The Myth of the Truck Driver Shortage

Republican lawmakers have been convinced the state needs more truck drivers and rather than waiting for the free market to solve the problem, as conservatives of yore would have insisted, have decided they have the solution: to essentially subsidize the industry.

The bill would require the state Department of Transportation to offer scholarships paying up to 50 percent of the cost of tuition for commercial driver training programs and would provide grants of $500 to individuals and trucking companies if graduates of these programs stay with their employer for more than a year, as Wisconsin Public Radio has reported.

Curiously, though the bill is aimed at workers, there were no labor representatives pushing it. The bill is supported by the Wisconsin Automobile & Truck Dealers Association, Wisconsin Truck Group and Wisconsin’s mega-trucking firm Schneider National, Inc.

Those scholarships are needed, these groups noted, because the nation faces a shortage of 80,000 truck drivers, according to the American Trucking Association.

Observers might wonder how a Wisconsin program can address a nationwide shortage like this, but that’s only the beginning of the problems with this proposal. Dan Johnson, vice president of the Wisconsin Motor Carriers Association, let the cat of the bag when he noted the shortage goes back years and admitted what sounds like a classic supply-and-demand issue, “that drivers are moving from one company to the next based on benefits, compensation, whatever they’re offering as incentives.”

In short, companies who pay more are attracting more workers, a concept thoroughly covered in Economics 101.

As for the idea of a truck driver shortage, if anything there is an oversupply. As a story in Time reported: “in California alone, there are 640,445 people who hold active Class A and Class B commercial driver’s licenses, according to the Department of Motor Vehicles. Meanwhile there are only 140,000 ‘truck transportation’ jobs in the state, according to the state Employment Development Department.”

Nationally, “there are in fact millions of truck drivers — people who have commercial driver’s licenses — who are not driving trucks and are not using those commercial driving licenses, more than we would even need,” as Michael Belzer, a trucking industry expert at Wayne State University, told Vox. “That’s because people have gotten recruited into this job, maybe paid to get trained in this job, and realize, ‘This is not for me.’”

“It’s pretty simple,” added Joe Michel, executive director for the Alaska Trucking Association: “Pay them more, treat them better, they’ll stick around.”

As a story in Forbes noted, truck driving is “a grueling way to make a living. You’re on the road most of your life. If you have a family, you don’t see them for months at a time. Stopping at small rest stations, local diners and low quality motels leave the driver susceptible to catching COVID-19. The trucker is then stuck in some small town in the middle of the country, far away from family and friends to help take care of them… Many truckers also bear the burden of gas, insurance and maintenance costs, which reduces their take-home pay.”

In fact the pay for truck drivers has been declining for decades. Total employee compensation fell 44% between 1977 and 1987, as Steve Viscelli, a University of Pennsylvania sociologist and author of the book The Big Rig: Trucking and the Decline of the American Dream, told Time. “Today, drivers get paid about 40% less than they did in the late 1970s, Viscelli says, but are twice as productive as they were then.”

“Deregulation of the trucking industry, which accelerated in the 1980s, alongside the decline of unions, means trucker wages have been shrinking for years,” Vox reported. “But the work itself hasn’t really changed. It involves long hours, and a lot of that can be time spent uncompensated. ‘You could spend all day or a day and a night waiting around to get a load at a port site offloaded and loaded up, and you’re not getting paid for any of that time,’ said Matthew Hockenberry, a professor at Fordham University who studies the media of global production.”

All of which helps explain why there is massive turnover of truck drivers, who try the job and then quit. “Turnover for truck drivers in fleets with more than $30 million of annual revenue was 92% at the end of 2020, meaning roughly 9 out of every 10 drivers will no longer be working for that company in a year,” Time reported.

So why don’t trucking companies simply pay workers more? Wisconsin’s leader in the industry, Schneider National, is a $4.6 billion company that has plenty of money to pay its top five executives, who together earned $11 million in 2020, led by CEO Mark B. Rourke, who took home more than $5 million. They would argue they must be paid this astounding level of compensation because the market requires it. But when it comes to a shortage of drivers, they won’t pay enough to get the steady drivers they need. Instead they are asking for the state to subsidize private training programs for workers.

But it is not just about decisions by trucking companies. As Time noted, “it’s not easy for trucking companies to just pay drivers more. If they tell a major retailer like Walmart that they’re raising the cost to haul a load, Walmart will only find a trucking company that can do it for cheaper.”

This is a system-wide problem in a national economy that has for decades driven down worker wages while increasing pay for top executives at a stratospheric rate. Since 1978 CEO pay has risen by 940% while average worker pay has risen by 12%, as Urban Milwaukee has computed. And now, in the wake of the pandemic, we are seeing a wave of workers dropping out, demanding higher pay or trying to unionize. Truck drivers aren’t the only workers in short supply.

The Wisconsin Republicans’ approach to the problem of trained drivers refusing to work for bad pay and working conditions was already tried by California, which spent millions to help train yet more drivers, only to find that most graduates never joined or stayed in the industry. Now the state has tried something else, passing a landmark bill targeting the gig economy and which reclassifies truck drivers from independent contractors to employees. That might force companies to stop exploiting workers. But first the courts will have to rule against the California Trucking Association, which has filed a lawsuit challenging the law. Needless to say, there won’t be any such law proposed by Wisconsin’s Republican legislators.