President Obama: An Economic Reality Fact Check

In an interview this week on the Today show, Ann Curry asked President Obama why he hasn’t been able to convince businesses to hire more people. She cited a New York Times article which stated that since the recovery, companies have spent only 2 percent on hiring, but 26 percent on equipment.

Here is the president’s answer:

"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. All these things have created changes in the economy…."
The way I hear him, self-service convenience devices are a reason we have fewer jobs.
A casual survey of the real world reveals that there are thousands of people who have jobs today because of the existence of ATMs and kiosks.

When you look at the entire industry chain – the manufacturers, processors, networks, financial institutions, deployers, cash providers, servicers, refurbishers, software providers, content creators, accessory sellers, and yes, even the regulators – we have created the equivalent of a small city of jobs.

Since when did the installation of airport check-in kiosks cause a ripple effect of layoffs? On the contrary, these machines have improved service, created a more efficient boarding process and provided a better overall customer experience. All good for business. Not to mention, a cause to hire people to support the machines and spend money with vendors.

The statement that struck me as the most uninformed was the president’s implication that ATMs have caused a loss of teller jobs.

According to the U.S. Bureau of Labor Statistics, the number of tellers employed by banks has grown from 453,150 in 1999 to 556,320 in 2010. That’s more than 100,000 new teller jobs in the past 11 years.

The FDIC reports that U.S. bank branches grew from 81,444 in 1992 to 99,109 in late 2010. While many bankers in the late '60s feared they would have to lay off tellers and close branches because of this new-fangled self-service machine, the opposite has in fact happened.
This has created more than just teller jobs – FDIC data states there were 1.8 million full-time bank employees (not to mention those in credit unions) in 1992. That number grew to more than two million in 2010, even with the layoffs during the financial crisis of the past few years.
The approximately 400,000 ATMs in the U.S. have further fueled economic growth by giving people access to their cash in the places where they spend it. What would happen to the retail industry – and the economy – if all the ATMs were pulled out of U.S. stores?

If we are to blame job loss on technological advancement, we must blame the mobile phone for a loss of jobs in the payphone industry. But I’m sure the 40,000 attendees and several thousand exhibitors at the CTIA Wireless show in Orlando earlier this year weren’t longing for the good old days.

Tom Harper