Vanguard Chief Economist: AI and jobs, still in an ATM phase

In a recent article, Vanguard's Chief Economist discussed how technological advancements have historically impacted job markets, drawing comparisons to the recent rise of artificial intelligence (AI). Early predictions often suggest that new technologies will lead to significant job losses, but history shows a more nuanced reality.

The introduction of automated teller machines (ATMs) in the 1980s, for example, initially prompted concerns about bank teller employment. However, the spread of ATMs did lower demand for tellers at individual branches but also allowed banks to open more locations, keeping overall bank teller employment stable. The data shows that rather than replacing jobs, ATMs created new ones in other areas, highlighting that technology often augments rather than eliminates roles.

The true disruption occurred later with the advent of mobile banking, which automated the entire banking experience and led to a decline in branch visits. This transformation was driven by broader changes, including the legal acceptance of electronic signatures. The current debate around AI also suggests that while it will likely transform the labor market, widespread job losses are unlikely.

AI is being viewed as a general-purpose technology, similar to electricity and the personal computer, capable of creating new products and services we haven’t yet imagined. Just as in the past, the real disruption may come from how organizations restructure work around AI capabilities rather than simple task automation. The evidence points to a more gradual transformation akin to the shift from ATMs to mobile banking, where the focus is on how work is organized rather than the elimination of jobs.