How self-driving trucks can create more jobs than they kill

Myles Udland
Markets Reporter

The economic buzzword of the moment is automation.

The robots are coming, we’re told, for our jobs, our money, and our cars, among other things.

But this one-way view of automation as a job-killing tidal wave that leaves mass unemployment and poverty in its wake — requiring a universal basic income — misses that re-orienting the economy around new technology often creates new opportunities and, by extension, new jobs to be filled.

And potentially even better jobs.

A new research paper from David Price at the Richmond Fed examines the 1.8 million heavy truck and tractor-trailer drivers in the U.S. who are at risk of losing their jobs in the case of widespread adoption of self-driving trucks.

And these jobs, Price notes, are of particular interest to economists, the media, and politicians given that these roles have been defined as “opportunity occupations,” or jobs economists define as those which pay at least the median national wage but do not require a bachelor’s degree.

But looking at how both the banking industry coped with mass automation of a core function 40 years ago and how the retail sector can do more with its existing workforce provide reasons for optimism that we are not fated to a robot-dominated future.

Otto is an Uber-owned self-driving truck company.

ATMs created more bank tellers

Price uses the example of ATMs becoming widely adopted in the U.S. during the 1970s while the number of bank tellers in the country increased at the same time. The job that ATMs were automating, then, did not become obsolete but was changed and, as a result, made more valuable.

As James Bessen wrote in the IMF’s publication “Finance & Development” in 2015:

As banks pushed to increase their market shares, tellers became an important part of the ‘relationship banking team.’ Many bank customers’ needs cannot be handled by machines—particularly small business customers’. Tellers who form a personal relationship with these customers can help sell them on high-margin financial services and products. The skills of the teller changed: cash handling became less important and human interaction more important. In short, the economic response to automation of bank tellers’ work was much more dynamic than many people would expect.

Being a member of a “relationship banking team,” while sounding a bit needlessly highfalutin, is a clear re-jiggering of an existing role into one that creates more value for the company and workers.

A counterintuitive result: more ATMs meant more bank tellers in the U.S. (Source: IMF)

 

Dispensing cash or depositing checks all day is precisely the kind of mindless work that robots and computers are great at. Explaining to customers the suite of other services a bank can offer is a great job for humans. (At Wells Fargo, however, this job might’ve been a little too great.)

But the proliferation of bank tellers that followed the tellers’ primary job being automated shows how automation conversations ought to focus not on what jobs can robots or computers can do instead of humans, but which jobs only humans can effectively perform. The answer to the latter is likely far larger than the former.

Work the floor then work the door

Last week, reports surfaced that Walmart (WMT) had begun asking its employees to deliver packages on their way home. And this move comes as the company has again tried to make inroads against Amazon’s (AMZN) Prime program, which famously offers free two-day shipping — and other benefits — for a a yearly membership fee, by making some two million frequently-ordered items available for free two-day shipping with no annual membership fee.

But asking store employees to also become delivery drivers on a part-time basis shows exactly what kinds of jobs are going to be needed if even more goods are shipped at an even lower cost across the country via self-driving trucks.

According to Price, “By reducing the cost of transportation, self-driving trucks might lead manufacturers to build more warehouses so they can give customers faster deliveries.” And, as Price notes, getting trucks to drive themselves on an interstate highway is far simpler than getting a car to navigate city streets on its own.

(The upshot here is that concerns over automation are often framed around the fact that in the 30 years, increasing economic inequality has seen high-wage jobs and employment grow, while middle-class prospects have declined. Making sales associates delivery people, then, advantages those who can afford to have their own car over those who take public transportation to work, thus creating further inequalities in the workforce.)

Walmart’s in-store associates may soon become delivery people, too.

Michael Watson, co-author of the book “Supply Chain Network Design,” told Price that big U.S. manufacturers may only have a handful of warehouses in the country, but if self-driving trucks make interstate transportation easier, then more numerous, but smaller, warehouses would be likely to crop up. This would then create more local delivery jobs.

Back in 2013, Amazon hired the U.S. Postal Service to deliver packages on Sundays, leading some to argue the company ought to just buy the Postal Service outright. Also recall that in 2013 Amazon and UPS had to offer gift cards to customers who didn’t get holiday gifts in time for Christmas.

Getting goods from the warehouse to the doorstep — what is called the “last mile” — has long been one of the biggest, if not the biggest, challenge for online retailers (or, in the case of Walmart, retailers who would like to have a bigger online presence).

Price writes that, “many of the new short-haul jobs would likely be higher-value-added jobs, interacting with customers and collecting intelligence.”

The analogy that Watson suggests to Price is that of the Coke (KO) or Pepsi (PEP) delivery person, who doesn’t just deliver drinks to a store but is also stocking shelves, looking at the displays of competitors, and keeping an overall eye on the state of the industry at the retail level.

Thinking about the earlier example of bank tellers moving from being human cash dispensers to members of a “relationship banking team,” then, you can see how being a Walmart sales floor associate could morph into a job like “community sales manager,” a job which becomes not just working the sales floor but also delivering online-ordered packages to local customers.

And maybe even asking them a question or two.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

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