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Truck driver wages haven't grown industry-wide; just at certain parcel and LTL carriers
Chris Spear, President of the American Trucking Associations (ATA), recently claimed that truck driver wages increased during the recession, suggesting a shortage of truck drivers in the United States. However, data from the Bureau of Labor Statistics (BLS) paints a different picture, raising questions about the validity of Spears’ assertion.
To understand the complexity of the issue, it’s crucial to examine the inflation-adjusted wage data for Heavy and Tractor-Trailer Truck Drivers (SOC 53-3032) from BLS. Since 2010, the real wages for heavy and tractor-trailer truck drivers have increased by a mere 1.1%. This figure suggests a stagnation in wage growth when adjusted for inflation, contradicting Spear’s claim of a robust increase indicative of a labor shortage.
The narrative of a driver shortage, often promoted by the ATA, posits that there aren’t enough drivers to meet the freight demand, which should naturally push wages higher. Spear pointed to a 19% rise in wages during the freight recession as evidence. However, this claim fails to consider the broader freight market’s dynamics and the influence of specific sectors, such as unionized drivers who work under different contractual conditions.
An illustrative example is the 2023 contract secured by UPS drivers, negotiated by the Teamsters Union. These drivers are set to make an average of $170,000 in pay and benefits by the end of a five-year contract, a stark contrast to the relatively stagnant wages in the broader trucking sector. This generous compensation package is a result of union negotiations rather than market-driven forces resulting from a purported shortage, and kept parcel driver wages growing while truckload market rates collapsed.
The discrepancy between the UPS situation and the general trucking industry highlights an important distinction. While UPS drivers enjoy substantial wage gains due to collective bargaining, the overall industry’s wages have not experienced similar growth. This suggests that factors other than a simple supply-demand imbalance, such as union strength and negotiation power, play a significant role in determining driver compensation.
Furthermore, the discourse around a driver shortage is often challenged by organizations like the Owner-Operator Independent Drivers Association (OOIDA). They argue that the industry’s primary issue is not a shortage of drivers but rather a retention problem driven by poor working conditions and low pay. Turnover rates in the truckload sector can reach 80% to 90%, substantially higher than those in less-than-truckload operations, where turnover is about 10% to 15%. These figures point to dissatisfaction among drivers, who constantly seek better-paying opportunities rather than an absence of sufficient drivers.
Additionally, the broader economic conditions during the recession must be considered. According to BLS data, nominal truck driver wages have increased by 45.6% since 2010. However, when measured against the Consumer Price Index, which rose by 43.9% over the same period, the real wage growth remains minimal. In certain years like 2015, 2021, and 2022, truck driver wage growth even lagged behind inflation, indicating a decline in real wages.
The discussion around truck driver wages and the alleged shortage is further complicated by the diverse opinions within the trucking industry itself. For instance, during a Senate subcommittee hearing, ATA and OOIDA representatives debated the existence and effect of the driver shortage, with ATA emphasizing a driver gap and OOIDA highlighting turnover as the primary challenge.
It’s clear that while a narrative of a driver shortage might serve particular interests by encouraging new entrants into the industry and maintaining a cap on wage growth, the real story is one of nuanced economic dynamics and sector-specific realities. Unionized environments, exemplified by the UPS agreement, show how collective bargaining can significantly impact wages, while the general market’s wage performance indicates other underlying issues beyond mere scarcity.
Spears’ claims of increased truck driver wages signaling a shortage do not hold up against the comprehensive wage data analysis adjusted for inflation. The reality of the trucking industry is complex and layered, with union negotiations and retention challenges playing substantial roles in wage evolution.