Self-Driving Cars Will Boost the Job Market, Says Marc Andreessen (recode.net)

A future with self-driving cars has induced a lot of anxiety about a resulting loss of jobs, but in fact, they'll create tons more jobs, Silicon Valley investor Marc Andreessen (Wikipedia) said at Recode's annual conference on Tuesday evening. "The jobs crisis we have in the U.S. is that we don't have enough workers," he said. From a report: "It's a fallacy," Andreessen said (specifically citing the lump of labor fallacy and the luddite fallacy). "It's a recurring panic. This happens every 25 or 50 years, people get all amped up about 'machines are going to take all the jobs' and it never happens." Andreessen used the example of the rise of the automobile industry a century ago, which many thought would cost the livelihood of everyone whose jobs were to take care of horses. But "the car then created not only a lot of jobs creating cars" but everything else that happened because of the car: Paved streets, restaurants, motels, movie theaters, apartment complexes, office complexes, the entire buildout of suburban America, etc. "The jobs that were created by the automobile on the second, third, and fourth order effects were 100X, 1000X the number of jobs that blacksmiths had," he said.

Comments

"It never happens".

[queazocotal]

'Playing Russian Roulette is perfectly safe, I've done five rounds so far'.

The jobs that went away in the past were the trivial ones, where you may literally have been able to replace a person with a transistor or automatic valve. (Elevator/lift operator).
There were plenty of newly available jobs for people of average skill to move into.

The game-changer today is not that any particular field is being automated, but that in many places, the robot is equal to 'the person of average skill'.
If all of the delivery, warehousing, farming, ... jobs go away, that is an enormous hollowing out, with masses out of work.
The new jobs may be around, but increasingly the new jobs leverage computers to solve with a team of 20 (that may get very rich) problems that used to take thousands of employees.

Re:"It never happens".

[rkordmaa]

So what if it does happen, what are we supposed to do, tremble in fear and stop advancing as a human race? Halt the march of progress in technology, stay stuck exactly where we are? Sod that! If it happens, it happens, humankind will adapt and continue on harder, better, faster, stronger.

Re:"It never happens".

[MickyTheIdiot]

No, but we need to do better than the Right's drumbeat of "only the lazy don't have jobs". If we continue to worship corporatism and capitalism we could end up with large numbers people starving because they aren't capable of getting the education and skills they need to get a job. That's a significant number of people.

Re:"It never happens".

[jcr]

The jobs that went away in the past were the trivial ones

At the turn of the century in 1900, 80% of Americans worked on farms. Today, it's around 4%. This did not result in 76% unemployment, you dolt.

What it did was drastically cut the cost of food, and make labor available for new jobs, which nobody could have predicted at the time. Robotic cars and trucks are going to drastically reduce the cost of transportation, and once again people will take up new employment in new fields, and our overall standard of living will increase.

-jcr

Re:"It never happens".

[MickyTheIdiot]

Because education isn't something you poor into someone's ear and suddenly they are skilled.

Not everyone can be an engineer, doctor, or even a programmer as far as that is worth. Some people can not benefit from training.

This problem was written elegantly a long time ago by Kurt Vonnegut in "Player Piano".

Re:"It never happens".

[TWX]

Unfortunately that only works if everyone is willing to play-ball. The Soviets and the Chinese have both demonstrated that there will always be people that seek more and will find ways to get that more even if the system is supposed to be equitable.

The other side-effect of especially the Soviet system is that if one is not in the group that benefits disproportionately, and one sees that one cannot benefit, it's much easier to just stop caring and to let one's self be supported by the dole rather than to apply one's self.

Without cooperation we do not get very far, but without competition we also do not get very far. We have to work collectively to achieve goals, but we have to have incentive to help motivate us to work, and for a lot of people that incentive comes from avoiding abject poverty rather than some special internal motivation to do well.

Part of why I support the progressive income tax (ie, dollar-amount brackets with disproportionally higher and higher tax rates as one moves up the income scale) is because generally the futher up the income ladder people find themselves, the better they are poised to manipulate the system itself. I don't want to see a 91% tax rate for the top bracket like we saw post-WWII, but it is not unreasonable to increasingly tax personal incomes for the superwealthy as they earn more and more money, and for those taxes to pay for the social programs that keep the bottom from falling-out for those worst-off.

