Wednesday, August 18, 2010

Job Losses to Come

The top three political and economic issues of the day are job, jobs, and jobs. Some economists are concerned that technology and outsourcing will keep many jobs from coming back and unemployment high in the U.S.

Consider Battery Electric Vehicles (BEVs). High cost and limited range make BEVs a poor substitute for gasoline- and diesel-powered vehicles. But as cost comes down and technology improves range, BEVs will have two advantages over internal combustion engines: lower operating costs and zero tail pipe emissions.

Consider the following numbers. The U.S. Census Bureau and the Bureau of Labor Statistics reported that 763,700 persons were employed as automobile service technicians and mechanics in 2008. Motor vehicle and parts manufacturing employed 877,000 in 2008, but this number is forecast to decline 16.3% by 2018 due to automation, robotics, and efficiency gains. Gasoline stations employed 927,000 paid employees in 2002. There is likely some overlap between the first and third categories.

BEVs production and maintenance are simpler and require fewer employees. The vehicles employ a gearless or single gear design. They have few moving parts which are vulnerable to wearing out. The electric motor has one moving component, whereas the drive train of an internal combustion engine has a lot of moving parts in the engine, transmission, and gearbox. Maintenance of a BEV requires replacement of a battery every seven years or so, but otherwise is simple and inexpensive. In contrast, annual maintenance of an internal combustion vehicle requires spark plug, more frequent oil changes, and numerous other parts and repairs.

The bottom line is that the gradual replacement of internal combustion vehicles with electric vehicles means that fewer workers will be required to manufacture and service BEVs. Most of the lost jobs will never come back. Other potential losses may occur in the oil business and related industries. New green/electric jobs will offset some oil-job losses, but the new industries are likely to be more efficient and demand higher educational qualifications.

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