06.15.2011 0

Obama Blames Efficiency As Cause of High Unemployment

Obama Blames ATM's for High UnemploymentIn a strange response in an interview conducted by NBC, Obama blamed modern technology, even specifically blaming ATM’s at banks and ticketing kiosks at airports, as causes of the high rate of unemployment in America.

Obama stated, “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.”

The misguided notion that innovation towards more efficient ways of conducting business causes higher rates of unemployment is startling.

Looking at Obama’s examples, he is wrong on several counts (there is even more, but I will keep this brief).

First, ATM’s require maintenance as well as manufacturers to produce them. ATM’s don’t appear out of thin air, and the money has to get inside of it somehow. As a former bank teller, I can tell you that maintaining an ATM is a lot of work. Professionally trained maintenance crews routinely travel from bank to bank servicing these expensive machines. The creation of the ATM has led to the creation of these jobs that would otherwise not exist. Further, bank tellers inside the branch have to be well versed in ATM knowledge so that they can properly maintain it.

Second, all Obama is looking at is what he can physically observe. He is completely ignoring the unseen consequences of certain actions. Sure, we would have more people doing specific tasks if we got rid of certain technologies. For example, if we got rid of the computer, there would be an increased demand for secretaries to serve the role that computers have in the office place. But computers have led to an increased level of wealth and prosperity as they have proved to be more efficient than having a bunch of secretaries performing those tasks. Computers are cheaper than secretaries, and faster. Why would a company handicap itself by choosing less efficient ways to conduct business? Does Obama feel guilty every time he uses his cell phone to send an email instead of hand writing a letter and mailing it to the recipient?

Third, throughout history society has innovated. Many tasks that required significantly more people to perform centuries ago have been replaced by new technology that has led to those human resources being directed elsewhere. As Don Boudreaux blogged about in his open letter to Obama on this matter, he imagined what previous Presidents may have said if they were in a similar interview:

Pres. Grant, for example, might have grumbled in 1873 about “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 that uses a modern safe and so employs fewer armed guards than before, or when you travel on trains which, compared to stage coaches, transport many more passengers using fewer workers.”

Or Pres. Nixon might have groused in 1973 about such labor-saving innovation: “You see it when you step into an automatic elevator that doesn’t require an elevator operator, or when you observe that polio vaccination keeps people alive and active without the aid of nurses and all those workers who were once usefully employed making iron-lung machines, crutches, and wheelchairs.”

ATM’s and kiosks at airports are no more to blame for higher unemployment today than the manufacturing of automobiles that put the stagecoach/wagon industry out of business. Somehow, unemployment rates adjusted with time as people redirected their labors to more useful efforts.

UPDATE: A commenter on our Facebook page brought up a great point, which is that high minimum wages would also lead to higher unemployment. As it becomes more expensive to employ people, less people are employed. So when Obama uses his logic on ATM’s, perhaps he should apply it to some of the policies that he champions.

Adam Bitely is the Editor-in-Chief of NetRightDaily.com. You can follow Adam on Twitter at @AdamBitely.

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