Re:"It never happens".

[gnick]

Err....and just why can't they get the education and skills needed to get a job?

Like GP said, maybe they're not capable. Not everyone's born to be an engineer, no matter how much they apply themselves. We try to train everybody for something, but we need some mechanism to employ (or at least feed) people with naturally limited abilities. Maybe telling a 55 year old coal miner that he needs to learn to code or be unemployed isn't practical. This isn't the jungle where we leave the weak to die while the rest of us progress.

Re:"It never happens".

[MickyTheIdiot]

Point missed. What jobs will it make the labor available for? High-end jobs only this time. One of the saving graces of the industrial revolution is that it required more warm bodies than it required skilled labor.

Re:"It never happens".

[boneglorious]

"...for a lot of people that incentive comes from avoiding abject poverty..."

If the fear weren't "abject poverty" but instead "needs to figure out how to feel good about spending their time" because the former were out of the question, the motivation would shift to the latter and that would be better.

Re:"It never happens".

[interkin3tic]

I suspect the finger pointing at "big government regulations" will dramatically increase as right-wing voters lose jobs. The writing on wall that the coal train isn't going to last forever has been there quite a while, and it's not rocket science that natural gas and automation are causing coal jobs to disappear, yet the useful idiot GOP voters of coal country are still convinced it was Obama deciding he didn't like white people.

Repealing protections will only make the situation worse, as will ripping up trade deals.

At some point, the right wing is going to decide that universal income totally fits into their ideology. To pay for it, we'll end social security, all federal funding will be distributed as block grants and left up to the states to allocate to universal incomes as needed, which will in most red states to be tax cuts to the wealthy. Kansas may be spared this as they seem to have already realized again reganomics don't work.

Re:"It never happens".

[queazocotal]

And even if everyone can be an engineer or a programmer - that doesn't help.

Look at for example amazon warehouses.
The algorithms that drive the robots in the warehouse are not going to be done on a local warehouse level, but programmed globally, running on one of a few different platforms.
You can have a smart algorithm that drives robots around, and another smart algorithm that knows how to pack boxes, and suddenly a team of a few dozen has removed the need for many thousands.

Similar or worse gearings happen - facebook, for example has likely killed way more media jobs indirectly simply by taking screen-time away from the media sources, with very few employees.

Apps aren't much help - everyone has 24h a day, and their screen time is monopolised by a handful of apps. The remainder of the market is not significant.

Even if everyone was to become skilled enough for the 'new' jobs that are displacing the old, it doesn't help much, as there are so many fewer of them.

We need to somehow fundamentally re-engineer what 'work' is and how it's paid - the alternatives are very, very bad.

Re:"It never happens".

[Cipheron]

Humans outpace automation because the total labor cost for a human to adapt to a new niche is lower than the total labor cost to use automation to do the same. But ... what if that fact becomes false? The idea of a wage job no longer makes sense from a business point of view. Pointing that out isn't doom mongering or saying progress should end. It's just a reality check, the worst case scenario should be explored and planned for. The other side are saying we shouldn't even think or talk about the possibility.

Re:"It never happens".

[boneglorious]

You're working with a population of people who are either stressed out from work, stressed out from not working, being told that they are worthless and lazy if they don't have a job, being told they will become worthless and lazy if they lose their job.... there's no control group. we're just speculating. Sure, maybe I'm wrong, but maybe you're wrong. Either way, I'd like to find out and then deal with that.

Re:"It never happens".

[Wycliffe]

Also, can't we finally accept that people having to work less could be a feature of more technology, not a bug?

In my opinion, automating away a lot of work and instituting a universal basic income sounds amazing. I'd love to see people freely choosing to spend their time pursuing hobbies, raising their children, pursuing a job out of passion rather than need, getting education, playing games, taking walks in park, reading, watching television, or any of the billion other things that humans can do when we're not chasing paychecks.

