Thursday, January 23, 2014

Dead-End Careers

Why is this lady smiling?  Doesn't she realize that she will likely be laid off - and never rehired - long before she retires?

As I noted in my update to BoA Debit Card Fees (there are none, they backed down on that), the bank is sort of forcing people to use ATMs instead of tellers.

Citibank has a similar business model.  They send me mailings and SPAM all the time, trying to get me to sign up for their bank.  Funny thing is, there is no branch in my town - only an ATM.  Rather than use traditional "brick and mortar" banks, modern banking is morphing to the ATM and Kiosk, the Website and the App, with the human being and teller window being a thing of the past.

I believe, in about 10 years or so, you will be doing most of your banking through machines or online - or paying dearly in monthly service fees to use a physical bank with live, breathing tellers.

Think about it a minute.  What does a teller do?  He counts his cash drawer in the morning, and then accepts deposits, processes withdrawals, cashes checks, accepts payments, and does a number of routine tasks that all involve entering data into a computer and dispensing cash - work that an ATM does.

As I noted in another posting, physical checks are meaningless these days.   All a "check" is, is a piece of paper than is a request for an electronic transaction.  So if you think going to a "real person" with your "real check" is somehow better than banking online or using an ATM, think again.   Today's tellers are no different than the "elevator ladies" they used to have in Japan - make-work jobs where someone would stand in the elevator and press the floor button for you.

As I have noted in previous postings, there have been waves of layoffs in this country, as automation takes more and more jobs.  One could argue that the first wave occurred in the 1970's and 1980's, when a lot of blue-collar jobs were automated.  It takes half the number of people to assemble a car (or much else) today than it did in the past.  What happened to all the people who used to work in car factories?

I think in the 1980's and 1990's we saw a lot of low-level clerical work disappear as well - as spreadsheets and personal computers replaced the legions of accountants and clerks, with their adding machines.  File clerks and photocopy clerks have also gone the way of the dinosaur - victims of our new, paperless age (one firm I worked at, had at least a dozen file and photocopy clerks, and four huge Xerox machines that ran from dawn to dusk).   Receptionists have been replaced with DTMF telephone trees and other automated systems. 

I don't know how many high tech companies I've visited where the receptionist desk is empty.  There is just a phone and a note saying to call such-and-such a number to page your party.  No one can afford receptionists anymore, it seems.

Larger companies have done away with the receptionist in favor of "security" - armed officers who check in all visitors.   Perhaps that is more of a growth area, in this gun-happy day and age.

But in the long-term, I think that any clerical job that amounts to little more than entering numbers into a computer, it is going to go away.  People can enter their own numbers into a computer, and don't need someone to do it for them - anymore than you need an "elevator lady" to push the button on the elevator for you.

This tells you where banking is going in the next 10 years - automation.  Traditional banks, with their tellers and drive-up windows are going away - to be replaced by highly sophisticated ATMs or even just your smart phone.   Yes, there will still be bank offices, but far fewer of them.

Bank of America now has an "app" that allows you to take a picture of a check you want to deposit, and then it is considered "deposited."  You just tear up the check, after that.  It sounds scary, until you realize that the bank tears up the checks, anyway, and that a check is just an electronic request, written down on a piece of paper.  Why would you drive to the bank to make a deposit, when you can do it from your cell phone?  (This illustrates why our car culture is declining, as well).

And if you think about this, it makes sense - banking is prime for automation, as most of the tasks involved are data entry and processing of data.  There really is nothing a live human being adds to the picture, except the opportunity for data entry errors.

Of course, there will still be offices - for safe deposit boxes and the like - although I suspect in this day and age, fewer and fewer people use such things.  At least, I no longer use them.   A physical bank branch is a very expensive luxury for a bank.  They have salaries to pay - plus benefits - maintenance, insurance, and property taxes, plus the risk of being robbed.   Get robbed enough, and you have to add a security guard or two.  The costs just escalate.

This next wave of automation will, of course, put a whole new class of people out of work - bank tellers, security guards, and other employees - even the janitors.

