Yves here. Of course, one then wonders how many of the other worker shortage stories are exaggerated. And remember that profits have been at record levels as a percentage of GDP, so the idea that most companies can’t pay more is spurious.
By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street
For the majority, pay has remained flat or has fallen over the past year.
The trucking industry is reverberating with claims that there is a massive driver shortage, that they have trouble recruiting and retaining drivers, and that they have to pay more to recruit and retain them. So here’s what truck drivers are saying.
How much has your salary increased in the past year?
This should be an obvious one. If there is a driver shortage, and if trucking companies have trouble recruiting and retaining drivers, and if they’re fretting about having to pay more to recruit and retain drivers – which would squeeze their profits – then drivers in turn should see this increase in pay.
Turns out, less than a quarter of the truck drivers in the survey experienced pay increases of over 5%. But 59% of the drivers said their pay has remained flat or has even decreased.
The survey was conducted by driving-tests.org, a test preparation service for driver’s licenses. In total, 4,931 truck drivers with commercial driver’s licenses responded. Of them, 2,713 said they had a Class A license; 1,180 had a Class B license; 839 had a Class C license, and 199 had more than one.
In total, 2,925 drivers responded to the question: “How much has your salary increased in the past year?” And this is what they said:
- 12.4%: “My salary has decreased”
- 46.5%: No change in pay
- 16.1%: Pay increased by 0.1% to 5.0%
- 9.2%: Pay increased 5.1% to 10.0%
- 5.2%: Pay increased 10.1% to 15%
- 3.0%: Pay increased 15.1% to 20.0%
- 7.6%: Pay increased more than 20%.
That about 59% of drivers experienced flat or declining pay last year is peculiar because the industry has been singing a different tune. Trucks.comreported in December: “The shortage of drivers and trucks was so great earlier this year that some carriers temporarily turned away orders.” But Trucks.com adds:
Since the deregulation of the trucking industry in 1980, driver pay has trended lower because of increased competition. Drivers today earn about twice as much as the typical service-sector employee. Before deregulation, it was four times as much, said Kenny Vieth, president of ACT Research.
Deregulation “set off a race to the bottom,” said Todd Spencer, president of the 160,000-member Owner-Operators Independent Trucking Association.
“It’s a perpetual hunt for the least expensive labor and flies in the face of seniority or tenure,” Spencer told Trucks.com.
Some private fleet drivers earn upward of $80,000 a year, and they stay with their companies. For-hire drivers at large motor carriers in 2017 earned around $53,000, according to the ATA’s Driver Compensation Study published in March.
Truckers work 55 to 65 hours a week, compared with 42.8 hours for the average full-time worker, according to the U.S. Bureau of Labor Statistics. The labor bureau pegs trucking at roughly $21 an hour, but the actual rate is lower because the workweek is longer.
So the survey by driving-tests.org asked this question, to which 2,519 truck drivers responded:
Why did you originally choose to become a commercial driver? (Check all that apply)
Not quite a quarter of the respondents said it was money. But about 60% cited a passion for one or the other aspect of the job (responses 2, 3, 5, and 6):
- 24.3%: I wanted the competitive salary
- 20.0%: I love operating large vehicles
- 19.6%: I wanted the freedom and independence
- 12.0%: I have good people skills
- 11.0%: I wanted to travel the country
- 9.5%: I thought commercial driving is cool.
- 3.6%: I drove trucks in the military.
And then, a dose of reality. 2,022 drivers responded to this question:
What do you dislike most about commercial driving? (choose one)
- 19.1%: The salary isn’t good enough
- 18.0%: The job can put a strain on my family
- 15.7%: GPS tracking or electronic logging restrict my freedom to work as I want.
- 12.1%: It can be lonely on the road.
- 10.7%: Other
- 8.9%: The job comes with too many risks.
- 8.1%: Self-driving autonomous trucks may decrease demand for commercial drivers.
- 7.4%: The job can adversely affect my health.
