I wrote a bit last week about what the developing electric-vehicle sector might mean for job creation. We have, after all, been told that decarbonization of the economy is going to generate lots of new jobs. I’m not convinced, particularly, as I noted last week, when it comes to net job creation. To be sure, the transition away from greenhouse gases ought to create quite a large number of new jobs for regulators, lawyers, and all the rest, and maybe even some well-paid blue-collar jobs too, but it will also cost jobs. The classic example of that, of course, will be in the oil and gas business, but, as discussed last week, electric vehicles are going to represent a significant challenge to existing auto companies (and the companies that supply them) and a significant opportunity for manufacturers in China, not least because of how (relatively) easy it is to manufacture EVs.
Here’s part of a passage I quoted from the Financial Times:
The drive train of an electric vehicle . . . is extraordinarily simple: a battery, a motor and not much else. Production of the crucial component, the battery, is a business of huge scale and thin margins; the economics are similar to another green technology, the solar panel. Assembly of electric vehicles needs some of the skills of traditional carmaking, but bears comparison as well to other electrical goods. Solar panels and consumer electronics are industries where Chinese manufacturing dominates on cost.
Well, if they are simple to make, how difficult can they be to repair?
The pungent odor of motor oil and grease wafts through the air at JR Automotive in San Francisco as Jesus Rojas lifts the hood of a 2014 Honda Civic to inspect its engine.
Gasoline-powered vehicles like this one have hundreds of moving parts and other components that keep mechanics like Rojas busy. Rojas, 42, has spent much of his life refining the specialized skills needed to inspect and repair them.
But as California switches to electric vehicles in its battle against climate change and air pollution, these skills will be needed less and less over the next decade. By 2040, the state projects that nearly 32,000 auto mechanics jobs will be lost in California, since electric vehicles need far less maintenance and repair than conventional combustion engines. . . .
The trade provides a steady and reliable income in California for many workers with no college degree. On average, mechanics across the state earn about $26 an hour or $54,190 a year, according to the U.S. Bureau of Labor Statistics. . . .
Electric cars have fewer fluids, such as engine oil, and fewer moving parts than a conventional car. Brake systems also last longer because of regenerative braking, which converts energy from the brake pads into electricity to recharge the battery, according to the U.S. Department of Energy. They also don’t have mufflers, radiators and exhaust systems.
California currently has around 61,000 auto-service technicians, so over time, that’s an attrition rate of more than 50 percent.
According to the BLS, around 630,000 auto-service technicians were employed in the country as a whole in May 2021. So, assuming that most states, particularly the larger ones, follow California’s example in squeezing out and ultimately banning the sale of new vehicles powered by internal-combustion engines, that could be over 300,000 jobs lost. Admittedly those job losses would be phased in over time, but they are likely to be lost in a period when economic growth will (in my view) be significantly held back by the energy transition, which is, after all, not a response to consumer demand but a mandated top-down change, not typically the best way of creating good new jobs.
There is also (and again, in my view) the threat to the labor market posed by the ever-increasing encroachment of automation/AI. Certainly, technological transformations have always created more jobs than they cost, but that word “always” says nothing about the delay between the loss of old technology jobs and the creation of new work to replace them. Those interested in the topic ought to take a look at the (contested) “Engels’ pause.” To pessimists (and that would include me), it is a less than reassuring precedent.
LAist:
Throughout the [Californian] economy, an estimated 64,700 jobs will be lost because of the [anti-internal-combustion-engine] mandate, according to the California Air Resources Board’s calculations. On the other hand, an estimated 24,900 jobs would be gained in other sectors, so the estimated net loss is 39,800 jobs, a minimal amount across the state’s entire economy, by 2040.
Maybe that’s not an enormous figure, but it is still a net loss. No matter, green jobs created elsewhere will more than cancel it out!
Won’t they?