October 19, 2016

A Future without Jobs, Trucking Division

Kent Lundberg contributes this piece from Vox –  an interview with Andy Stern, former president of the Service Employees International Union (SEIU):
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When driverless trucks are manufactured at scale, which will happen far sooner than many realize (as soon as five years), America’s 3.5 million truck drivers will be dispensable. That doesn’t mean the profession of truck driving will disappear overnight, but it will shrink considerably.

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  1. I don’t think it’s fair to say that not taking immediate steps to deal with this is burying our heads in the sand.
    If workers are currently or soon will be replaced by robots, we’d see significant gains in labor force productivity. In the past, this hasn’t been a disaster which needs fixing but has led to a huge increase in the standard of living. I think we should use that as a starting point and then try to account for differences, rather than assuming this will be some sort of calamity.
    But let’s assume that there will be some explosion of productivity. We often hear about how our economy will be starved for workers as boomers retire. We can’t both be starved for labour and over supplied. If robots to replace workers, then this will give our economy the ability to better provide for retirement and health care costs for our aging retirees. For individuals, some jobs may disappear but I don’t think we should just assume they’ll be shunted to low-wage jobs. After all, these are the very jobs that will be most easily replaced by robots.
    Following on that point, productivity measurements have been quite low for some time so there’s little evidence that our jobs are getting replaced at the moment, so despite the hype we are very early in any potential curve. Both of these tell me that doing nothing is a very reasonable step: there’s no evidence of a problem, and if there is a problem, there’s evidence to say it may be beneficial.
    One could equally ask whether we should admit this is not a problem or whether we should raise a panic. That’s not a very fair question to those that want to make sure we give a fair shake to all Canadians, but is it that different than dismissing opponents as putting their heads in the sand to ignore the “obvious”?

    1. If we’re trying to guess at the most obvious outcomes of driverless trucks, it would likely be a substantial lowering of transport costs, and increased productivity. Driver salary is usually the single highest cost factor for an OTR trucking company (occasionally #2 cost, when oil prices are high). And presumably the 11-hour drive time limit goes away when fatigue is no longer a critical factor. So productivity does increase. All of this is likely to the detriment of truck driver jobs.
      I’ll be interested to see if this happens in the next ~5-years. I can see obvious opportunities for this to scale quickly on the US interstate system, intercity (Volvo already has some of this tech on the road), but I’m not sure I can see these driverless vehicles negotiating corners/bikes/pedestrians in dense urban cities without substantial testing.
      Alex T, in terms of your belief that productivity will increase substantially and lead to higher quality of life, that might be true…..the question is for whom? The trucking firms (lower cost, higher productivity), consumers of products (lower cost) win. Governments (recipients of driver income tax) & drivers (their job) are potential losers.
      “We often hear about how our economy will be starved for workers as boomers retire. We can’t both be starved for labour and over supplied.” OK, but you presume that labour is easily interchangeable. How much re-training is required? How long does that take? Does it make sense to retrain a 59-year old if that takes 3-years? This labour skill asymmetry is the reason that demand for software developers is massive in California, yet large portions of the center of the US remain unemployed.
      “If robots to replace workers, then this will give our economy the ability to better provide for retirement and health care costs for our aging retirees.” How? We now have a larger share of unemployed citizens, not paying taxes into the pool, and drawing EI. How does that help retirement and health care costs? That logic only works with a new taxation formula for government.

      1. We have a lot of experience dealing with industries that steadily shrink. It’s difficult for the families and communities impacted, and I think we could do a lot better, but is there anything special about trucking? Only the hype around robots, as far as I can see. And because there are robots, the magnitude of the issue is often portrayed as being far larger than it is, and the difficulty in coping to be far worse.
        Our current levels of productivity growth are actually far lower than they have been in almost every period going back 70 years. Periods of high productivity growth have had the highest income growth as well, which matches with conventional economic theory. It’s reasonable to expect that to continue in the hypothetical future where robots lead to a boom in productivity. And to your question of taxes, tax revenues rise with GDP especially if wages also grow (corporate taxes aren’t zero yet, so even if salaries don’t trickle down, tax revenue should still grow).
        Yes, there will be winners and losers in the future but that is not the fault of robots. Our robot overlords are not here now, yet we have some of the highest levels of income inequality in a century. That is a political issue, not a technological or economic one. We can fix income inequality in a world with or without robots, and if robots do come for the jobs we hold today, we should expect that our jobs will shift and change rather than disappear. If the problem really is income inequality or stagnant wages, by scapegoating robots we will miss the real problems and any solutions we come up with won’t help.

        1. Of course the larger issue is that you cannot have infinite growth on finite planet. We have to figure out how to have high quality of life without economic growth. But that seems to be taboo.

  2. Thank you to Alex T for saving me the trouble of typing a comment. There used to be >90% of the population engaged in growing food, now that percentage is close to nothing. Think about it.

  3. Don’t believe in all the hype about AVs and driverless trucks. It is a long LONG way off. We don’t even have Uber in Vancouver. Cell phones were invented in the 1960s and became pervasive smartphones only 50 years later – for a $300 device. A $100,000+ device like a truck will take far longer to be replaced.
    Language translation and speech recognition was widely hailed in the 1980s as coming “soon” and today is available only in a very basic format, 30+ years later.

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