Driver Shortage? Not So Fast

Estimated Reading Time: 4 minutes

Something most people don’t think about when they see an 18-wheeler rolling down the road? Corporate welfare.

Something many people do think about when they see that 18-wheeler, especially when following one down the interstate and staring at the ubiquitous ads that indicate that many companies are hiring, is the “truck driver shortage.” You’ve all seen them on the rear doors of many a trailer, or perhaps even on roadside billboards. They are also a regular fixture on local television news advertising spots.

Truckers, if these ads are to be believed, appear to be in high demand. The problem is that this supposed shortage, as it has been described for decades by corporate lobbying groups like the American Trucking Association, is not real at all. Trucking has a retention problem, and the industry, rather than correcting various issues that cause drivers to quit, has come to rely on a system of stealth corporate welfare which is masked as a jobs program.

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Scratch beneath the surface of the ad copy for any truck driver training school, or local- and state-funded retraining programs, and government grants and subsidies become immediately apparent. From funds doled out by The Workforce Innovation and Opportunity Act (WIOA) to Pell Grants to $47 million in extra funding from the Biden Administration, it is clear that the trucking industry is awash in taxpayer largesse.

In a recent study examining driver retention problems in California, it was discovered that the state spent around $20 million on driver training, but found all that was being financed was a revolving door, as those drivers did not stick with the industry. Extrapolate that to the rest of the country, and you will see at minimum hundreds of millions of dollars being wasted on many large trucking firms, many of whom burn through 92 percent of their drivers annually.

Despite this problem of driver retention never being solved, the money continues to flow. A growing number of observers, however, from across various parts of government, academia, and within the industry itself, are finally beginning to notice the pattern, and they are questioning the narrative.

From TIME magazine to Business Insider to the trucking industry’s number-one data analytics firm, FreightWaves, the unseen factors which drive this narrative are coming into view. When added to reports from the Bureau of Labor Statistics, which indicate that the labor market for truckers is working just fine, and statistics compiled by CDL-Drivers Unlimited showing that there are nearly three times as many licensed drivers as jobs available, one has to wonder why the government doesn’t cut the industry off and tell them to solve their own problems.

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Frederic Bastiat comes to mind when we see actors like the ATA and its members claim a consistent shortage of truck drivers, in spite of all this evidence to the contrary.

From the opening of Bastiat’s seminal essay “That Which Is Seen, and That Which Is Not Seen,” published in 1850:

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause — it is seen. The others unfold in succession — they are not seen: it is well for us if they are foreseen. Between a good and a bad economist this constitutes the whole difference — the one takes account of the visible effect; the other takes account both of the effects which are seen and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favorable, the ultimate consequences are fatal, and the converse.

We are told by the ATA, and by the media who ape their press releases, that there is a perpetual driver shortage, when, in fact, what the industry has is a retention problem. The Unseen, in Bastiat’s dictum, is any discussion of retention, as such, or how the economy seems to keep moving and the goods delivered in spite of an alleged acute shortage.

The ATA and its membership have come up with a not-so-novel method of replacing drivers who are continually hanging up the keys — sending the bill for truck-driver training to the taxpayer, a method which has allowed them to get lazy and not solve their own problems.

Trucking is a difficult job whose average pay does not account for the very long hours, days, and weeks truckers spend away from home. The pay structure also consistently fails to account for drivers’ time, with the resulting consequence that many truckers are compelled to waste incredible amounts of their time at customer facilities. It has been shown that on any given day, upwards of 40 percent of American trucking capacity is being detained and not moving. 

Rather than work with shippers and receivers to fix these issues, the trucking industry has decided that it is more cost-effective to stick taxpayers with the bill for replacing truckers who, having discovered that the business neither respects nor pays for their time, make the rational choice to quit. As mentioned above, a significant majority of large carriers have an annual driver turnover rate approaching 100 percent, and given that truck drivers are also exempted from federal overtime pay requirements, these turnover rates shouldn’t be a surprise.

Another consequence of this ‘churn,’ as it is called, is that there is always a very high number of rookie drivers on the road, who tend to get involved in accidents at a higher rate.

University of Pennsylvania Sociologist Steve Viscelli, in his 2016 book The Big Rig: Trucking and The Decline of The American Dream documents the many methods the industry has employed to avoid dealing with its intrinsic problems, which download many of the costs onto others, including the taxpayer. According to Viscelli, “The trucking industry has discovered that it is more cost-effective to keep the churn going, rather than increase drivers wages and improve working conditions.”

It is pretty clear that what is unseen by many, and deliberately made and kept that way, is a system of corporate welfare that undergirds a critical aspect of the nation’s supply chain. The fatal consequences, per the Bastiat dictum, are less safe roads and an unnatural depression of wages, which have many second-order effects on the economy.

It is not in the interest of the taxpayer or society at large to be handed the bill because the trucking industry and its clients will not solve their own problems.

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This article was published by AIER, The American Institute for Economic Research, and is reproduced with permission.

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