Struggling to explain the nation’s weak economic performance in an interview for NBC’s “Today Show,” President Barack 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 new ATM business.
Four decades later, ATMs account for roughly 75 percent of Diebold’s business. The company’s $2.8 billion in sales last year make it the nation’s largest ATM producer. Most of Diebold’s 7,000 U.S. employees work in the ATM division at their plant in Greensboro, N.C.
Mosler never got into ATMs. After 134 years in business, it declared bankruptcy in 2001.
ATMs are job creators, not job killers. But it isn’t even factually correct to say that ATMs displaced bank tellers. The number of ATMs more than doubled between 1998 and 2008, from 187,000 to 401,500. Yet during the same period, the number of bank tellers rose from 560,000 to 600,500.
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 U.S. has grown from 81,444 in 1992 to 99,109 by late 2010. 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 for 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 in 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,” said Mike Lee, the CEO of the ATM Industry Association.
Philip Klein is a senior editorial writer for The Washington Examiner.