According to this NY Times article, the biggest single problem with supply chains in the US is a shortage of truckers. People throw around numbers like 80,000 for the shortfall in drivers. It's gotten so bad that trucking companies are actually raising wages, which has always been my test of whether workers are really in short supply; some of the companies the Times contacted say they have raised compensation by 20%.
But really long-haul trucking is a tough life, weeks at a time on the road, paying a decent but unspectacular wage of $75,000-$85,000 a year. Most long-haul truckers come from rural areas where there isn't much other work, and one of the trends driving the shortage is probably the emptying out of those areas as people move to growing cities. The bottom line is that people just don't want the work enough to do it.
There are possible solutions. In the long term, it will be self-driving trucks, but that seems to be one of those things that keeps being five years away. Allowing Mexican drivers to operate in the US came up back in the 1990s when NAFTA was being negotiated, but the wage disparity is so great that US truckers threatened a total shutdown and that idea was shelved. I wonder why more freight isn't being shipped by rail, especially stuff that arrives in ports and therefore can't be perishable.
At a deeper level, I wonder how this relates to the big picture question of how Americans feel about work. What happens if most people decide that long-haul trucking, and hundreds of other tough jobs, simply aren't worth it? Or is that attitude just a temporary effect of the pandemic, set to disappear in the next recession?
I wonder how big the disconnect is between the work that our economy needs and the work that people want to do. It strikes me as possible that the rich countries could face shortages of all kinds of workers, which will mean either accepting more immigrants, and thus more bad politics, or re-arranging the economy in as-yet unforeseen ways?
UPDATE: Kevin Drum says there is not shortage of drivers overall, just at the ports, which independent truckers are avoiding because of long waits for loads. This seems weird to me; I mean, if there is a shortage of trucks at the ports, shouldn't that make the wait time go down? The more I read about this, the less I understand.
Truck driver salaries have fallen by as much as 50% since the 1970s — and experts say a little-known law explains why
ReplyDeletehttps://www.businessinsider.com/truck-driver-salary-decrease-pay-cut-2018-9
Stagnant wages, deregulation, de-unionization... all the usual suspects.
Truckers in the present day work longer hours, under worse conditions, for less pay and fewer benefits, with less job security, and less collective bargaining power. Is it any wonder that people don't want the job anymore?
A deal that was attractive in the seventies might not even be good enough today due to people generally having better options for how to live their lives. But add to that the fact that the modern day deal isn't anywhere near as good? Good grief.
I am beginning to think that if we in America want our "stuff," we are going to accept having to pay more for it... perhaps a lot more. Now, will people stop buying "stuff," demand employers pay them more, or what?
ReplyDeleteThe attack on the unionization of trucking is actually a good case for considering the plusses and minuses. Yes, unionized truckers got better pay and better working conditions. But they were in bed with organized crime (remember Jimmy Hoffa) and horribly racist, effectively barring black drivers from interstate trucking. The system only worked because they kept out competition by every means. The regulated system created all kinds of corruption, as union bosses and trucking companies used political influence to limit competition on profitable routes. Losses to theft were high, because the truckers were making deals with mobsters to funnel goods to them. The cost to consumers was also high.
ReplyDeleteI think the sort of systems we developed in the 1950s-1970s for trucking, airlines, and many other industries really were unfair, corrupt, and anti-growth, and that the question of whether that was worse than the system we have now is not simple.
@John
ReplyDeleteInteresting. Your comment reminds me of this article, which I found fascinating: https://www.nytimes.com/2021/09/29/magazine/sopranos.html?searchResultPosition=2
I didn't actually watch "The Sopranos" but this article made me want to.
@John
ReplyDeleteThe solution to organized crime and corruption is not de-unionization - it's actually bothering to root out crime and corruption.
Unions didn't create the mafia - the mafia simply exploited extant unions. They don't need unions in the present day, because now they operate via other channels and prioritize different things. They used to make money through blatant corruption and brazen "protection" rackets - now they make money discreetly by quietly selling drugs, running scams, and frequently operating like a megacorporation.
Plenty of other countries manage to have strong unions and yet still keep organized crime and corruption from exploiting them. The solution isn't industry deregulation - the solution is effective legislation and law enforcement. You don't combat organized crime by removing regulations. You combat it by adding new ones to make it harder for the criminals to operate, or carefully adjusting old ones.
One could argue that the deregulation of the trucking industry was a necessary measure meant to combat the mafia - but if that's the case, why does it remain in effect when the pendulum has swung all the way to the other extreme, and there's no longer any necessity for such lax regulations? We've clearly overcompensated and created a whole new set of problems to deal with.
The problem wasn't regulation overall. The problem was the specific corrupt / exploitable regulations that the mafia started helping into place more than three quarters of a century ago, and that they kept building upon for decades afterwards. Needing to get rid of bad regulations doesn't mean you don't need to then replace them with good regulations afterwards.
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All of that said, the note about the cost to consumers is somewhat accurate - but it fails to recognize that 1) the cost wasn't reduced, it just got shuffled around, and 2) truck drivers are consumers themselves.
Companies used to pass the cost onto the consumer by charging higher prices (all the while keeping their own profit margins nice and plump). Nowadays, the consumer pays less, but it's the employees who are the ones paying the difference. In both cases, the people at the top make sure they don't lose a single red cent. They didn't need to actually fix anything, they simply had to change who was left holding the bag, and ensure (as ever) that it wasn't them.
And ultimately, the cost is still actually being passed onto the consumers, because "the consumers" includes the now poorer truckers, as well as all the other employees in virtually every field and industry whose wages have been stagnant since the 1970s. Worker productivity has multiplied several times over in the past few decades, and yet wages haven't even kept up with basic inflation, much less grown proportionally to productivity. The same labor produces far more profit for companies, and yet the workers (who are the consumers) don't receive commensurate compensation for it. They're being ripped off, and intentionally so.
Who actually had their costs reduced? The usual suspects - the people at the top: executives, owners, bankers, and investors. It's the same old scam as ever - squeeze the masses and enrich the elites - they just changed which shell they're pretending the ball is hidden under.
@G- well, sure, if we had honest, thrifty citizens willing to report their friends and relations for criminal acts, we could have honest unions like they do in Germany. But for American truckers, the result of union empowerment was that mobsters looted the pension fund to build Las Vegas.
ReplyDeleteNot that I'm letting businessmen off the hook; I support strong regulation of business, because I don't trust them either. I just think that wishing for the good old days of union trucking is too easy, because that system didn't work, either.