Automating

Why are there so many jobs? There are actually two fundamental economic principles at stake. One has to do with human genius and creativity. The other has to do with human insatiability, or greed, if you like. I'm going to call the first of these the O-ring principle, and it determines the type of work that we do. The second principle is the never-get-enough principle, and it determines how many jobs there actually are. Let's start with the O-ring. ATMs, automated teller machines, had two countervailing effects on bank teller employment. As you would expect, they replaced a lot of teller tasks. The number of tellers per branch fell by about a third. But banks quickly discovered that it also was cheaper to open new branches, and the number of bank branches increased by about 40 percent in the same time period. The net result was more branches and more tellers. But those tellers were doing somewhat different work. As their routine, cash-handling tasks receded, they became less like checkout clerks and more like salespeople, forging relationships with customers, solving problems and introducing them to new products like credit cards, loans and investments: more tellers doing a more cognitively demanding job. There's a general principle here. Most of the work that we do requires a multiplicity of skills, and brains and brawn, technical expertise and intuitive mastery, perspiration and inspiration in the words of Thomas Edison. In general, automating some subset of those tasks doesn't make the other ones unnecessary. In fact, it makes them more important. It increases their economic value.