Is long-haul trucking really facing a driver shortage?
Is long-haul trucking really facing a driver shortage?
The Bipartisan Infrastructure Act of 2021 certainly was sprawling. Among its many provisions was a required study into how compensation in the long-haul trucking industry relates to keeping drivers in the job, and how it relates to safety.
Among the findings from a committee of experts? Skepticism about the common complaint from trucking companies that they face a persistent labor shortage. Marketplace’s senior economics contributor Chris Farrell in St. Paul has been looking into this, and he spoke with “Marketplace Morning Report” host David Brancaccio. The following is an edited transcript of their conversation.
David Brancaccio: There is a lot of turnover among long-haul drivers, right? I mean, no one thinks it’s easy work. But what’s the reality on the ground that this study finds?
Chris Farrell: The committee applied traditional economic principles to address that question, and their conclusion: Economic reasoning — think supply and demand, for example — doesn’t support assertions of persistent labor shortages.
Brancaccio: All right, so if it’s not “enough drivers,” as it were, what’s going on?
Farrell: So these high rates of driver turnover, they’ve been noticeable since the industry deregulated in the early 1980s. And it’s a competitive industry, and companies compete on price. So to keep costs down, they work their drivers hard, and they require long, irregular work hours. And drivers find it hard to, say, plan for family events. So no wonder they leave the job.
Brancaccio: Yeah, I mean, this is a basic principle that we see in the labor force: Often, when people say “labor shortage,” it’s that people aren’t being paid enough, or that working conditions are not attractive enough.
Farrell: That’s right. And long-haul trucking, the jargon term, it’s a commodity business. Here’s economist Stephen Burks. He’s a former truck driver and professor emeritus of economics at the University of Minnesota Morris. He was on the committee.
Stephen Burks: The industry is extremely competitive. By that, I mean that firms tend to compete with each other on the basis of cost, not on having a fancy brand name, like, say, Apple might, and therefore being able to charge more. And because they compete on the basis of cost, they basically have to minimize or reduce their cost of operation, relative to their revenue, as much as they can.
Brancaccio: Market conditions push management and the trucking companies to try to keep what they pay drivers low, which weighs heavily on the drivers trying to make it work, and then turnover goes up.
Farrell: Yes, so it’s essentially the price of staying in business, right? And the experts also compared wages in the long-haul business to their peers in residential construction from 2006 to 2024. And the long-distance trucker wage was less than residential construction wage.
Burks: The long-distance trucking average wage was always below the residential average wage. That just is not consistent with the idea that, “Oh, there’s a persistent shortage of drivers.” And therefore we’re going to have to raise the wage to bring more in.
Brancaccio: So, as government policy is considered, what’s this? Let younger people drive these trucks?
Farrell: That’s absolutely right. I mean, look: This thought makes many understandably nervous. There’s this pilot program allowing teenagers to become long-haul truckers, and Burks says, considering the industry’s competitive structure, odds are [that] widening the labor pool by inviting teenagers into the business, it could actually increase turnover, David, and lower average wages. And, as we know, younger drivers are, as a group, on average, less safe than older drivers. So the research calls into question the wisdom of expanding the pilot program that was also in that legislation.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
