Tuesday, December 28, 2021

There is no truck driver shortage in the US

By Nicolás Rivero of Quartz. Excerpts: 

"The country is facing a shortage of 80,000 truck drivers, warned the American Trucking Associations (ATA), an industry group representing big US trucking companies, on Oct. 25. It’s a warning they’ve more or less repeated every year since 2005."

"But the assertion that the US is suffering from the latest round of a 16-year truck driver shortage is misleading at best. About 2 million Americans work as licensed truck drivers, and states issue more than 450,000 new commercial driver’s licenses every year, according to the American Association of Motor Vehicle Administrators. In fact, it's the most common job in 29 states.

The problem is retention. Many of those licensed drivers are no longer behind the wheel because they can find better working conditions and pay elsewhere. Jobs in factories, construction sites, and warehouses pay similar wages, and don’t require people to work 70-hour weeks, sleep in parking lots, or wait in line for hours without pay or bathroom breaks to pick up a container at an overwhelmed port.

The real shortage is of good trucking jobs that can attract and retain workers in a tight labor market. The annual turnover of drivers at big trucking companies averaged 94% between 1995 and 2017, according to ATA statistics."

"Economic theory suggests that when there’s a shortage of something—in this case, workers willing to driver trucks—prices (or wages) will rise and more people will be motivated to supply it. Eventually, the shortage should abate. Yet the “driver shortage” rhetoric has been repeated by the trucking industry since the late 1980s. How could such a clear shortage persist for three decades in a market economy?

In 2019, two economists for the US Bureau of Labor Statistics (BLS) set out to investigate the mystery of the perpetual driver shortage: Was there something fundamentally broken about the trucking labor market?

The short answer, they found, is no. The labor market for trucking works about the same as the labor market for all sorts of blue-collar work. Differences in pay entice workers to enter the truck driving industry—and leave it for better opportunities. “There is thus no reason to think that, given sufficient time, driver supply should fail to respond to price signals in the standard way,” the authors wrote.

The real world is testing those economists’ theory. Trucking wages have risen 6.7% since April, when the American covid-19 epidemic began in earnest, according to BLS figures. The number of working truckers is, accordingly, up 7%. When trucking companies raised wages in the runup to the 2020 holiday shopping season, trucking employment went up. When trucking companies cut wages immediately after, employment went down."

"Trucking companies are once again hiking wages in an effort to attract drivers ahead of the holiday season. This year, drivers are in higher demand than ever thanks to the extreme backlog of containers clogging up shipyards: Ports simply can’t offload containers onto trucks fast enough. So trucking firms are giving drivers splashy pay raises of up to 25%, offering bonuses of up to $1,000 per day for drivers who get stuck waiting in lines at ports, and guaranteeing minimum salaries no matter how much cargo drivers are able to haul.

The market, in other words, is working as expected. Companies need more drivers, so they’re raising pay and benefits and attracting more employees."

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