I agree that working less should be a feature not a bug. The problem is money and leisure time is not being correctly distributed. The people at the top are working the longest hours, getting the most money per hour, and getting the least leisure time. The people at the bottom are having a hard time even finding full time employment. UBI will not fix this. Even the most generous proposals still have UBI as the bare minimal amount of money to survive. I don't want to live in a country where if your lucky enough to win the "job lottery" then you can live comfortable otherwise you become a ward of the state. We would be much better off if we started reducing the hours the people at the top worked so that some of that work can be done by other people who need the work. Instead of jobs being either "excellent paying but worked to death" or "barely surviving", we would all be better off if the total pay went down a little at the top but the total leisure went up as well. We could start by enforcing the 40 hour work week but going to a 35 hour or even lower work week as automation takes over would benefit everyone. Dropping high paying positions from 40 hours per week to just 38 hours per week (a 5% decrease) should cause a 5% increase in available high paying positions.

Re:"It never happens".

[boneglorious]

In addition to lowering hours, we need to lower wages at the top and raise wages at the bottom.

Look, I'll happily give up on UBI if we instead

1) guarantee full employment
2) divide up the work so nobody is working more than is pleasant
3) acknowledge that raising children is work and merits an income so people who want to can stay home and do it
4) reduce income inequality enormously. I'm sick of the argument that only the owner of the hotel is necessary to running the hotel and should therefore be paid thousands of times what the cleaners make. Hotel room cleaners should be paid enough to live comfortably and have plenty of leisure time.

UBI sounds a lot simpler, and I advocate for more than just the bare necessities to be part of that. People should be able to take part in the gains of society over time with increasing comfort and security.

Re:"It never happens".

[Curunir_wolf]

I suspect the finger pointing at "big government regulations" will dramatically increase as right-wing voters lose jobs.

As well it should. Regulations have strangled the ability of anyone without significant capital or venture capitalist backing to just go out and start pursuing an independent vocation. It's hurting the existing small businesses to prosper and expand. The last few years have been bad for small businesses, which is directly related to why the recovery has been the slowest we've seen US history. The top two reasons small business owners site as the things hurting their business is the cost of healthcare and overly burdensome regulations. There's not just one or two you can point to that cause this: It's the huge volume of regulations that are killing prosperity, mostly propagated by bureaucrats based on some new interpretation, not new laws passed by Congress.

Another example of regulations hurting the economy is Obamacare itself. While it has helped some people get healthcare who otherwise would not have, it has also meant less earnings for the working poor. Businesses had to limit part-time work to no more than 29 hours a week. Even the government of Virginia did that to its workforce, and the Governor of the state is a big Democrat and Obama supporter.

The cost of regulations alone are now the world's 10th largest economy, surpassing the entire economy of India. The Federal Register is the document that is used to publish Federal regulations, not including state and local ones. Just keeping up with them is a big task. At the end of 2016, the number of Federal Register pages stood at 95,894, 19.4 percent higher than the previous year’s 80,260 pages (see Figure 9). This count was President Obama’s highest level, as well as the highest level in the history of the Federal Register. Both 2010 and 2011 had been the all-time record years, at 81,405 and 81,247, respectively. The 79,435 count in 2008 under President George W. Bush holds the fifth-highest title.

I looked into what it would take to set up a food cart on the corner in my town. Just to start required applications, many lengthy, to no less than eight different state agencies and three city departments. The fees were all over the place, some monthly, some annual, and collecting the THREE DIFFERENT "sales" taxes (for each item sold) also required paying a fee for the privilege of collecting the tax from customers and sending it off to the two different treasurers.

Re:"It never happens".

[Obfuscant]

Look, I'll happily give up on UBI if we instead 1) guarantee full employment

Which is equivalent to UBI. What do we do if someone can't find a job they can do? Guaranteed full employment means we create a make-work job for them. How is this significantly different than just handing them money for doing nothing? The costs of the employee will outweigh the money they earn; it will be cheaper to just hand them money. So your condition here is basically disingenuous. You'll stop supporting UBI if there is something just like it under a different name.

2) divide up the work so nobody is working more than is pleasant

I find any work unpleasant. Just hand me money. Bingo, UBI again.

3) acknowledge that raising children is work and merits an income so people who want to can stay home and do it

Paying people to have children has never worked out well for society. Mostly, you wind up with a lot of children being raised by people whose only qualifications are the ability to have children and can do nothing else productive with their lives. Eventually you wind up with a lot of children living upon society's largesse, which their parents will be doing by getting UBI based on having children.

4) reduce income inequality enormously.