Still, most of them are planning to hang in there. This persistence is in part explained by the reasons most of them became truck drivers in the first place: A passion for various aspects of the job, rather than just money (see the second set of responses). In total, 3,811 drivers responded to this question:
Do you plan to leave the commercial driving industry in the next 3 years?
- 85.1%: No
- 10.4% Yes, for another career/opportunity
- 4.5%: Yes, for retirement
Clearly, if the industry really wanted to attract more drivers and retain them, so that it could quit griping about this massive “driver shortage,” then paying drivers more would be a helpful big step – and some trucking companies have been moving in that direction. But clearly, the profit squeeze it might entail is just not a particularly intriguing option for many other trucking companies.
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The Supreme Court just ruled that interstate truck drivers are not subject to mandatory arbitration, no matter what their employment contracts say. Apparently, trucking companies were classifying their drivers as “contractors” despite that the companies set work rules (including 1000 hours of training at no pay and 3000 hours at pay vastly below the minimum wage) then requiring they lease their equipment and purchase fuel from company stores. These provisions pushed their wages so low that some paychecks were negative: the drivers were expected to pay the company to work. The Supreme Court ruling opens the way for class action lawsuits. I can’t say if there ever was a driver shortage though I suspect it’s more likely they wanted a surplus of drivers to drive down wages.
I am pleasantly surprised by this S.C. ruling in favor of labor, or at least not in favor of predatory companies. Thanks.
There appears to be an editing error in this article where it say ‘For the majority, pay has remained flat or has fallen over the past year.’ Should read ‘For the majority, pay has remained flat or has fallen over the past forty years.’ There, that’s better!
As far as I can recall, classic capitalism says that when there is a high demand for something (truck drivers in this case) then they should fetch high prices (or wages in this case). Here the industry does not want to do it. And they want to have a whinge about it. Cue the tiny violins.
I doubt that they can do what Australian miners did by bringing in third-world truck drivers on temporary visas as Trump would blow a fuse about that as the optics would make him look so bad. As nearly 1 in 20 truck drivers are retiring in the next three years I would say that this means a declining pool of truck drivers and the conditions are so crappy few want to go into it as a career.
There is a simple solution here but for the life of me I just can’t think of it.
I am dubious about these surveys. Where are the people who have quit? The trucking companies have been lobbying for many years, back to the Clinton era IIRC, to allow Mexican truckers to drive in the USA. So far Mexican drivers have only been allowed to drive into the US a defined number of miles delivering their cargo that originated in Mexico. (In the recent past the loads from Mexico were transferred to American drivers at the border.)
Because of the relatively strong Teamster union’s ability to keep the Mexican drivers out, the numbers of Mexican trucks and drivers actually coming into the USA has been kept to a minimum. The constant whining by the trucking companies about the manufactured driver shortages (really it’s about a lack of being able to pay Mexican wages to Americans not a shortage of willing drivers) is eroding the ability of the union to keep low wage drivers from Mexico out of the country.
So, importing cheap drivers is a possibility under Trump.
Worse yet, Mexican truck drivers could, per Mexican law, be as young as 18, have far less licensing and testing requirements and, possibly the worst aspect—be driving Mexican maintained and standardized trucks with far safety features.
This is federal interstate law. As a Californian, naive perhaps, I was shocked to see triple trailer trucks in other states on a long road trip. Why not Australian style road trains with ten trailers? Perhaps we could import some really low wage Haitians to drive those–think of the labor savings and “efficiency.”
Triple trailer big rigs are only allowed on specific highways and at specific times of the year (because road conditions). You probably encountered them on an Interstate, likely I-80 in Nevada.
I know there are lies, damn lies, and statistics; but boy, when you can do the math yourself and catch them out… (taking $53,000 as average pay, dividing by 43 hours and 52 weeks and you get that roughly $23 an hour. But WTF, the average work week is 60ish hours for truckers, not 43!! They don’t even care about being caught! – the US department, not Wolf Richter)
Comes out to <$17/hour by my calculations.
to be fair—-the holidays are probably unpaid leave (the unfairness of that’s another story).
