The manufactured trucker shortage
Have you been reading about the shortage of workers in the trucking industry? Have you wondered why, in this crappy economy, they haven’t been able to find more workers? Here’s an excerpt from recent Wall Street Journal’s coverage of this worker shortage crisis:
Operators across the country are short 30,000 long-distance drivers, the American Trucking Associations estimates. The group projects the shortage could top 200,000 in the next decade. Average annual pay for long-distance drivers was $49,540 in 2013, according to ATA estimates. Hiring and wages in truck transportation have inched up this year, according to the Labor Department.
I’ve got a theory. Here’s what it is: they trucking companies aren’t paying enough. Funny how demand and supply and efficient markets go out the window when there’s a political point being served, though: Congress is considering passing a law that would allow 18-year-olds to be long-haul truckers. A terrible idea considering how younger drivers are much more dangerous.
Of course, $50K isn’t nothing. But on the other hand, truckers have to be trained, competent, and regularly spend many days on the road. Moreover, the current surveillance technology has severely degraded their quality of life, which I learned by reading about Karen Levy’s work on the industry. Also, new truckers probably make substantially less than $50K when they start.
Partly the surveillance arose from the very real risk of truckers driving too much per day – it was an attempt to make sure truckers were driving safely. But since the technology has been installed in many large-company fleets, the companies have used it to essentially harass their drivers, telling them when break is over and so on. This has worked, in the sense that larger companies with more surveillance have managed to lower costs, pushing out smaller and individual truckers. And that means that truckers who used to own their own business now reluctantly work for huge companies.
For an industry that has historically prided itself for its independent nature, this change does not sit well with drivers. The turnover rates are staggering:
When you make your workers lives worse, and you don’t compensate them with cash money to make up for it, you find your workers quitting. That’s what’s happening here.
Conclusion: we either need to improve truckers’ work experiences or pay them more. There’s no worker shortage, there’s simply an unwillingness, on the employers’ side, to face up to the facts.
mathbabe 
You are right on point. It’s amazing the sob stories that come out of industries “struggling” to find workers that don’t pay enough or have good working conditions.
Another interesting twist here is there’s been some discussion that these jobs will disappear anyway with the rise of automated trucking:
View at Medium.com
I’m not really sure how autonomous vehicles will work out, but perhaps the American trucker is a job that will fade into the sunset.
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Is this 20 years away or 5-10 years away like driver less? cars from Google, et.al. Seem to me like Trucks would be more difficult. Letting 18 year olds drive a big truck, real bad idea.
Look how bad-accidents a plenty- they are with car accidents in the 18-21 ages.
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The Wall Street Journal seems keenly aware of the need to keep CEO’s salaries high to attract talent… but apparently less aware when it comes to truckers?
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Right on
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“The Wall Street Journal seems keenly aware of the need to keep CEO’s salaries high to attract talent… but apparently less aware when it comes to truckers?”
The rich are too poor; the poor are too rich.
The rich need to earn more to encourage them to work more; the poor need to earn less, for force them to work more.
$60K is too much; $250K is just scraping by and is middle class.
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“it was an attempt to make sure truckers were driving safely.”
The unsafe driving was a result of the Motor Carrier Act of 1980, which deregulated the industry and broke the unions. Low pay is another effect of this and subsequent deregulations.
The ‘worker shortage’ story is often rewritten as as a ‘skills shortage’ story. In every industry it turns out to be a fable. Netflix has a explicit policy of paying more than ‘industry standard’ salaries for its IT staff, and they have no trouble at all finding any skill they need. As the Wall Street Journal says,
” complaints about skill shortages boil down to the fact that employers can’t get candidates to accept jobs at the wages offered. That’s an affordability problem, not a skill shortage. A real shortage means not being able to find appropriate candidates at market-clearing wages. ”
http://www.wsj.com/articles/SB10001424052970204422404576596630897409182
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Cappelli makes some really good points but misses the role of HR in all this: story in WSJ about HR screening 20,000 engineering candidates, but unable to come up with a single qualified applicant!
My point, which I would add to Cappelli’s list, is the bureaucratization of the workplace has resulted in hyper-differentiation, segmented roles, introducing massive inefficiencies. The more we profess to rely on merit and credentials, the more we actually rely on “who you know.” HR is only necessary because there are SO many applicants for jobs, and the task becomes NOT finding the perfect candidate, but implementing screens for rejecting job-seekers. (This explains the over-reliance on credentials, and the resultant credential inflation.)
I love the Bill Murray movie, where he is a corrupt mayor that assigns jobs to new graduates on the basis of a lottery. Put your hand in a hat, and pull out a job! No need for HR. You are trained on-the-job, just like now.
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The quoted paragraph starts well, but “A real shortage means not being able to find appropriate candidates at market-clearing wages” is a howler as far as I can tell. Explaining why this sentence makes no sense would be a good problem to test freshmen on the definition of “market-clearing wages.” I presume something else was intended, perhaps inability to find appropriate candidates at what *used* to be the market-clearing wage?
