Struggling to explain the nation’s weak economic performance in an interview for NBC’s “Today Show,” President Obama said there were “structural issues with the economy. … You see it when you go to a bank you use the ATM, you don’t go to a bank teller.” Obama may think automated teller machines are bad for the U.S. job market, but don’t tell that to the thousands of employees of Diebold Inc.
Founded in 1859 by German immigrant Carl Diebold, the company shared a similar history over the next century with its rival, Mosler. Both companies were based in Ohio and built successful businesses making safes and other security products. But their paths began diverging in the early 1970s, when Diebold dabbled in the nascent ATM business.
Four decades later, ATMs account for roughly 75 percent of Diebold’s business, which reported $2.8 billion in sales last year. Diebold is the nation’s largest ATM producer, with most of its 7,000 U.S. employees working in the ATM division — making the machines at their plant in Greensboro, N.C., servicing, maintaining and marketing them.
Mosler never got into ATMs. After 134 years in business, they declared bankruptcy in 2001. Diebold spokesman Mike Jacobsen told me that Diebold could have shared its fate, if not for the new technology.
That should serve as the first hint that ATMs are job creators, not job killers. But the even more obvious problem with Obama’s statement is that it isn’t even factually correct to say that ATM machines displaced bank tellers. The number of ATMs more than doubled between 1998 and 2008, from 187,000 to 401,500, according to the American Bankers Association. Yet data from the Bureau of Labor Statistics show that during the same period, the number of bank tellers rose from 560,000 to 600,500. BLS expects “favorable” job prospects for bank tellers over the next decade.
John Hall, a spokesman for the American Bankers Association, explained that when ATMs started being used more widely, there was a lot of talk about them eliminating human bank branches, but it turned out that customers wanted both. The number of bank branches in the United States has grown from 81,444 in 1992 to 99,109 by late 2010, according to the Federal Deposit Insurance Corporation. During that time, the total number of bank workers rose from 1.8 million to more than 2 million.
The proliferation of ATMs, meanwhile, has created jobs at businesses like Diebold. Sam M. Ditzion, chief executive officer of Boston-based consulting firm Tremont Capital Group Inc. notes that, “key employees include people who manufacture, repair and maintain ATMs, people who transport and load ATMs with cash, people who work for ATM transaction processors, and the large numbers of people who manage ATM operations on behalf of bank and independent ATM deployers.”
There are also tremendous economic benefits to ATMs. For example, Americans don’t have to wait on long lines during business hours to access their money, which makes them far more productive. “ATMs have become the main distribution channel for the distribution of cash in all modern economies and cash remains by far the most popular form of payment by U.S. consumers,” noted Mike Lee, the CEO of the ATM Industry Association.
Triton Systems manufactures ATMs that are used at convenience stores. It employs 200 workers in the United States including 150 at its plant in the small Gulf Coast community of Long Beach, Miss., which was still reeling from Hurricane Katrina when the economic downturn hit.
The company’s spokeswoman, Aimee Leeper was perplexed by Obama’s comments. “We’re not in the business of taking American jobs,” she said. “What I wish President Obama had thought of is that people want convenient access to their money. How crazy is that?”
Philip Klein is senior editorial writer for The Examiner. He can be reached at [email protected].
