Stick shift: Autonomous vehicles, driving jobs, and the future of work

At this moment, more than 30 companies across the globe say they are working on autonomous-vehicle technology. These companies range from computing-technology firms like Apple, Google, and Intel to those usually associated with automobile manufacturing[1] such as BMW, Ford, Honda, and Volvo.[2] Their most optimistic predictions are that in as few as three to five years,[3] fully autonomous vehicles—automobiles without human drivers—will be in regular use on the road.
Predictions vary about whether fully autonomous vehicles, Level 5 on the SAE International classification scale for autonomous-vehicle technology[4], will be introduced first. Yet, given the number of companies working to make improvements and the progress already made with Level 4 technology—which marks the stage when vehicles are classified as being capable of safely driving themselves in predictable spaces—it is highly possible that the technology will progress to Level 5 in the near future. Many economists, pundits, and companies are predicting just that.
Autonomous-vehicle technology offers a number of positive opportunities. It has the potential to save many lives, limit environmental damage, increase productivity and, as a result, improve living standards across the country if the gains are distributed equally.[5] But the technology also has the potential to cause significant economic hardship for a number of workers, at least in the short term. For those who drive vehicles for a living, the full financial impact of this technological change will depend, in large part, on whether the transition takes a while or occurs relatively quickly. It will also depend heavily on whether the initial technology deployed is fully or partially autonomous.
Overall, 2.86 percent of all workers in the United States are employed in driving occupations. Though it is possible that workers displaced by autonomous-vehicle technology may eventually find new jobs at some point, the analysis contained in this paper is focused on the immediate, short-term impact to employment in the transportation sector if a rapid transition to fully autonomous vehicles were to occur. Using data from the 2010 to 2014 merged American Community Survey released by the U.S. Census Bureau, this paper estimates the labor market impact of jobs likely to be lost with a rapid transition to autonomous vehicles. The report finds that certain population groups and areas of the country would be disproportionately affected. Finally, we call for policymakers to take immediate steps to offset the potential for harmful labor disruptions.