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On road trips I run with a CB radio and the amount of complaints I hear about this is pretty big, about 1/2 of what is on the air. Once one driver gets going about it, many more chime in. This is a new development of the past 2 or 3 years. There’s no shortage of older, experienced drivers who publicly contemplate getting out of the business in response to the micromanagement of their workday. It’s not that the drivers don’t want to comply with the rules, though many of them do think many of the new rules make no sense, it’s that what they have to do to comply is often unrelated to real time conditions and circumstances and is often the wrong thing to do for both safety and efficiency. I often hear that they are blamed for not meeting schedules or other metrics even though they have no ability to do the things that would allow them to do so due to controls on both their driving and the engines of their trucks. Deming has been forgotten, the workers are blamed and punished for the deficiencies of the system. One of the other common complaints I hear is about younger or otherwise inexperienced drivers and the ease with which you can get what is referred to as “mail order” CDL’s, in other words a license that doesn’t require very much actual driving training at all. The similarities between this and what’s being done to the teaching profession are frightening. It seems that the death by data of human experience, wisdom and skill knows no bounds.
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Loved your comment about notions of supply and demand going out the window when there’s a political point to be served. Your blog today refers to the trucking industry, but your point also brings to mind–oh, I don’t know–public outcries about STEM??
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“Eat your heart out, Adam Smith!”
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worker shortages in STEM? Your points applies quite well in engineering, from my own personal experience. After 35 years in the field, I’ve heard “engineer shortages” as a constant through time. The interesting thing is that a) starting salaries of engineers have not exceeded inflation across three decades and b) few organizations will keep an engineer doing front-line technical work for a decade after getting a degree.
I don’t understand how “higher pay” is such an obvious answer, but never brought up as a counter-argument when “worker shortage” articles get published.
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People leave trucking jobs for lots of different reasons, but clearly, the more you’re paid, the less likely you are to leave. This is reflected in the graph above: LTL drivers happen to be paid quite a bit more than non-LTL drivers.
BTW, LTL stands for “less than truckload”…these are companies that haul items for many different customers in a single shipment, such as UPS, FedEx, Estes, Saia, ABF. An easy way to spot LTL rigs is they’re usually hauling not just one, but two trailers (some states even allow three).
Large truckload companies haul an entire trailer of freight for a single customer at once (or sometimes a few customers at once).
LTL also happens to be pretty much the only place a truck driver can find a union job these days. This was the case when I became a trucker 21 years ago and probably has been ever since the industry was deregulated in the early 1980s.
A good thing about the “driver shortage” is it’s pretty easy to leave the road for the occasional sabbatical then find a new job when you’re ready to go back. I’ve done this on several occasions. In fact I just left the road a couple months ago, mostly to care for my aging parents, but partly just for the free time. I don’t expect to have any trouble returning sometime in early 2016, with one exception: the present surveillance climate is bothersome. I am hoping I won’t have to sacrifice any income in order to preserve my privacy on the job.
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Informative and your handle is crazy awesome. Thanks!
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My old buddy is one of the rare owner operators left. He says what you just said.
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I know this first hand I worked for a company 35 years that had 40 truck drivers. They all said the same thing once they left the shipping dock they felt they where actually on their own and in charge of their own day and way of getting the stops done. Of course they had to get the job done and had a route but they also had a lot of freedom in terms of time spent at stops and had some control over their relations ship with the receiving agents. Over my whole career many of these drivers introduced their relatives and friends for jobs. Today with all the monitoring equipment and computerized wireless reports , including in cab video cameras and recording devices they all have become robots and have zero control. Not one driver would recommend this career to anyone and in fact are sure that when they retire , the future is automated trucks. They claim that they feel like robots and are controlled and monitored in every move and action.
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Mathbabe, since I know you like folk music here’s a good song about truckers’ independent nature, “Wild Wild Heart”: https://www.youtube.com/watch?v=ano8Ib2j6O8 Perhaps you already knew it.
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$50k my ass. The BLS puts the median wage at 38,200 and $8.50/hr. Even worse, the trend is toward “owner-operators”, who make less money, work more hours, and don’t get benefits.
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Yeah. I’ve talked with independent truckers about their financial condition, and it is very precarious. Although they are paid yearly one or two hundred thousand, their expenses match that. Insurance rates keep increasing, fuel and maintenance and repairs increase. They have to be very adept at handling finances that are constantly changing. Time away from home is not included as “unpaid hours,” but should be, along with motel/food costs. No benefits. All these negatives, of course, explain why few want it, and explain the dismal retention rate.
This moves us to Josh’s point — which is why French printers in 1740 decided to automate (the beginning of the Industrial Revolution) — producers cut their dependence on workers, making most of us unneeded and unnecessary.
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Yes I spent 25 years in sales in the LTL (less than truckload) business in sales and it has changed tremendously. Of course now truckers have to go into debt to buy a rig, so there you go with step one if you will, same old same old. Cross country linehaul drivers are different than local pick up and delivery drivers too. Linehaul drivers are owner operators and now many local drivers are as well. Those jobs used to be hourly. The big exceptions of course are the parcel services for a lot of what they do.
It’s the same old story with no enough money to go around and I do some work right now for a small cross country trucking business and let me tell you, the money is not there. I work on their damage claims, and is just like claims anywhere, folks look for reasons not to pay as that’s money out the door if you will. The job of picking up and moving freight has become more complex too with 3rd party brokers taking a chunk out of the revenue that didn’t used to be there as well, and some of those are huge…look at Echo Global who’s gobbled up tons of small brokers…so there you have it, had to fit in another entity to pay and spread the money a little thinner.
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Great column. I have heard that when NAFTA is fully implemented the Mexican truckers will be allowed to drive and deliver loads using all of our highways, not just the ones near the border. Since they earn very little, look for companies to figure out a way to hire them for shipments heading toward the border areas and the west coast. So, expect wages to continue on a downward spiral.
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