Fact Check: Are there really less Bank Tellers since ATMs The Economist. takes Obamanomics to task
IN an interview on NBC News, Barack Obama used the example of ubiquitous automatic teller machines to illustrate how technological progress is allegedly impeding job creation:
There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.
This got right-of-center bloggers linking gleefully to Bastiat and Hazlitt’s classic debunkings of the hoary fallacy that machines create unemployment, and started a minor Twitter meme mocking the idea that ATMs are taking our jobs. As it happens, theory and reality agree in this case. ATMs have not in fact displaced bank tellers. According to this 2004 Charles Fishman article in Fast Company:
At the dawn of the self-service banking age in 1985, for example, the United States had 60,000 automated teller machines and 485,000 bank tellers. In 2002, the United States had 352,000 ATMs—and 527,000 bank tellers. ATMs notwithstanding, banks do a lot more than they used to and have a lot more branches than they used to.
More recently, the Bureau of Labour Statistics reports there were 600,500 bank tellers in 2008, and the BLS projects this number will grow to 638,000 by 2018. Mr Obama clearly picked a poor example. It’s worth noting that the advent of the ATM also created demand for ATM maintenance workers. According to the BLS, there were 152,900 “computer, automated teller, and office machine repairers” in 2008. I’m not sure how many of these are in the ATM repair biz, but the BLS expects a mild decline in this line of work due to increasingly reliable machines and declining replacement costs. Evidently, the relationship between technological advance and employment is complicated.
In a recent post, Karl Smith clearly encapsulates the basic economic logic of the relationship between machines and workers:
Typically we think of [capital and labour] as complements.
Lets take some obvious examples. Suppose to create welded metal I need both a welder and welding torch. The welding torch goes down in price. That means that its actually cheaper to create each piece of welded metal. This will allow me as a factory owner to either lower my price, [or] sell more welded metal while maintaining my profit margin.