Want a job with growth potential and stability?  Become an ATM repair and maintenance technician.  I'll bet those will be in short supply!   Sadly, median salary at the present time is only $34,252 a year.   But that's more than a bank teller makes!

Long-term, I think job security will lie in either service jobs where personal service trumps automation - or in technical fields.  Jobs that involve some sort of skill or talent cannot be readily replaced by a machine.  I'll bet they automate McDonald's in the next 10 years or so - to the point where they will be like ATMs.  You swipe your debit card, and burgers fall out.

But a gourmet chef?  He will always be in demand - and paid highly, if he is successful.  But of course, not everyone can be a gourmet chef.  It does require some talent, skill, education, and effort.

Similarly, until we can build robots to fix machines, there will always be a need for talented technical help to repair all this automated equipment.  Sadly, no one seems to pay this talent very much right now - but that could change, as our culture becomes more and more like a cargo cult - where no one has any technical skills whatsoever.

So what's the point of all this?  Two things:
1. If you have a clerical job where you are just punching buttons on a computer, consider whether the job will outlive your career. Don't weigh yourself down with emotional arguments of whether it is "fair" or not - just be prepared when it happens. Save your money, don't spend it.  And plan on looking for a job before the shit hits the fan, instead of standing like a deer in the headlights, wondering what happened.  Expire to retire by age 55, and not by choice.

2.  If you are starting out, consider how long your career might last, and whether it has a future.In researching this article, I found a number of sites for "for profit" schools, advertising training in how to be a bank teller.  Talk about a wasted education!   There may be job openings right now for bank tellers.  But moving forward, I think the job market will likely shrink, as more and more banks close branches to save money and try to move customers to ATMs.
We wonder why the middle-class is shrinking in this country. Some want to blame the rich, for having all that money.  And maybe part of it is that.  But another aspect is the decline in high-paying blue collar jobs, and now the decline in high-paying clerical and lower-level white-collar jobs.  The era where people with no specific skills or talents could command a middle-class income (with a nice salary and full benefits) may be drawing to a close.

Perhaps a new era will emerge from this - with a new middle-class.  I am not sure.  Predicting the future is a difficult task.

However, in this machine and computer age, it seems like a no-brainer to predict that if you have some real machine and computer skills, the odds of being laid off or unemployed are going to be a lot lower.  You might not get wildly rich, but again, you likely won't end up broke.

Failing technical skills, having some sort of real talent in the service sector is another area of job security. Cutting open bags of pre-cooked entrees and microwaving them is something a chain restaurant can hire anyone to do. Creating new recipes and cooking from scratch, on the other hand, can't be replicated.

Just some thoughts I had. There will be more layoffs - bank on that (no pun intended).  More and more mind-numbing jobs will become obsolete.   And in a way, isn't that a good thing?

* * *

A few more jobs that will be obsolete (or severely curtailed) by automation, if not already:

1.  Video Rental Store Clerk (gone!)

2.  Librarian (other than universities, library of congress, etc.).   e-readers will take over - and have - and local libraries will find it harder and harder to have physical books to lend out.  It will take time - maybe 20 years - but your local library may be replaced with an online lending website, or perhaps nothing at all.

3.  Bookseller - other then specialty or rare books, most bookstores will go under, and in fact, have already done so. Most small towns won't have a bookstore, and the "megastores" in the malls are already vanishing.

4.  Record Store Clerk.  Whoops.  Gone.

5.  Fast-Food Worker:  I believe this will become automated, as the SEIU pushes for unionization of fast-food chains and pushes for (and gets) higher wages, including a higher minimum wage.  I have already seen a machine that cooks and dispenses orders of french fries (in a vending machine).  Using robotics to make a fish sandwich can't be much harder (and it would actually look like the picture on the box, instead of a mashed-up mess).  Low wages drive these restaurants.  When the low wages disappear, so will the jobs.  No one will pay $10 (in today's money) for  a Big Mac.

6.  Insurance Agent (or clerical worker at an Insurance Agency):  I can go online, shop for insurance, buy insurance, and download insurance cards, from GEICO or a number of other sites, in a manner of minutes.  Why spend hours driving to a physical agency and having them sell me more insurance than I need?

