U.S. Must Prepare for Job Market Shifts to Unlock Self-Driving Benefits

Autonomous vehicles are gearing up for commercial use and have the potential to unlock vast economic benefits, lowering the cost of goods and services, increasing productivity, creating new jobs and even building new industries. However, if AVs are adopted as widely as many anticipate, the transition will create challenges that will require addressing: AVs will change the nature of work in transportation and likely elsewhere in the economy, with potentially costly impacts on some workers and their families.

While the U.S. labor market is resilient and our workers have proven their ability to learn new skills over time, the potential rapid deployment of AVs raises two concerns: First, AVs will create a broad range of new jobs, the nature, location and timing of which we can’t fully anticipate. The flip side of this dilemma is that some skills, such as driving, will not be needed as much as before. Will employers be able to fill the new roles that are created? How do we streamline the transition between the jobs that employers eliminate and the new ones created, particularly when different skills and locations are involved?

To help grapple with these questions, Securing America’s Future Energy, a nonprofit group focused on reducing U.S. oil dependence, asked my team of economists to create a framework to scope out the nature of workforce impacts.

Our team’s findings were clear. As the nation moves toward adopting AVs, it is important to realistically assess the associated job and income losses. The workforce impacts will be consequential, but far from catastrophic, and the outcomes will depend largely on the choices made today by industry and policymakers.

SAFE also asked two other economists to contextualize this technological innovation alongside other network-scale shifts in the economy, and used case studies to illustrate the estimated $800 billion in annual economic and societal benefits, such as improved safety, enhanced mobility for senior citizens and people with disabilities, and an increase in a most precious resource—productive time.

We find that effects on workers will likely mount gradually, with a peak unemployment impact expected between the late 2040s and early 2050s under current deployment forecasts. The contribution of AV-related displacement to the U.S. unemployment rate is expected, at peak, to add an additional .06 to .13 percentage points, representing an addition of 170,000 to 380,000 workers to the unemployment rolls for a short time.

Now isn’t the time to panic, but policymakers and business leaders cannot afford to be complacent either. While it is tempting to view these figures as small in relation to the workforce as a whole, the impacts are concentrated within the specific occupations of professional drivers. While this impact is smaller than seen during recent recessions, it compares to about half the size of the recent “China shock” to U.S. manufacturing jobs.

Displaced workers stand to lose an average of about $80,000 each in lifetime earnings from lost work hours and lower subsequent wages. Aggregated across the next several decades as AVs deploy, this would translate into wealth losses of $100 – $200 billion for the AV-affected workforce and their families and communities — or up to $300 billion if the job losses happen during a recession.

Unlocking AV’s benefits and mitigating long-lasting impacts to the U.S. workforce requires moving forward on AV technology while simultaneously addressing our workforce development infrastructure. The cost of ignoring labor disruptions from AVs could materialize in a backlash that reduces acceptance of the technology and other future innovations. To help at-risk communities, policymakers may be tempted to stall the deployment of AVs to provide greater time for workforce adaptation. Such efforts may prove counterproductive — not only will a lag in deployment delay the societal benefits, but the United States risks ceding global leadership in this industry.

Self-driving presents vast benefits that we cannot ignore. It will require a keen foresight and leadership to realize the economic and social benefits it can offer while ensuring that our nation’s most valuable resource — our workforce — is appropriately protected and developed. Now is the time for Congress to prepare for a future that both unleashes these benefits and lays the groundwork for the U.S. workforce of the future.

Erica Groshen, a Visiting Senior Scholar at Cornell University’s School of Industrial and Labor Relations, and former Commissioner of the U.S. Bureau of Labor Statistics.

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