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Driverless trucks: economic tsunami may swallow one of most common US jobs

In April 2016, Uber announced the acquisition of Otto, a San Francisco-based startup that has developed a kit that can turn any big rig into a self-driving truck.

The Otto technology enables complete autonomy on highways: trucks can navigate, stay in their lane, and slow or stop in response to traffic conditions completely without human intervention. Otto’s equipment currently costs about $30,000, but that is certain to fall significantly in the coming years.

Otto is by no means alone. Massive automated vehicles are already commonly used to move materials for the Australian mining industry. Daimler, the German multinational company, has likewise demonstrated its own model, a giant 18-wheeler with a “highway pilot” mode available (meaning a driver has to remain present, prompting the head of the US branch to say that “tomorrow’s driver will be a logistics manager”). Another approach is to use automated convoys, in which self-driving trucks follow a lead vehicle.

It seems highly likely that competition between the various companies developing these technologies will produce practical, self-driving trucks within the next five to 10 years. And once the technology is proven, the incentive to adopt it will be powerful: in the US alone, large trucks are involved in about 350,000 crashes a year, resulting in nearly 4,000 fatalities. Virtually all of these incidents can be traced to human error. The potential savings in lives, property damage and exposure to liability will eventually become irresistible.

There’s only one problem: truck driving is one of the most common occupations in the US.

Once replaced by automation, where will these jobs go?

As of 2015, a typical production worker in the US earned about 9% less than a comparable worker in 1973. Over the same 42 years, the American economy grew by more than 200%, or a staggering $11tn.

For millions of average Americans, the reasonable expectations of their youth – a steady job, home ownership, college education for their children – have degraded into decades of stagnation, even as they have been continuously bombarded by news of the overall growth and prosperity of the US economy.

The driving force behind this transition has been technology. It is widely recognized among economists that while the impact of globalization has been significant, especially in specific regions of the country, robots and factory automation have been a far more powerful force. Indeed, even those jobs that did migrate to China are now evaporating as factories there aggressively automate.

Among those workers who remain employed, it has become almost cliche to complain about good, well-paying factory jobs that have degraded into far less lucrative and reliable positions at Walmart. The few good working class jobs that remain are those that – at least so far – have been exempt from the forces of both globalization and automation.

Jobs such as long-haul driving.

Indeed, truck driving is arguably one of the final barricades protecting a traditional world where diligent effort exerted in a blue-collar profession is respected, essential – and well compensated. It is likely no coincidence that a map highlighting the states where truck driving reigns as the lead occupation is closely correlated with a map showing the states that voted for Donald Trump.

This perfect storm creates the perception that America is “no longer winning” at manufacturing and that “we don’t make anything any more”. This could not be more wrong. Since 1990, the total value of goods produced in American factories has increased by 73% (after accounting for inflation).

The jobs story is very different, however. That near doubling in output has been accompanied by a 30% decline in manufacturing employment – a loss of more than 5m jobs.

America is producing more than ever before, but it is doing so with fewer and fewer workers.

For the foreseeable future, automated trucks are likely to be limited to long-haul highway operations, and it will probably require human intervention to pilot the truck along the final few miles to its destination.

In other words, there will still be some jobs, but it is easy to imagine that the nature of the “truck driving” occupation might be radically transformed. Piloting a future, computerized truck might well be perceived as a “technology” job. These workers will be freed from days and nights on the road and would be able to live normal lives, often in desirable urban locations.

In other words, piloting trucks for those final few miles might eventually evolve into a white-collar profession actively sought after by college graduates. This might be especially true in the wake of the onslaught of software automation in many other traditional white-collar, knowledge-based occupations (financial analysts, lawyers, computer programmers – any job that involves manipulating information in a predictable way).

The upshot could be that truck driving, like many other occupations before it, will eventually be subject to “credential inflation” and thus could become far less accessible to the roughly two-thirds of Americans who don’t have a four-year college degree.

While truck driving may eventually become the poster child for the automation wave, the disruption will, of course, be far broader, eventually encompassing the fast food, retail and office jobs that currently employ tens of millions of Americans.

The impact will be especially sharp in those regions where factory jobs once ruled and truck driving now offers the best path to blue-collar prosperity. And as a quick glance at the US electoral map demonstrates, these states punch above their weight politically – both in presidential elections and in the US Senate. An earthquake that is centered here will be felt far and wide.

It is entirely reasonable for every industrious and diligent person in our society to expect access to dignified, important and adequately compensated work. That is, indeed, one of the foundations of the American dream. Yet over the course of the coming years and decades, we may face a stark question: what are we to do if advancing technology makes that reasonable expectation impossible to fulfill?

Resolving that question may ultimately require a fundamental shift in our basic values. One viable solution is some form of direct income supplementation, perhaps in the form of a guaranteed minimum income or universal basic income.

This is an idea that is beginning to gain some traction. Currently, limited experiments are under way in Finland and the Netherlands, and there will soon be a privately funded trial in the San Francisco bay area. And this spring, the Canadian province of Ontario will also launch a trial run of universal basic income, at a cost of C$25m.

Still, a basic income is easy to disparage as “paying people to be alive”. We may need to instead begin thinking in terms of a “citizens dividend” – the idea being that all citizens should receive an ownership stake in the overall wealth and prosperity of the country, in much the same way that residents of Alaska currently receive an annual payment that derives from tapping that state’s energy resources.

If jobs are indeed poised to begin disappearing – or if the wages they pay will be relentlessly driven down as occupations are deskilled and access to a middle-class income requires ever increasing levels of education and intellectual capability – then we will need to find an alternate form of income distribution, or face the potential for both economic stagnation and social and political instability. We will also have to ensure that individuals find meaning and fulfillment in a world where they spend less time working.

All this is easy to say, but the challenges associated with any real solutions will be staggering.

The populist disruption that began rolling in June with Brexit and seemed to crest in November may well be just gaining steam, and navigating through a landscape where technology shreds jobs as never before may well turn out to be one of the seminal challenges we face in the coming decades.