So 53k/46 hours/50.5 weeks = roughly $23
The only drivers that make decent take home wages are Teamsters. Most trucking companies are not union shops, which now are mostly the companies that deliver the goods in towns with bob-tail trucks. There are a couple of union long haul companies including UPS that are Teamster, so those drivers are paid very well and UPS picks up all truck charges like fuel. Most UPS long distance goes by rail but there are some shorter routes that drive over the road. Not too much overnight routes. Generally they drive 4 or so hours and meet up with another driver coming the opposite direction and they switch trailers and proceed on.
And, don’t forget that many of non-union drivers want independence and own their own trucks which are very expensive to operate and maintain. They get 4 to 7 mpg. Yearly maintenance can cost thousands and an engine overhaul multiples of that. Trucking companies that hire these drivers pay them a premium but not nearly enough to cover the operating costs (the price of independence). Even when a driver is independent but can’t afford the high purchase price of trucks (new or used) and drive company trucks (getting paid by the mile) the company does not pay for fuel, which can be hundreds of dollars per fill up.
So, the wages are meaningless when the costs are subtracted by the trucking companies.
I am always amazed by how inaccurate the reporting on the trucking industry is. I have always appreciated the coverage it gets here though. That said i think this article doesnt really do it justice and as much as i hate admit it pay rates do seem to have gone up a fair bit in the last 3 years. It is not uncommon to see companies advertise 50 cents a mile for new driver. A few years ago at a lot of companies it seemed like 40 or 45 was the higher end for experienced drivers. I have seen some hour rates rise 15%
All of that said, i would completely agree with the sentiment of the article. There is no driver shortage. Its all about pay.
like pretty much allof the labor market—asymmetrical voices.
And given today’s virtue-signalling media/punditry/clickbait-driven business model—-giving voice to a middle-aged white guy from ex-urban/rural America ain’t sexy enough.
I’ve been behind trucks on CA I-5 with the x cents per mile listed on them and done the math.
If one can average 60MPH, then the pay is $30.00/hour at 50cents/mile.
But when truckers reach their destination (in my driving area that would be either Los Angeles County or the SF bay area), truckers speed should drop dramatically, perhaps to 20-25MPH on clogged freeways in LA for example.
If a trucker spends 90% of his time at 60MPH and 10% at 25mph, then the effective pay rate is
0.9 x $30/hr + 0.1 x $12.5/hr or $28.25/hour (assuming 50c/mile).
The per mile rate is a good way for the employer to push all the variability risks from weather/traffic of the route onto the driver.
totally that.
and given most docks aren’t open 24/7 and/or deliveries have very tight delivery windows, truckers have no choice but to slog out rush hour in the big cities. (eg, Whole Foods produce deliveries have to be delivered within specific windows otherwise the entire shipment can be rejected, even if the delay is only 15 min.)
Lose for the truckers, lose for car commuters who have to share the roads at the busiest times. And invariably anything like a congestion charge eventually would be dumped onto truckers.
“The per mile rate is a good way for the employer to push all the variability risks from weather/traffic of the route onto the driver.”
A few years ago, my spouse and I were driving from Denver to the east coast for a family holiday gathering. A blizzard, with fierce winds and blinding snow, overtook us just west of Lincoln, NE and we holed up for the night. The next morning, we resumed our trip on Interstate 80. The driving was slow, since the roads, although plowed, were still covered with a bumpy, frozen mush.
We immediately saw our first jack knifed trailer truck, lying on its side along the edge of the road. Then a second, in the median. Then a third … I started counting and stopped at 50. Orphans of the storm. Getting paid by the mile, driving in a plains state blizzard makes more sense. You push on, with no visibility on an icy surface, until …. your truck jack knifes and turns over into a cornfield.
And, we notice this because my father-in-law was a union trucker. Retired with a nice pension, a paid-off house and three acres of land.
