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Doormen and blackjack dealers show why experts get things so wrong

Michael Schaus
Michael Schaus
Opinion
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Often in economics, what should happen according to expert predictions is dramatically different than what actually occurs. 

Indeed, there are many instances in politics and policy where the logical results one would expect to get from an Excel spreadsheet diverge dramatically from what happens in the real-world. Minimum wage increases don’t automatically reduce poverty, tax increases don’t always result in greater revenue, tariffs don’t balance trade deficits, declaring war on drugs doesn't free us from the negative social impact of drugs… and so on.  

As Ogilvy Group Vice Chairman Rory Sutherland explains, logical and rational thinking might work well in computer models, policy papers and spreadsheets, but it is often wholly inadequate at predicting the actions of individuals living in the real world — and that, of course, is what actually matters.  

Logically speaking, one would be forgiven for thinking casino dealers serve no functional purpose in today’s technologically advanced world. Indeed, every few months another story seems to surface about how economic experts believe such workers are at exceptionally high risk of being replaced by touchscreens, gaming machines or some other automated process. A University of Oxford study, for example, estimated that dealers have an automation probability of 96 percent — among the highest of all occupations studied. 

So why aren’t casinos laying off dealers in droves and replacing them with robots? After all, that study was conducted in 2013, and it’s not as if the technology doesn’t yet exist to start replacing these workers. Most of us have even walked right past state-of-the-art roulette gaming machines plenty of times while we looked for an open spot at a table with a human dealer. 

Like hotel doormen, dealers contribute far more than what is suggested by their job title. While automatic doors have been a staple among convenience stores and retail establishments for decades, doormen remain a prolific part of the hospitality industry precisely because operating a hinged portal is but one part of their real-world value. They also provide security, customer service and personal interactions for guests. In some locations, the “doormen” don’t even actually open doors — they merely convey a sense of elevated status to guests by illustrating that their hotel (or apartment) is so posh it can pay a handful of men and women to stand around in sharp-looking uniforms to welcome folks as they arrive. 

Sutherland called this phenomenon “the doorman fallacy” — and just as doormen provide something beyond their notional function, roulette dealers do something more than clear away everyone’s chips when the ball stops bouncing. 

The real threat facing the dealers in today’s world isn’t automation — instead, it’s a mix of human behavior, consumer preferences and economic trends. Should consumers begin to abandon the tables for other pursuits, there may very well be less of a need for dealers along the strip — not because machines are taking over, but because casino guests would rather burn cash at a slot machine, a night club or in a shopping mall than at a gaming table with strangers.  

Or to put it another way, casinos will start laying off dealers (or replacing them with machines) as soon as those tables sit empty on otherwise busy nights… but not before. 

When he ran for the Democratic presidential nomination, Andrew Yang had similar concerns about automation bringing about the death of the American workplace. He argued that consumer preferences for low prices and convenience — combined with corporate America’s focus on profit — would drive employers to automate an ever-growing share of service jobs. 

Certainly, in some areas of the economy, such concerns are founded — even if it doesn’t necessarily translate to lost opportunities for workers. Already, fast food restaurants are turning to touchscreens, and grocery stores have been relentlessly increasing the number of self-checkout aisles. However, the idea that price (and convenience) is the only concern among consumers is not well founded in real-world experience. If it were, the overpriced dining experiences on the Strip would have long ago been replaced by automated food courts and vending machines. 

In his recent book, Alchemy, Sutherland points out that unnecessarily narrowing one’s thinking to certain data points can easily lead one astray. For example, when an aspiring soft drink manufacturer developed a plan to sell an absurdly disgusting drink formula in tiny cans at twice the price of Coca-Cola, the spreadsheet-loving “experts” who presume to understand consumer data were certain the product would be an instant flop. 

That drink was Red Bull — and, clearly, it didn’t exactly fail. As it turns out, there are things beyond price or taste that those data-crunchers didn’t realize are equally if not more important to human beings.   

However, the ever-present panic regarding a possible robotic revolution in the labor market is a perfect illustration of the kind of clinically “logical” analysis that failed those critics of Red Bull — and, unfortunately, it’s a prolific form of analysis in other areas of public policy as well. 

Individuals acting like human beings, rather than neatly classified clusters of data, certainly make life difficult for those would-be spreadsheet experts to quantify, classify and predict economic, social and cultural trends — whether it be during a pandemic, a surge in automation technology or an economic crisis. Human behavior on the individual level is the most obstreperous and unpredictable variable for government officials, policy experts or economic wonks trying to predict the future — and it’s also why liberal societies shouldn’t expect those inherently flawed experts to solve most of our social, economic or cultural problems. 

After all, they are often going to get important things wrong. And while that’s frustrating news for those who would like to see government fix our most pressing issues, it’s pretty good news for all those workers who are supposedly facing a dystopian economic future at the hands of “the machines.”    

Michael Schaus is a communications and branding consultant based in Las Vegas, Nevada, and founder of Schaus Creative LLC — an agency dedicated to helping organizations, businesses and activists tell their story and motivate change. He is the former communications director for Nevada Policy Research Institute and has more than a decade of experience in public affairs commentary as a columnist, political humorist, and radio talk show host. Follow him at SchausCreative.com or on Twitter at @schausmichael.

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