Thursday, December 8, 2011

Why does Obama think ATMs take jobs away from bank tellers?

President Obama said in his recent speech in Kansas:

Over the last few decades, huge advances in technology have allowed businesses to do more with less, and made it easier for them to set up shop and hire workers anywhere in the world. And many of you know firsthand the painful disruptions this has caused for a lot of Americans. . . .

If you were a bank teller or a phone operator or a travel agent, you saw many in your profession replaced by ATMs or the internet. Today, even higher-skilled jobs like accountants and middle management can be outsourced to countries like China and India. And if you’re someone whose job can be done cheaper by a computer or someone in another country, you don’t have a lot of leverage with your employer when it comes to asking for better wages and benefits — especially since fewer Americans today are part of a union.

Now, . . . there’s been a certain crowd in Washington for the last few decades who respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If only we cut more regulations and cut more taxes — especially for the wealthy – our economy will grow stronger. Sure, there will be winners and losers. But if the winners do really well, jobs and prosperity will eventually trickle down to everyone else. . . .

It’s a simple theory – one that speaks to our rugged individualism and healthy skepticism of too much government. It fits well on a bumper sticker. Here’s the problem: It doesn’t work. It’s never worked.
If you're going to make such a stark claim and phrase it in pragmatic terms of what has "worked," you should at least make sure the facts are on your side with respect to your own specific examples. But Matthew Yglesias disproves Obama's claim about ATMs replacing bank tellers with one simple chart (from this site):

Yglesias explains:
[I]t's true that since the recession started, we've seen fewer people on the job as tellers. But that's not a decades-long technologically induced trend. It's a recession. The [U.S. Bureau of Labor Statistics] continues to project long-term growth in the number of bank tellers presumably because banks like to open branches to attract deposits. It's true that bank tellers as a share of the labor force should shrink but that's different. Banks are doing more with a little bit more, not doing more with less.
The relatively trivial point is: why didn't Obama have anyone fact-check his speech?

More importantly, this exemplifies Obama's attachment to left-wing ideology. He has faith that technological progress destroys jobs, so it doesn't matter what the statistics say. If you believe that advances in technology are actually setbacks to society, then it's easy to believe that the whole idea of an efficient free market doesn't make sense. That is a hugely consequential error about economics for the president to be making, and it goes far beyond whether he knows the right statistics about bank tellers and ATMs.


Jason (the commenter) said...

And don't forget, Obama has people to do his baking for him. It's the regular people who are supposed to forgo the convenience of an ATM and stand in line at the teller, for the greater good.