I presume that the survey did not ask the question:
“Are you a member of a labor union?”
Being anti-diluvian and all, I can recall when truck drivers (including my father) were active, dues-paying, rank-and-file members of the Teamsters or the AFL-CIO or some other labor organization. Organized union truck drivers had better working conditions, better pay and better lives than their non-union brothers.
Such a question would have provided a most useful data point for the survey. From what I can see, this survey and this article begins nowhere and goes nowhere. It is a simple presentation of more neo-liberal related disaffection.
Amen brother ! Was a teamster way back when but left for another “union” job. Now retired in my seventies, am enjoying union provided health care benefits as well as a 401k and a credit union. I still pay taxes too !
Of course, the flat and declining pay of truck drivers has nothing all to do a sky-high rate of immigration flooding the labor market, because as we all know, supply and demand doesn’t apply to wages and profits.
Instead, it’s because of all those trucks being driven by robots. Drive down the highway and just count the number of trucks driven by robots if you don’t believe me! It’s robots that are eliminating the need for human truck drivers and reducing job and employment prospects. And because robots are reducing the need for human truck drivers, we obviously have a massive shortage of truck drivers and need to import even more foreign nationals because American citizens and permanent residents just won’t drive trucks.
It’s that simple, really.
Did you forget your /sarc tag?
there is no driver shortage. i believe i mentioned this before. most large companies are actually MAKING money on operating a training mill, because the government is somehow providing a kickback for training (probably because it is such a vital field, that an actual “driver shortage” would deadlock this country economically), but naturally not for retention. these companies operate on the headhunter strategy to get you into TRAINING and then don’t bother to treat you well enough nor pay you well enough to make sure you stick around. and this is, yes, from my own privately researched anecdotal information knowing and virtually connecting with truckers.
i hope that everyone can realize the implications of this. it is as in any other field of endeavour, especially so-called “unskilled” job: if you treat the employees like crap and pay them peanuts (and yes, truckers are not paid peanuts until you consider the hazards and conditions of the job, plus the amount of responsbility you are placing in their hands), you end up with a demoralized workforce who simply has no better option. the men who stay, stay because they are making more in this industry than in other forms of employment near to home, and some few really like the independence and lifestyle.
if you know what a over the road trucker’s daily living situation is like, from firsthand accounts, it is like living in a jail cell on wheels that you roam around the country in, while trying not to let passenger vehicles inadvertently (on their part, because of their driving ignorance) kill themselves using your truck to do it with. i am on lists on FB and was shown an article recently about a flatbed trucker being killed because a passenger vehicle cut him off, and his load’s inertia drove the load through the cabin. they are risking their lives every day, and taking a toll on their family and social life in order to earn this money. and quite a lot of what they are dragging around could quite probably be put on a train, or produced more locally.
i hate to say it, but my firm opinion is that this industry suffers from being coddled and subsidized by the government in various ways, due to how essential it is. in a more sustainable world. not everything would need to be trucked around map after having been shipped from around the world. the trucker i know realizes the futility of all of this, but also how essential his job currently is to both him and the economy/distribution system.
I recently started reading Oliver Sack’s autobiography On The Move and he describes meeting and travelling with a truck driver who gave him a lift when his motorcycle broke down in the South in the early 60s. The truck driver (independent driver if I recall; don’t have the book with me at the moment) was making ~$35 000 per annum…And those are 1960s dollars.
Driver shortage? Yeah, and I have swampland in Florida to sell.
Same playbook used repeatedly by corporate America in importing foreign “guest” workers such as H-1Bs, L-1, OPTs, H-4s, at the expense of this nation and citizens. These same corporations collude in overstating job openings to DOL and thus directly manipulating US employment statistics. Combined with tens of millions for lobbying/media relations and corporations pocket in the vicinity of $30 trillion per year on this fraud. And, for the record, there is not and never been a shortage of STEM professionals in the U.S. This is about profit and bonuses.
So also look here for fake job openings being reported to DOL and increased lobbying for “guest” workers.