7.   A/R Clerk:  Time was, every company had a small army of clerks who opened envelopes from customers and took out the check payments, and then processed these checks - crediting their accounts for the amount paid, and then stamping the checks and preparing them for deposit to the bank.  Today, more and more people pay bills online, which directly sends money from one computer to another, automatically crediting the correct account.  No more physical checks, no more data-entry clerks.  No more person to print out "paper" statements and put them in the mail.

8.  Mail Room Clerk:  With more and more data being sent electronically, the mail room, in a large corporation, may cease to exist.  Distributing what little mail still exists, may be a part-time job for some office worker.   "Working your way up from the mail room" is already a thing of the past.  NOTE that "Postal Worker" will still exist, but the numbers of workers will decline, and the USPS will spend more time delivering packages, than paper mail, in my opinion.

Again - and please read carefully - I am not saying these jobs are going away TOMORROW, or disappear altogether, but in the next 10-20 years, they will decline, precipitously.  The next generation won't see the value (and doesn't see the value) of spending more money to "talk to a real person" when they can do business online.

The Internet is making many sales and service jobs obsolete today.  Tomorrow, I think robotics will make even more jobs obsolete.

Whether you LIKE this or not is irrelevant.  It is going to happen - and is happening.   Live in reality and plan accordingly.

* * *

A reader opines: "The main purpose [of a bank teller] is not to dispense cash and take deposits, the teller exists to generate sales leads for the sales consultants that sell existing and new customers financial services. I am not sure how automation will actually help banks retain and get more business without people to generate those leads."

Bank of America charges close to $20 a month extra, if you want a bank account where you can use a branch and teller. Read that last sentence again, slowly. Like most people, I opted out of this unnecessary $20 expense, as BoA has some of the most technologically sophisticated ATM machines.

If bank tellers were really the source of "leads" for loans and investments, why would BoA, one of the largest banks in the United States, chase customers out of the branches?

Moreover, in the 40-years I have been banking, at various banks from BoA, to Riggs, to KeyBank, to my local Credit Union, I have never, ever, EVER, been solicited by a teller as a "lead" for some financial service.

Yes, in years gone by, I might have gone to a bank to get a loan - but I talked to the loan officer.   Today?  We do this all online. There is no real reason to "sit down with a loan officer" and explain your life story, when the loan application will be approved or denied based on your credit score and verifiable income.

So, throw in "Loan Officer", "Investment Adviser", "Vault Teller", and "Bank Manager" in the list of jobs that will be obsolete or severely downsized in future years, as well.

And add SALES jobs as well.   I recently bought a truck, and the entire purchase, other than showing up to sign the papers and take delivery, was online.   The price and everything else, was negotiated online.

Will there still be salesmen?  Yes.  But far fewer than in years gone by.

I understand my reader's position. The fellows at New-Departure Hyatt in Bristol, and at Carrier in Syracuse, said the same thing: "They will NEVER close this factory!"  All are closed - some bulldozed into the ground.

Or the people who still think, "I like to touch the product before I buy it!" or "I like to handle a REAL book!"  or "Vinyl records sound so much better than those electronic-sounding CDs!" or "I prefer to pay my bills by writing out a check!"

And so on and so forth.

The world is moving to an online age, whether we like it or not.  I detest social networking, texting, and smart phones.  This does not mean they will go away.  They will morph and change over time.  In ten years, Facebook may be replaced by something else - or some new fad will take over.   But this doesn't mean they are going away,  just because I don't like them.

Young people today, applying for a loan or looking for investment advice, are more likely to go to a website. And it is not hard to understand why, as you can get more information online, if you look harder.  And a website won't deny your loan based on the color of your skin.

I have an investment adviser at Fidelity, and he is a nice guy and all.  But for the first 20 years we had these accounts, we had no such adviser, and while it is fun to sit down and talk with him, nine times out of ten, he just steers us to their website, when we need more information.  His job won't disappear entirely, but you can bet there will be fewer salaried "advisers" per 1000 customers than in the past.

That is the nature of automation - it replaces a lot of make-work jobs.

And the Internet is the next wave of automation - displacing millions of people from jobs that no longer make sense, when a website is faster and easier to use.