Obama, ATM’s, Internet, and Jobs

“Layoffs too often became permanent, not part of the business cycle. And these changes didn’t just affect blue collar workers. If you were a bank teller or a phone operator or a travel agent, you saw many in your profession replaced by ATMs and the internet,” – President Obama

It’s all the internet’s fault!

This is an old quote from the summer, but reading it yesterday on The Facebook made me want to resurrect it once again.After doing some research, the references towards this line are primarily conservative blogs mocking Obama for ‘blaming’ the economy on ATM’s and the internet. Which is just a cheap political shot and distorting what he said. To break it down, first Obama is not blaming unemployment on anything in particular. He is discussing one hurdle among several, that need to be addressed when facing a depression and a series of massive layoffs. He didn’t say, “This is why the unemployment is high”, he said “This is one issue we need to address to handle unemployment”. I think this is something we would want our president to discuss and think about when trying to decide policy.

What he is referencing, is something I believe higher schoolers taking Economics 101 could agree with:

  1. The demand of the job market is constantly in flux.
  2. Technology affects the demands of the job market.
  3. People who are laid off, won’t necessarily be rehired in those same jobs.

This is why whenever you read any decent article on economic recovery or lowering the unemployment rate, you’ll often hear about “retraining”, as one way of helping recovery to meet the changing demands of the job market. With technology, many jobs are obsolete, move to different sectors, or require different training.

I know that several of my previous positions, no longer exist or the demand for them has gone down dramatically. In college, I worked as an operator for the deaf and hard of hearing, a job that’s more frequently being replaced by the common usage of smart phones and technologies using webcams to help ASL users sign directly. When cuts are needed, it’s obvious that the operating staff will be the first thing cut.

In another position, I used to do a lot of paperwork for expense reports, trip itinaries, typing and printing physical letters, all of which been replaced somewhat by processing through the internet and email. When I left that position, since efficiency in is the new priority, they decided they didn’t need to hire someone to fulfill this role any longer.

You can see this with almost any industry. Look at the car industry, poor profits (which turns out happens during a recession), lead to layoffs, and the increased use of robotics in car manufacturing, means that many of those people will never be hired back. These are all standard economic concepts, of which, suddenly conservatives want to mock as a non-issue?

Now, I will agree with The Economist and Marketwatch, that the ATM example (which is all it was, an example to a larger point), is a rather poor one, but the logic beyond that is quite sound.

p.s. I also agree with The Economist that, voters, particularly conservatives will cheekily blame him regardless of economics or facts.

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