More Less
More Less
May 16, 2016

How might self-driving cars change the lives of workers?

Opinion image

Google has been pushing the creation of self-driving cars, as have a few other companies. These are “not yet ready for prime time”; but I don’t doubt that within the next 20 years we will begin to see them on the roads. It is interesting to speculate/think about how this tremendous innovation might affect workers.

Let’s assume that self-driving cars will eventually cost no more relative to other goods, and other means of transport, than today’s autos. Since driving a car, especially commuting, is not people’s favorite activity, being relieved of the need to spend time at the wheel will make this new breed of cars more attractive—it will cause some people to shift away from public transportation—although I expect the shift will be tiny.

The bigger impact will be on how current auto-based commuters spend their time. The average American worker spends 40 minutes a day commuting to and from work. Self-driving cars will free up that time, giving workers 4% more time during their waking day to allocate across activities that might interest them. This will clearly make these workers better off—it will liberate them from an activity that most find unpleasant. But what will they do with their extra time?

I expect people will do more of what they currently do when they are restricted to be in a confined space—such as in one room in their homes. Since, like many cars already today, tomorrow’s driverless autos will have wifi connections, being self-driven to work will allow people to do anything that they do today in their living rooms, home offices, etc. More time will be spent on social media, reading magazines and books, watching pornography—really anything that can be done on a computer, e-reader, etc. And, of course, more multi-tasking will occur—e.g. listening to music while reading and being driven to work, talking on the phone while listening to music and reading email, etc.

Like earlier major innovations, self-driving cars will affect workers in their roles as producers as well as in their consumption of goods and use of time. They will generate whole new methods of road construction and, probably more important, create feeder industries making new products to outfit those roads and the self-driving cars that use them. Old-fashioned auto manufacturing and road construction may change, perhaps requiring workers with more skills, adding to the shift of labor demand away from semi-skilled work. These production-side changes may extend the trends of the last 40 years toward the “hollowing out” of employment and the concomitant relative earnings loss of those with few technical skills and little ability or inclination to invest in the skills that complement production with the new technologies.

In sum, self-driving cars will make workers generally better off; but like any new technology, a minority will lose out. And as the technology is adopted we need to think about how we might compensate the minority who are negatively affected.

Related articles:
Who owns the robots rules the world, by Richard B. Freeman

Please note:
We recognize that IZA World of Labor articles may prompt discussion and possibly controversy. Opinion pieces, such as the one above, capture ideas and debates concisely, and anchor them with real-world examples. Opinions stated here do not necessarily reflect those of the IZA.