In the original post I wrote, “[this blog] will cover the shifting nature of work brought about by technological disruption. Financial defense now is critical to prepare for a future of disparate employment, declining pensions, and deterioration of the traditional concept of career.” Beyond the many of the benefits financial independence brings about, fear of this change is an equally motivating factor to pursue financial independence.

The deterioration of the traditional concept of career is particularly concerning. The sharing economy and how it downgrades the value of labor in the United States. Industrial automation and the elimination of millions of blue-collar jobs. How gig work subjects workers to technologically enabled inequality and a faulty social safety net. 

You might be asking yourself, “but Mr. FIRE Power, what does all this have to do with financial independence? I didn’t come here to read about your views on the future of work.” Well, dear reader, financial independence is our insurance against a future of unpredictable work and benefits. Allow me to explain.   

A little background

The future of work is not something that always troubled me. But in January 2017 I attended a large multilateral event, the B20 meeting in Hangzhou China.

The event was high level. Multiple country presidents sat on panels to discuss and analyze the increasingly strident global rhetoric against trade and globalization. Across panels, a consensus emerged that industrial automation, advances in the digital economy, and technological change would lead to the elimination of a large number of low-skilled jobs. News to me.

One example that resonated with me was on the topic of autonomous driving. At the time, I had heard the term autonomous driving and understood it to be something about robots and self-driving cars. The B20 unlocked for me the implications of how many jobs would be lost when cars drove themselves.

Think about it for a moment. Have you ever considered how many jobs are tied to driving? Take a look at the chart below. Excluding some of the catch-all categories, the most common job in most of America is truck driver. In 2018, 3.5 million American’s were employed as truck drivers. Add in the million or so delivery and taxi drivers and thats about 3 percent of the entire American workforce

When will vehicles drive themselves?

Depending on the vehicle category, autonomous driving is anywhere between a few years and a decade away. Trucking, because it occurs on long uniform stretches of highway, is an ideal industry to automate. Autonomous long haul trucks should be traveling American roads before 2025. At that point, 3.5 million drivers will begin a gentle journey to obsolescence. These jobs will not be eliminated overnight, but slowly as the technology improves, fewer drivers will be needed.

An optimist will argue that these unemployed workers will transition to new, as-yet-unconcieved positions in the workforce of tomorrow. When technology destroys jobs, workers will just find new ones.

The B20 discussions tried to get at this topic. Solutions such as education and worker retraining were proposed.

Worker retraining will be critical to equip those displaced by innovation and productivity increases. Unfortunately, few programs to date have been successful because of two under appreciated facts: (1) workers are broadly unwilling to move to where jobs are plentiful and (2) reequipping a low-skilled laborer with the tools to code or program is fanciful in most cases.

Education was cited as necessary to equip the next generation with the tools necessary to succeed. However, the skills necessary to succeed (engineering, computer science, math, etc.) are difficult to develop. Millions of these jobs sit open today, there just is not enough qualified labor to fill the rolls.

The key point

For me, the most insightful comment of the event came from South African President Jacob Zuma. He offered the most honest assessment I’ve heard on the disruptive qualities of automation on governments and society.

He said the direction the world is moving will lead some workers to be permanently unemployable. Their jobs will be eliminated. They will be unable to develop new, marketable skills. They will never return to the workforce.

This is where fear enters the picture. This scenario implies a small proportion of every population will need some long term support from the state. That group will favor increasingly more generous entitlement programs. In democratic societies, it will vote for candidates who support progressive causes that expand the social safety net.

What about financial independence?

The example above is easy to grasp. Most truck drivers do not require a college education. Elimination of those jobs might not be all that surprising, just an inevitable evolution of working class jobs of the future. The problem is that automation is not restricted only to driving or automated production. Along with artificial intelligence, automation will replace dozens of white collar jobs in the future. Financial analysts, accountants, journalists, all will be see technology erode the traditional definition of work.

With this future on the horizon aggressively pursuing financial independence now offers a personal safety net against the volatility of the future. Instead of losing your job to a robot, save 70 percent of your salary and you will have enough saved to retire in 8 years. Remember the chart below?

Hopefully some food for thought.