Arnold Kling  

The Truck Driver Puzzle

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The Debt Story: AD or PSST?... Arnold's Clarification...

An economist who attended a business conference told me that the trucking industry is doing well (probably a sign that the economy overall is improving). However, industry experts foresee a shortage of drivers next year. How is that? Some possibilities:

1. The experts are wrong. In today's economy, there will not be a shortage of truck drivers.

2. While many people are capable of driving a truck, not many of the currently unemployed think of it as their comparative advantage. Instead, they think, "I should not train to become a truck driver, because in the long run I will have a job more suited to my skills."

3. While many people are capable of driving a truck, they associate it with a lifestyle that they do not want.

4. While many people are capable of driving a truck, they associate it with low status, even lower than being unemployed for a long time.

5. Not many people are really capable of driving a truck. (My source says that you do need to pass a drug test.)

If I had to bet, I would probably pick (1). But if one of the other answers turns out to be correct, then I think it speaks well for PSST and poorly for the AS-AD paradigm of homogeneous labor.

p.s. Reading David Henderson's criticism, at first I could not understand his problem. He says that at one time I suggested that it would take a 25 percent cut in wages for workers to be employed, but then more recently I implied it would take a 90 percent cut in wages.

Look, I have no idea how big a cut in pay it would take. My point is that it is large. It would be a lot smaller if workers were willing to accept jobs that are far from their long-term comparative advantage. Taking a job as a truck driver might not even mean a drop in pay for workers who have recently lost their jobs. But people want to find a long-term source of comparative advantage. That is difficult in a complex economy.


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COMMENTS (10 to date)
Ted Levy, MD writes:

Arnold,

I'm shocked you didn't mention what seems to me the most likely explanation of a shortage (combined with extensive long-term unemployment insurance, of course...). I believe truck driving is a licensed profession. You have to invest several months and likely tens of thousands of dollars to get the professional license needed to drive a truck. This is a significant barrier to entry, especially for those who otherwise might strongly consider this job/lifestyle. The WSJ indicated in a front-page article earlier this year that 23% of all jobs in the USA are licensed in this fashion, requiring government,not merely consumer, authorization to ply one's trade. See: Commercial Driver's License at Wikipedia.

Jack writes:

In a related blog post somewhere, seemingly informed commenters said there is regularly a shortage of truck drivers because most applicants are simply not reliable: they fail drug tests, they show up late, they quit, etc.

The pool of reliable potential applicants would rather take up other jobs. A labor economist could better explain why the market doesn't clear: maybe a compensating differentials story (the trucker lifestyle is tough and not conducive to family life); or a status story (being a trucker is more difficult than people think, and the Mother-in-law does not appreciate that it is a solid job), etc.

Ted Levy, MD writes:

Link at end of comment didn't appear. I used the link button, so I don't know why it didn't appear.

The link is to Wikipedia's entry on "Commercial Driver's License"

[Fixed. Link buttons are always a little trickier to use than other buttons, which is why we offer instructions and more info. The easiest way to use them is to first type the words you want the reader to see--in this case, say, Commercial Driver's License. Next, run your cursor over those words to highlight those words in your browser. Finally, after the words are highlighted, then click the link button. The button response will then ask you for the URL to which the reader should be sent. Paste in the URL and hit Return. You can check it in the Preview before you Post a comment. The way you typed it, the Preview would not have shown the link, which would have been a helpful warning that the posted comment wouldn't have shown the link, either. It's kind of like when medical, pill-taking patients don't cotton to having to remove the cotton. To take a pill from a pill bottle: Step one: Read the label and open the pill bottle. Follow all instructions, including if you should eat beforehand or walk afterward. Step two: locate the cotton or any other drying agents. Discard or handle them per instructions. If the instructions say you should take the pill with juice or food, be prepared to do that. Step three: fish out and swallow the pill. And later follow up by checking that you swallowed it accordingly and that there is one less pill in the bottle.--Econlib Ed.]

Peter H writes:

I'd also suggest that if there is a shortage, it is partly related to the fact that jobs for truck drivers tend to be in areas where people may not want to live or easily be able to move. E.g. as I understand it there are large areas of North Dakota where one can find a high 5-figure salary driving a truck (and they'll pay to get you licensed). But, you have to live in North Dakota, and because it's a boomtown, you can't find an apartment or house within 50 miles of your employer's home base. You also may be doing over-the-road trucking which has you away from family for weeks at a time.

People are moving there in droves though (see: no housing in a 50 mile radius), so you may be right that the jobs will be filled.

Bryan Willman writes:

It's 2 through 5 plus the costs noted above.

Some amount of ongoing random drug testing is required. Regulators periodically give grades on the state of equipment which the driver can get dinged for.

The job is by nature high stress in that people are paid by the mile (or by the load which is similar) but have speeds and working times severly limited by regulations. So it can be a lot of hassle for the level of pay.

Further, it's not just "away from home", it's "away from home at truck stops and sleeping in the sleeper cab".

Becky Hargrove writes:

Plus the cost of diesel means not a lot of money left at the end of the month. Just one fill up is comparable to some of those low down payments in the recent go-go days of housing.

jb writes:

I'm not sure how much an impact it's had, but the new CSA 2010 rules may have invalidated a number of drivers with poor safety records.

Scott Sumner writes:

Arnold, When you talk of the AS/AD paradigm of homogeneous labor, you are actually criticizing a specific version of AS/AD, which assumes a completely flat SRAS curve. I happen to like the AS/AD model, but I also think the flat AS curve is preposterous, partly because it relies on the unrealistic assumption of homogenous labor. I assume the SRAS curve is upward-sloping.

mark writes:

I saw an interview on Bloomberg TV last week with an equity analyst who attended that conference. He said the managements attributed the driver shortage entirely to the extended duration of unemployment insurance.

Jeremy, Alabama writes:

I don't know if this alters your perception, but "truck driver" is a very broad category. There are many sought-after subcategories, such as "owner-driver" and "husband-wife team". These attributes require far more investment and commitment than "truck driver", so (presumably) take on more risk, are rarer, and make more money.

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