Self-Driving Cars and the Labor Market

Happy Labor Day!

At least if you live in the United States or Canada, where the first Monday of every September is a public holiday set aside to recognize the contributions of workers. It also marks the end of summer, but that’s neither here nor there.

I thought I’d take a few minutes on Labor Day to riff about how self-driving cars might affect the labor market and our future jobs.

According to the US Bureau of Labor Statistics, about 3.9 million Americans make their living as “motor vehicle operators”. That’s about 3% of the total labor force, which is surprisingly high.

About half of those workers are in trucking, with bus drivers and deliverymen making up most of the rest.

I’m not sure all of those jobs will go away, but eventually (40 years, say) a lot of them will.

So that’s the downside, or at least the largest part of the downside.

What’s the upside, particularly as it concerns the labor market?

I think most of the value will come from expanded opportunity. Getting to and from a job is a big cost, particularly for the poorest Americans. The New York Times goes so far as to assert (based on a Harvard study): “commuting time has emerged as the single strongest factor in the odds of escaping poverty.”

Lowering the cost of transportation, and the time it takes will help millions of Americans escape poverty.

It will also improve the lives of middle-class and affluent Americans, who will have access to a wider array of jobs, thanks to lower-cost transportation.

And companies should find hiring workers to be less difficult, as their talent pool expands.

This is a classic case of diffuse benefits and concentrated costs, and it’s important to remember that for the people bearing the cost, their whole way of life is disappearing. It’s catastrophic.

But, on net, the labor benefits to society should be tremendous.

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