Later On

A blog written for those whose interests more or less match mine.

Larry Summers: The robots are coming, whether Trump’s Treasury secretary admits it or not

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I have to admit that I was taken aback by Treasury Secretary Steven Mnuchin’s casual dismissal of the impact that automation will have on jobs. Can he really be that ignorant? Self-driving cars seem to be at most 5 years away, and very soon after we will have self-driving long-haul trucks (and I bet they are already being designed), which will take over millions of jobs.

From TruckInfo.net:

How big is the trucking industry?
The trucking companies, warehouses and private sector in the U.S. employs an estimated 8.9 million people employed in trucking-related jobs; nearly 3.5 million were truck drivers. Of this figure UPS employs 60,000 workers and 9% are owner operators.  LTL shippers account for around 13.6 percent of America’s trucking sector.

How many trucks operate in the U.S.?
Estimates of 15.5 million trucks operate in the U.S.. Of this figure 2 million are tractor trailers.

How many truckers are there?
It is an estimated over 3.5 million truck drivers in the U.S.  Of that one in nine are independent, a majority of which are owner operators. Canada has in excess of 250,000 truck drivers.

3.5 million jobs would, one thinks, get the attention of the Treasury Secretary, recall that he’s a Republican, the party that chooses creationism over evolution and denies climate change.

Lawrence Summers writes in the Washington Post:

As I learned (sometimes painfully) during my time at the Treasury Department, words spoken by Treasury secretaries can over time have enormous consequences, and therefore should be carefully considered. In this regard, I am very surprised by two comments made by Secretary Steven Mnuchin in his first public interview last week.

In reference to a question about artificial intelligence displacing American workers,Mnuchin responded that “I think that is so far in the future — in terms of artificial intelligence taking over American jobs — I think we’re, like, so far away from that [50 to 100 years], that it is not even on my radar screen.” He also remarked that he did not understand tech company valuations in a way that implied that he regarded them as excessive. I suppose there is a certain internal logic. If you think AI is not going to have any meaningful economic effects for a half a century, then I guess you should think that tech companies are overvalued. But neither statement is defensible.

Mnuchin’s comment about the lack of impact of technology on jobs is to economics approximately what global climate change denial is to atmospheric science or what creationism is to biology. Yes, you can debate whether technological change is in net good. I certainly believe it is. And you can debate what the job creation effects will be relative to the job destruction effects. I think this is much less clear, given the downward trends in adult employment, especially for men over the past generation.

But I do not understand how anyone could reach the conclusion that all the action with technology is half a century away. Artificial intelligence is behind autonomous vehicles that will affect millions of jobs driving and dealing with cars within the next 15 years, even on conservative projections. Artificial intelligence is transforming everything from retailing to banking to the provision of medical care. Almost every economist who has studied the question believes that technology has had a greater impact on the wage structure and on employment than international trade and certainly a far greater impact than whatever increment to trade is the result of much debated trade agreements.

As for the secretary’s questioning of tech company valuations, . . .

Continue reading.

Written by LeisureGuy

27 March 2017 at 11:51 am

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