Does this mean we have fewer McDonald's workers because I make an awesome cheeseburger at home?

Recently, President Obama made news on the homebrew front when he served a homebrewed beer at the White House.   More recently, however, Obama remarked on how technological innovations have led to a weak labor market.  In particular, he blamed the loss of  bank teller jobs on the creation of the ATM machine.   In making his argument, Obama probably was simply making a political talking point to play to his union base.  

But assume that he truly believes what he said:  when all is said and done, the economy would have more jobs if there were no such thing as an ATM.  If so, he fell victim to the old "seen and unseen" fallacy.  Yes, the creation of the ATM machine has resulted in a loss of demand for bank tellers and, thus, the number of bank teller jobs.  That is the obvious effect: what we see.  What's unseen are the jobs that are created in other industries.  The most-obvious jobs are those in the ATM industry.  

But other jobs are created in other industries not necessarily connected to the ATM industries.  ATM's are more convenient to use, which means they in effect create time that bank customers can use in other activities.  Perhaps people can spend just a bit more time, and money, at the grocery store or going to movies.  This creates jobs in those industries.  Or perhaps they take the time as leisure, maybe playing softball.  To do this they'll  need more softballs, bats, gloves, beer (of course), etc.  This creates jobs in those industries.  But all these are essentially unseen effects.  It's hard to put our fingers on them,.  But just because they aren't obvious to us does not make them any less real.

But technological innovations are not the only activities where we have these seen and unseen effects.  Because they brew at home, homebrewers don't buy as much beer from breweries and retail liquor stores.  This means a reduction in brewery and liquor store jobs.  That's the seen effect.

But we brewers have to obtain ingredients with which to brew.  We need our brewing grains, our adjuncts, our hops, our yeast, etc.  We also have to have a few pieces of equipment that most people do not have sitting around the house.  We need carboys and 5 gallon food-grade plastic buckets.  We need bottle cappers, kegging equipment, CO2 canisters for force-carbonating our beer, and many other pieces of equipment.  Homebrewers' demand for these products creates jobs in the industries where this stuff is made and sold.  That's the unseen effect.

You can say similar things about other do-it-yourselfers.  Home cooks, woodworkers, and do-it-yourself handymen simultaneously destroy jobs in one industry and create them in another industry.  Calling Dr. Schumpeter!

So it is silly to say that homebrewing decreases the number of net jobs.  It is just as silly as to say that ATM's have led to a lower number of jobs.

via marketpower.typepad.com