So you'll give up on one method of wealth redistribution as long as there is massive wealth redistribution.

I'm sick of the argument that only the owner of the hotel is necessary to running the hotel and should therefore be paid thousands of times what the cleaners make.

Good thing that that's not the reason. The owner is taking the risks. That deserves a payback. But let's look at your hyperbole for what it is. A worker doing a 40 hour week at minimum, two weeks off, is making at least, umm, 2000 hours times $7.50, $15,000 a year. "Thousands of times" would be, at a minimum, 2000 times, or $30,000,000 per year. Very few "hotel owners" make that kind of salary. You can't pull $30mil out of a hotel and have it still make a profit. MAYBE some CEO of a major hotel chain -- hundreds of hotels -- might make $1mil, but that's because they are running a major corporation, a task that very few "hotel room cleaners" would be able to do.

And when you compare the costs of failure for a major hotel chain CEO vs. room cleaner, the disparity in income becomes more reasonable. A "room cleaner" who fails costs the chain a few customers, perhaps, the time of a supervisor who has to fix the issues, probably. A CEO who fails costs a large number of stockholders a lot of money -- pension and retirement funds, for example -- along with a lot of jobs when the chain goes bankrupt.

Hotel room cleaners should be paid enough to live comfortably and have plenty of leisure time.

Hotel room cleaners should be paid based on the value of their work to the company.

UBI sounds a lot simpler, and I advocate for more than just the bare necessities to be part of that.

I demand a universal basic income, as long as it isn't just a basic income...

People should be able to take part in the gains of society over time with increasing comfort and security.

Without having to contribute anything to those gains at all. Where does the gain come from when there are few, if any, people creating that gain?

Re:"It never happens".

[swillden]

It isn't until after they actually lose their jobs that the economic consequences will be felt, and only then will anything meaningful happen.

That doesn't mean it isn't a good idea to be thinking / planning / experimenting now, so that if / when that occurs we can act based on data, rather than randomly.

Never Happens (Till it Happens)

[DumbSwede]

As they say in the stockmarket:

Past Performance Is Not An Indicator Of Future Results

Educating our general populace to a higher degree will help, but at some point the knowledge curve will be too steep for most people to get educated enough to get a job that really adds to production. There will be jobs gains for sure from new and novel activities, but I'm willing to bet starting in 5-10 years job destruction will far outpace job creation. You really think all the truckers in America are going to become coders or entrepreneurs?

Re:Never Happens (Till it Happens)

[bluefoxlucid]

Past performance is an indicator of future results. The problem is people interpret results poorly.

I keep repeating this: technical progress increases wealth by reducing costs. Costs are ultimately wage-labor. There's one sustainable way to reduce cost: reduce the wage-hours invested in producing a thing.

Each technical improvement first eliminates some jobs. That gives you transitional unemployment. Lower costs mean lower viable prices, which draws luxury goods down into wider markets: it costs little enough for you to target 100,000,000 middle-class consumers instead of 1,000,000 upper-class consumers, you can price it low enough to target a bigger market. That means either current producers or new competitors will try to take the market and make a bigger profit by lowering prices.

Once prices are sufficiently-low, a good is just a consumer good. Everyone has smart phones now--even poor people--so we compete on price at the bottom and on the spread of prestige across income classes. We have economy cars and luxury cars. The lower-class goods have slimmer margins to try to capture the wider market; as costs come down, we start packing more features into these goods, reducing their price, or both.

So, what happens with those lost jobs?

More features means applying more labor. If you cut costs and then increase features rather than lowering price at a certain market level, then you've invested your displaced labor into producing more stuff--each of those new feature components requires labor, and you shift it from the now-cheaper components to the previously-not-incorporated components.

If you're not boosting features, then you're competing on price to capture those low-end markets. Prices come down in terms of labor-hours--that is to say, prices increase more-slowly than wages for non-changing goods as those goods become cheaper to make. The most extreme form of this is prices decreasing.

Examples?

Cars and phones pack more features into roughly the same price or the same proportion of spending (people tend to expend the same percentage of their income on cars; phones tend to keep at the $350, $500, or $900 price points and pack features, rather than inflating). Hard drives and SSDs tend to fall in price per gigabyte; we see hard drives in particular shipping ~$100 units that keep increasing in capacity (500GB a decade and some ago, several TB today).

