Is There Really A Truck Driver Shortage?
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It was the perfect anecdote to whiz around the internet. A number of outlets, including Newsweek, recently reported that a trucking company in Texas, Sisu Energy, is offering to pay truck drivers "14,000 a week — $728,000 a year" because of a "nationwide shortage of truckers." All you've got to do is go down to Texas and drive a truck for a couple of years, and you'll be a millionaire!
There's just one problem: "Those news stories flying around out there are very misleading and inaccurate," says Karrie Grundy, the director of recruiting for the company. For one thing, Sisu Energy does not pay salaries to its truckers. Its truckers are independent contractors who get paid by the load, which means to earn anything, drivers first have to get their own trucks and acquire the skills and certifications to haul "frac sand," a valuable sand used by fracking companies to blast oil and gas out of the ground. The most productive drivers, the company says, can bring in up to $14,000 a week. But with this money, they have to cover all the costs of their truck, fuel, insurance, equipment, repair and maintenance. Even if they're able to haul enough loads in the boom-and-bust oil fields of remote West Texas to earn $14,000, drivers take home much less.
But beyond the ridiculousness of how journalists told the story, is there actually a "nationwide shortage" of truck drivers? The lobbying organization for the nation's big trucking employers, the American Trucking Associations (ATA), has been making this argument since the 1980s, yet store shelves somehow remained stocked. In a capitalist system, where you can pay people to do basically anything, how is it even possible to have a worker shortage for multiple decades?
In a 2019 study published by the U.S. Bureau of Labor Statistics, economists Stephen V. Burks and Kristen Monaco investigated claims by industry leaders that the trucking labor market was somehow "broken" enough to create a decades-long shortage. Standard economics says if you don't have enough workers, you raise wages and within a reasonable amount of time, presto, no more shortage. Is trucking somehow different? A thorough investigation led them to conclude that the trucking labor market is not different. It is not broken. Yes, they say, the trucking labor market is "tight" — meaning that companies are competing to fill open jobs — but it functions in the same way as any other labor market.
"There is no shortage," says Todd Spencer, the president of the Owner-Operator Independent Drivers Association. His organization represents more than 150,000 mostly self-employed truck drivers around the United States. Their interest in improving the pay and livelihoods of their trucker members has long come into conflict with the interests of the ATA, which represents the big trucking companies.
The big trucking companies want to secure a steady supply of cheap labor, and the ATA has spent years lobbying the federal government to loosen regulations in the industry. It's now pushing for the DRIVE-Safe Act in Congress, which would allow 18-year-olds to begin driving trucks across state lines. Right now, drivers must be at least 21.
"The driver shortage has been a persistent issue in our industry for many years," says Bob Costello, chief economist of the ATA. "We have numerous examples of fleets of all sizes raising pay, increasing bonuses and increasing benefits, like time at home, in response to the shortage." Costello says the "shortage" has been exacerbated by the coronavirus pandemic and new regulations that require better drug testing of drivers (which the ATA supports). And, he says, this issue will get worse in coming years as truck drivers begin to retire. The average age of American truck drivers is 48.
While truckers skew older, trucking is one of the largest occupations in America, with more than 2 million heavy and tractor-trailer truck drivers. The ATA says the real shortage is in "long-haul trucking," which refers to truck drivers who have to travel long distances across state lines. The government estimates that there are between 300,000 and 500,000 long-haul truckers in America. And according to the American Association of Motor Vehicle Administrators, state governments issue more than 450,000 new commercial driver's licenses every year. A large fraction of those drivers enter the long-haul trucking industry.
"It's just simple math," Spencer says. "If every year there are an excess of over 400,000 brand-new drivers created, how could there possibly be a shortage?"
The real problem, Spencer says, is not a shortage but retention. According to the ATA's own statistics, the average annual turnover rate for long-haul truckers at big trucking companies has been greater than 90% for decades. That means, for example, if a company has 10 truckers, nine will be gone within a year or, equivalently, three of their driver positions will have to each be refilled three times in a single year because so many new drivers leave within a few months.
"We have millions of people who have been trained to be heavy-duty truck drivers who are currently not working as heavy-duty truck drivers because the entry-level jobs are terrible," says Steve Viscelli, a sociologist at the University of Pennsylvania who studies the trucking industry.
During a time when outsourcing and automation have eroded opportunities for blue-collar workers, millions of Americans have been enticed into giving driving a try. But, Viscelli says, the business practices of the big trucking companies burn them out fast.
The biggest issue is how the companies pay the truckers. Compared with other blue-collar occupations, the median annual income of trucking is actually pretty good: $47,130. But long-haul truckers commonly work extremely long hours, often 60 to 70 hours per week or more. And drivers are typically not paid by the hour. Instead, they are typically paid only for the number of miles they drive. The average truck driver gets paid 52.3 cents per mile, according to the Department of Transportation. Even if weather or traffic slows them down and extends their working day, they get paid the same. Moreover, they're not compensated for the significant time it takes to load or unload their trucks. And they're not compensated for their "off time," even though they're miles and miles away from home.
Being a long-haul trucker also means living out of your truck, because motels are pretty expensive and often don't have parking for big rigs. Meanwhile, finding parking to rest anywhere is a growing problem. Truckers sacrifice their health, sitting on their butt for hours and hours and eating junk food on the road. And the job is dangerous: Truck drivers are 10 times more likely to be killed on the job than the average worker.
But, Viscelli says, through political lobbying, legal activism and harsh business practices, big trucking companies have made a difficult job even harder, especially for entry-level truckers. He says the companies have been "systematically degrading trucker working conditions." Scholars have referred to trucks as "sweatshops on wheels." Viscelli says the industry is rife with minimum wage violations and what he calls "debt peonage." Basically, new drivers become indentured servants, going deep into debt to get training and to lease trucks from their employers (listen to arecent Planet Money episode about this issue).
While it's a stressful occupation, trucking doesn't have to be this bad. Spencer says companies that treat and pay their drivers better don't have nearly the same issues with retaining their workers.
The debate over whether to call this a retention problem or a shortage may seem like mincing words. But it matters for the solution. The ATA and its allies argue that the "shortage" means the government should further relax regulations and make it easier for anyone to become an interstate truck driver. Insurance and rental car companies know that teenagers are much more likely to get into an accident — which is why they charge them more. But the "shortage"! We need teenagers to do the job!
Frame the issue as a retention crisis, however, and the onus falls on the industry to make long-haul trucking more attractive as a profession. After decades of stagnant wages and shriveling opportunities for blue-collar workers, this is the market working on their behalf for a change: forcing employers to pay workers enough to do a really hard but vital job.
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