> But will it?

My prediction is no, because productivity gains must benefit the lower classes to see a multiplier in the economy.

For example, ATMs being automated did cause a negative drop in teller jobs, but fast money any time does increase the velocity of money in the economy. It decreases savings rate and encourages spending among the class of people whose money imparts the highest multiplier.

AI does not. All the spending on AI goes to a very small minority, who have a high savings rate. Junior employees that would have productively joined the labor force at good wages, must now compete to join the labor force at lower wages, depressing their purchasing power and reducing the flow of money.

Look at all the most used things for AI: cutting out menial decisions such as customer service. There are no "productivity" gains for the economy here. Each person in the US hired to do that job would spend their entire paycheck. Now instead, that money goes to a mega-corp and the savings is passed on to execs. The price of the service provided is not dropping (yet). Thus, no technology savings is occurring, either.

In my mind, the outcomes are:

* Lower quality services

* Higher savings rate

* K-shaped economy catering to the high earners

* Sticky prices

* Concentration of compute in AI companies

* Increased price of compute prevents new entrants from utilizing AI without paying rent-seekers, the AI companies

* Cycle continues all previous steps

We may reach a point where the only ones able to afford compute are AI companies and those that can pay AI companies. Where is the innovation then? It is a unique failure outcome I have yet to see anyone talk about, even though the supply and demand issues are present right now.

IIRC, the way this worked was that by decreasing tellers required per branch, it made a lot more marginal locations pencil out for branches, at a time when the banking industry was expansionary.

This is not so helpful if AI is boosting productivity while a sector is slowing down, because companies will cut in an overabundant market where deflationary pressure exists.

I go back and forth on this. I relate it to software. I don't think AI can meaningfully write software autonomously. There are people who oversee it and prompt it and even then it might write things badly. So there needs to be a person in the loop. But that person should probably have very deep knowledge of the software especially for say low level coding. But then that person probably developed the knowledge by coding things by hand for a long time. Coding things by hand is part of getting the knowledge. But people especially students rely heavily on AI to write code so I assume their knowledge growth is stunted. I don't know mathematical proofs will help here. The specs have to come from somewhere.

I can see AI making things more productive but it requires humans to be very expert and do more work. That might mean fewer developers but they are all more skilled. It will take a while for people to level up so to speak. It's hard to predict but I think there could be a rough transition period because people haven't caught on that they can't rely on AI so either they will have to get a new career or ironically study harder.

No, I think it's likely that this is the first major productivity boom that won't be followed with a consumption boom, quite the opposite. It'll result in a far greater income inequality. Things will be cheaper but the poor will have fewer ways to make money to afford even the cheaper goods.

> So, ATMs did impact bank teller jobs by a significant amount.

Did it? This sounds like describing a company opening a new campus as laying off a third of their employees, partly offset by most of them still having the same job in the same company but at a new desk.

We're already seeing large software companies figure out that they don't need 5,000 developers. They probably only need 1,000 or maybe even fewer.

However, the number of software companies being started is booming which should result in net neutral or net positive in software developer employment.

Today: 100 software companies employ 1,000 developers each[0]

Tomorrow: 10,000 software companies employ 10 developers each[1]

The net is the same.

[0]https://x.com/jack/status/2027129697092731343

[1]https://www.linkedin.com/news/story/entrepreneurial-spirit-s...

I also notice that in the very first graph bank teller jobs were growing rapidly until ATMs started to be deployed, and then switched to growing very slowly. That sure suggests to me that if ATMs didn't exist bank teller growth would have continued at a faster pace than it actually did.

Correct. The story isn’t correct even in the original formulation. US population increased by 50% from 1980 to 2010, and the economy became far more financialized. But the number of bank teller jobs barely grew during that period, even before the iPhone.

I don't understand the economics behind bank branches. Some of the best real estate by me is taken up by giant bank branches that are always mostly empty with a few bored employees inside. And they open new ones all the time. So it's not like they're stuck in some lease.

> A third of them were made redundant

If I'm reading this correctly, the interpretation should be that a third of them were transferred to new branches.

0.66 (two thirds retention) * 1.4 (40% more branches) = 0.84, so we only expect ~16% were made redundant.

I don't think it will, but I also think it's not all doom and gloom.

I think it would be a mistake to look at this solely through the lens of history. Yes, the historical record is unbroken, but if you compare the broad characteristics of the new jobs created to the old jobs displaced by technology, they are the same every time: they required higher-level (a) cognitive (b) technical or (c) social skills.

That's it. There is no other dimension to upskill along.

And LLMs are good at all three, probably better than most people already by many metrics. (Yes even social; their infinite patience is the ultimate advantage. Prompt injection is an unsolved hurdle though, so some relief there.)

Plus AI is improving extremely rapidly. Which means it is probably advancing faster than most people can upskill.

An increasingly accepted premise is that AI can displace junior employees but will need senior employees to steer it. Consider the ratio of junior to senior employees, and how long it takes for the former to grow into the latter. That is the volume of displacement and timeframe we're looking at.

Never in history have we had a technology that was so versatile and rapidly advancing that it could displace a large portion of existing jobs, as well as many new jobs that would be created.

However, what few people are talking about is the disintermediating effect of AI on the power of capital. If individuals can now do the work of entire teams, companies don't need many of them. But by the same token(s) (heheh) individuals don't need money, and hence companies, to start something and keep it going either! I think that gives the bottom side of the K-shaped economy a fighting chance to equalize.

> But will it?

No, because if you think about Startrek the endgame is replicators. Well the concept that 100% of basic needs are met.

At some point work becomes unnecessary for a society to function.

And then came 2008, so that boom was built on fraud.

> So, ATMs did impact bank teller jobs by a significant amount. A third of them were made redundant.

That's not quite my read - the original says per branch there was a 1/3 reduction, but your comment appears to say 1/3 total redundancy.

There was, according to the original, a 40% increase in number of branches, meaning a net increase in tellers (my math might be off though)

edit:

100 branches → 140 branches = +40%

100 tellers/branch → 67 tellers/branch = -33%

140 × 67 = 9,380

100 × 100 = 10,000

net difference -620 or just over 6% (loss)

we're going to find out