million, nearly 3 million might lose their jobs.  This means with a full shift to driverless, layoffs of around 1 in 50 people that currently are working would occur – 2 percent of the entire workforce.

What would happen then?  That would depend on whether and how the job loss was mitigated.  If nothing occurred to mitigate the loss, unemployment would swell.  The federal government might feel compelled to establish programs to aid in the transition if the problem became big enough.  The federal Workforce Investment Act of 1998 calls for use of “Individual Training Accounts” in helping dislocated workers back into the workforce. In December 2015, the Department of Labor committed $4.5 million for states, cities, and counties to run pilot programs under the Act.  These pilot programs will test particular techniques for using Individual Training Accounts in transitioning pools of dislocated workers back into the workforce.  If driverless cars catch on, it is likely that government retraining efforts will need to be redoubled.

It is said that job creation by private electronics companies would rise to mitigate job loss traced to driverless cars.  How quickly could companies like Google and Microsoft create 3 million new positions?  How many of these new positions could be filled by former bus drivers or truck stop employees?

Perhaps the biggest question is, will this happen, to what degree will it happen, how fast will it happen, and can we prepare now to mitigate any of these impacts? 

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