Food and clothing increase in dollar-price, but more-slowly than inflation (median household expends 33% of its spending on food in 1950, 12.5% today; 12% on clothing in 1950, 3% today).

New technologies outright fall. Cell phones were available for $4,000 in 1983; small hard drives used to cost hundreds of dollars; and new types of display panels come out at multi-thousand-dollar price ranges for a given size and then fall to a few hundred. SSDs also generally sell by size, and so the 32GB, 64GB, 128GB, 256GB, 512GB, and 1TB models keep falling in price, instead of simply changing the available capacities at a price point as with hard drives.

When the proportion of spending on the same goods falls, consumers have more money. They spend that money on new goods. That requires shipping, retail, and other logistics, all domestic; it also requires manufacture or service provision, which may be domestic or import. This is where new jobs are created.

Caveat: Transitional unemployment means exactly what it says. You eliminate jobs with technology, you need to wait a while for the markets to move around and create new jobs. There aren't new jobs waiting for these people; if there were, we wouldn't have 5% unemployment.

That means, yes, technology eliminates jobs; and, yes, technology creates new jobs. They're in proportion, and there's a lag between them. Both sides are arguing from one absolute, and so both sides are wrong; both sides also typically make ludicrous assertions, like the job-creation assertion that 1 human is replaced with 1 machine

It's already happened

[rsilvergun]

there were decades of unemployment and social strife during the industrial revolution before tech caught up (and wars thinned the herd) and we returned to near full employment.

Also, everything he described was infrastructure bought and paid for by tax dollars. Folks don't want to pay those taxes anymore and the infrastructure spending has more or less stopped. The build out of suburban America was financed by tax payers. They paid to pave the roads, run electricity, phone & internet, etc ,etc. They're done. They don't want to pay anymore.

Re:It's already happened

[liquid_schwartz]

Also, everything he described was infrastructure bought and paid for by tax dollars. Folks don't want to pay those taxes anymore and the infrastructure spending has more or less stopped. The build out of suburban America was financed by tax payers. They paid to pave the roads, run electricity, phone & internet, etc ,etc. They're done. They don't want to pay anymore.

As near as I can tell my taxes haven't fallen much. What has changed is that taxes on the 1% have fallen dramatically due to tax cutting, shifting things to capital gains, tax shelters, and keeping money overseas. What has also changed is that a dramatic drop in the middle class has meant that less taxes are paid by many people as they simply make less. If a greater share of the total income was taxed at middle class rates it would be a windfall for government coffers.

Re:It's already happened

[MickyTheIdiot]

Not to mention that the post-WWII boom was at least partially due to the investments the US made in its people, especially through instruments like the GI Bill. A lot of that was paid by taxes on the upper-income brackets. We have a government culture where policy is set by the highest bidder and proper taxation is nearly impossible because of it. Tax the rich (not even at post-WWII which were arguably too high) and actually fix our infrastructure and we have a good start at makeing the landing a little softer.

Re:It's already happened

[drinkypoo]

Yet they *still* pay approx half the taxes in the US....so, you're saying they should pay 3/4 of all taxes...or maybe all of them?

If they are receiving 95% of the benefit, they should pay 95% of the taxes. We can argue about what percentage of the benefit they are deriving now, but if you measure it in dollars, it's way over 3/4 of the total. Also, if you accept the argument that forcing people to pay taxes on necessities is slavery, then it's obvious that a whole lot of people should pay no taxes at all. If the super-wealthy want the rest of us to shoulder more of the tax burden, then they can share more of the profits. If they don't want to share with us at all, then they're going to have to exterminate us, but a) that may turn out to be harder than they expect and b) if you eliminate all the weirdos then you eliminate all the culture and then you will have to create more weirdos, it's much more efficient to learn to live with them instead.

Re:Is there a 'Laffer Curve' for robotics?

[jcr]

The Laffer Curve for taxation is mostly just a fraud used to justify low taxes on high earners.

What's your next guess, sparky?

Rich people aren't a stationary target. The higher you set the tax rate, the more effort they'll put into fighting back.

