An article in Newsweek last month caught my eye. The headline blared: "Blood on the Marble Floors: Hundreds of thousands of bank employees could get axed over the next several years."
The article cited statistics that the U.S. has far more bank employees per 1,000 citizens than either Germany, France, Japan, Belgium, Greece, Canada or Italy. Britain is the only major world economy with a higher ratio of bank employees than us.
"Put simply," said Newsweek, "the nearly 1.5 million people employed by U.S. banks is just far too many.
Of course, there are differences between U.S. banking and that of other countries. Our dual-banking system is unique in the world, and that's part of the reason why our 9,000-plus banks far outnumber, for example, Canada's 60.
We also do banking differently in this country. Community banks are an American invention, as well as an American success story. Again, that fact makes us different.
Then there is regulation. If ever a reason existed to keep banking a fullemployment industry in this country, regulation is it. The jobs of just about everybody at my bank, for example, are affected in one way or another by regulatory compliance. Regulation has made banking a full-employment industry.
Which is why so many bankers and the ABA praised the introduction in late March of legislation to cut more government red tape for our industry.
The proposals, introduced simultaneously by Senate Banking Committee members Richard Shelby (R. Ala.) and Connie Mack (R. Fla.) and House Banking Committee member Doug Bereuter (R. Nebr.) seek changes in CRA, Truth-in-Savings, Truth in Lending, RESPA, small-bank examinations, fair lending, environmental liability, and more. These are important bills, and if passed, will help banks reduce many compliancerelated costs. Over time these bills could also have an effect on employment levels in our industry.
Interstate banking is another of the trends contributing to the possibility of a smaller workforce. As banks consolidate and combine redundant operations, it's likely that employment will also decline.
There are other trends to be noted as well. New charters are down. Branches aren't being built as rapidly as they were a few years ago. Technology is automating many previously laborintensive jobs. Some newer bank branches are almost fully automated. Many bank financial services are being delivered by ATM, telephone and computer. …