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Home Publications Blogs Beat the Press It's Hard To Get Good Help: Trucking Industry Edition

It's Hard To Get Good Help: Trucking Industry Edition

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Saturday, 23 August 2014 16:40

Yes folks, apparently we apparently don't have enough people trained as truck drivers. Slate gives us yet another example of the skills shortage in the U.S. economy. Apparently there are not enough truck drivers.

The Bureau of Labor Statistics doesn't publish data directly on truckers' pay, but if we look at the larger category of transportation and warehousing, the data show the real average hourly wage has risen by 1.7 percent over the last seven years. This an annual rate of just over 0.2 percent. 

If we had more skilled people running trucking companies they would realize that they could bid away drivers from their competitors and get more people to learn to drive trucks if they offered higher pay.

Comments (6)Add Comment
OES Data shows . . .
written by jhaskell, August 23, 2014 6:28
that in 2013, "heavy and tractor trailer drives" earned $18.61 per hour (median), and in 2000 that wage was $15.25. That's 22% overall, and 1.7% annually.

Using the BLS inflation calculator, $15.25 in 2000 translates to $20.63 in 2013--roughly 9.8% under the actual 2013 median wage.

http://www.bls.gov/oes/current/oes_nat.htm#53-0000

http://www.bls.gov/oes/2000/oes_53Tr.htm
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written by Scott, August 23, 2014 6:42
I remember reading an article a few months ago about the plight of truck drivers now that they are increasingly independent contractors instead of employees. The result of which is that many don't even make minimum wage without benefits, on top of which, they are forced to own the trucks, which means they are exposed to any maintenance costs as well.
The Trucking Industry is a Labor Monopsony for Drivers
written by Last Mover, August 23, 2014 9:08
They believe that universal use of ELDs [electronic log] will level the playing field, "which would give no carrier/driver a distinct advantage over another due to falsifying log books,” they write in a note. “We believe this would result in a more rational pricing environment where best-in-breed carriers would win based on service/value.”


Because employers refuse to pay more to correct the shortage, many drivers end up competing on piecework output - miles traveled - yet as "independent contractors" are micromanaged right down to mph, where to fuel up and sleep, etc. For drivers ELD is just another limit on their ability to control the work product.

The high turnover rate indicates service/value is already a low priority for employees who compete on miles and employers who tolerate it with bonus sign-ups. If drivers can't compete for miles and pay doesn't increase the shortage will get worse because the high mile drivers will leave for good.

They're not going to hang around so they can compete on "service/value" because practically all the flexibility to compete on anything has been purged from the occupation. Even modern day sweatshops have more opportunity for workers to differentiate themselves via work product quality.

The entire industry is colluding implicitly to use monopsony power to underpay drivers, in part because even if one or more firms "cheated" and paid more, there's not much more their "better" drivers could do to add value, given the heavy hand of micromanagement.
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written by JDM, August 23, 2014 9:16
When the issue of truckers' pay and why people weren't going to North Dakota and grabbing those "high paying" jobs, I looked up some info and posted it in a couple comments. I'm cutting and pasting those here:

Talked to a woman who delivers trucks and RVs for a living; she won’t take jobs that expect her to pay for the fuel because the pay just doesn’t cover it. You get around 6mpg in a loaded semi, the semi you just spent $60,000-120,000 to buy, and the diesel you’re buying is not the cheapest fuel anymore like it was 10 years ago; it’s the most expensive.

I just looked online and found a guy listing his gross vs net pay (try a search for semi “net pay” and look through some forums):

Gross pay 3563.85/wk Net pay $318.82 “and that’s before taxes or CR England’s accounting service ($210 per quarter)” and this was a no tolls week; he said tolls added 80-120/wk when he is on runs that have them.

Sp that’s less than $17,000/yr net, before taxes and assuming you work full time and take no vacations whatsoever. Wanna sign up?

And:

There’s another reason, which I outlined in comments both on the Tyler Cowen post and the Marginal Revolution post that pointed me to it: the “big pay” jobs he pointed to are places you take the truck you own ($50,000-120,000) and haul for a company. The gross pay sounds good, assuming you can actually do the hours and being away from family and friends. I gave an example from a simple online search through truckers’ forums of a typical guy making, gross, $3563.85/wk. His net, which as he pointed out is “before taxes or CR England’s accounting service ($210 per quarter)”, was $318.82. And that was on a no-tolls route; when he drives routes with tolls add $80-120/wk to his costs.

Bottom line: the pay sucks even more than the rates quoted suggest.
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written by Eric377, August 24, 2014 8:12
Loads are being hauled. The firm I work for has pretty much no problem contracting haulage at prices ex-fuel adders that have been very stable for the past 4 years. Wage data suggests there is no driver shortage. Maybe there just a surplus of firms imagining they would capture more market with more drivers, but net for the sector doesn't seem like a big gap exists.
...
written by Eric377, August 24, 2014 8:29
Per the anecdotes in other comment regarding compensation it seems at least as probable that there is an excess of drivers and potential drivers. This sector has an undeniable history of increasing prices when demand is there and labor captured a big share when truly tight conditions existed. The whole claim of not finding drivers seems like just bloviating, but compensation will increase when real forces make that profitable.

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Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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