-jcr

Re:Health savings

[gfxguy]

Perhaps the healthcare savings from the ~40 million people per year injured in car crashes, and their increased productivity and incomes, will create a lot of jobs. Plus the 1.3 million people who die every year in car accidents are able to buy nothing currently, and will become active consumers.

It seems like now you are just losing jobs in the healthcare industry. You know how we often discuss taxes here, and some states are net givers, and some states are net takers? If you look at individuals, most are net takers. I'm not suggesting I want people to die, I'm merely suggesting that it doesn't really help the economy, on the whole, that this small fraction of people doesn't die. I do disagree with Marc, though, if only because I can't see where all the new jobs are supposed to come from. The roads are already there, the manufacturing is already there, the movie theaters are already there. Self driving vehicles won't increase the demand for those things.

I do see a LOT of benefits to the ubiquitous use of self driving cars... the flow of traffic will improve, saving people time and money. The number of accidents should drop to nearly zero, saving lives, consumers saving money on insurance, a decline in the need for lawyers (two thumbs up!) and less tying up our court systems with stupid traffic violations. Perhaps having more leisure time and money will increase consumer spending, and that's OK, but I do not think you completely cover all the lost jobs. You will need fewer people working for the insurance companies, you will need fewer body repair shops, much less towing of damaged vehicles, less demand for replacement parts... I personally can't wait for the benefits I will see; however, while it might just be a shortcoming on my part, I don't see the benefits to the economy as a whole - I see more negatives than positives in that respect.

The Problem of Labor

[Bruce Perens]

Consider that automation could eliminate a great many jobs, leaving only a market for people who can teach the automation new things or do jobs that automation is simply not suited for because they have a "human" element which is essential to them. Consider that this might really eliminate the jobs that are all that 50% of people are capable of for good.

This gives us two choices: provide a basic income, or let all of those people starve and die.

There is going to be a very strong political force on the "starve and die" side. Not that I like it. I bet there are lots of people right here on Slashdot who would argue for it.

Re:The argument has merit, but I think it is wrong

[bluefoxlucid]

We're not replacing 100% of all human operations in any productive pipeline with non-human operations, so that is still the case.

Marc Andreessen

[Pfhorrest]

I find it weird that Marc is described simply as a "Silicon Valley investor", like he's just one of innumerable rich people interested in tech, instead of describing him as the founder of Netscape, who first brought web browsers to the masses, which seems like the much bigger deal if you're going to say who he is and why anyone should care about his opinions.

Re:It's a bug, not a feature. UBI will not fix it.

[boneglorious]

What UBI assumes is that:

1) All members of society should share in productivity gains.
2) Working for someone else isn't the only way of being productive.
3) Money isn't the only --- or the best --- way of attaining status or self-worth.
4) Most humans have a desire to be productive in some way, and that desire can best be fulfilled in a self-directed manner.
5) There's plenty of fulfilling work available, even if that's just participating in vibrant relationships and communities and taking care of our homes and our hobbies; we don't have to make work as if we were in 2nd grade and the teacher needed a break so he or she gives us those busy-work assignments most of us hated.

Re: It's a bug, not a feature. UBI will not fix it

[boneglorious]

The few who control the wealth right now already DO see low-wage workers as resource leeches, and they've pulled the wool over the eyes of most other people. That's an attitude that has to change. The attitude is the bug of the current economy.

Re:It's a bug, not a feature. UBI will not fix it.

[Shotgun]

And those assumptions can be categorically dismissed by observing communities where three generations have lived on welfare. It seems that UBI is pushed by people who have never spent significant time in these sort of communities.

There's an America outside Silicon Valley

[Cid Highwind]

"The jobs crisis we have in the U.S. is that we don't have enough workers,"

Oh, bullshit. The jobs crisis you have in the Bay Area tech bubble may be that you don't have enough workers (who are under 30, with Stanford CS degrees, and don't mind 95 hour work weeks and living 8 to an apartment), but the jobs crisis the rest of the country has is that the market wage for someone who graduated from high school 20-30 years ago and didn't finish college or reach master status in a trade is rapidly approaching zero.

Re:Then the economists are wrong.

[king neckbeard]

>And that will result in a lot of them realizing that they are working 40 hours a week to get an income after taxes that is the same as (or less than) the free money everyone else is getting. It would have been simpler to just state that you don't know how tax brackets or UBI work at all.