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ATMs created more teller jobs
The fear
People feared ATMs would wipe out bank tellers. The machines did the work automatically, and nobody had to pay a person to do it.
What happened
The result ran the other way. With ATMs handling the teller work, a bank branch needed fewer people, so operating one cost less. Banks opened more branches because they were cheaper, customers liked having them, and the total number of teller jobs ended up higher.
The Jevons paradox
A cheaper service spread to more people, and the market grew instead of shrinking. The Jevons paradox follows the same pattern: coal engines grew more efficient, the coal industry panicked, and travel by train got cheaper, so people rode trains for more than freight and the coal industry boomed.
Why did bank tellers grow in number after ATMs?
Economist James Bessen found that US bank teller employment rose from about 500,000 in 1980 to about 550,000 in 2010, even as ATMs spread across the country. Cheaper branches meant banks opened more of them, and each branch needed fewer tellers. The tellers who remained shifted toward selling products and handling customer relationships more than counting cash.
Why did Jevons say efficiency raises coal use?
In his 1865 book The Coal Question, the English economist William Stanley Jevons noticed that James Watt's more efficient steam engines had increased Britain's coal use instead of cutting it. Efficient engines made steam power affordable for factories, ships, and railways that could not have paid for it before. Britain's coal output rose many times over during the nineteenth century. Economists later gave the pattern his name.
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