59: O Trucker, Where Art Thou?

there is the freedom. One of the reasons I drove a truck is because I don't like sitting behind a desk. Hello, and welcome back to Bloomberg Benchmark Show about the Global economy. It's Thursday October. I'm Scott Landman, an economics editor with Bloomberg and News in Washington, and I'm Keith Smith, an editor with Bloomberg in New York. Today we're going to turn our attention to one of the biggest economic puzzles of our time, one that seems to be a microcosm

of the U. S. Labor market. It seems like a lot of numbers show it's in great shape, but below the surface, some funky things are going on. And one of those kind of funky things that you're talking about, Scott, is where have all the truck drivers gone? That's right. We'll be talking first with Justin Fox, a columnist for Bloomberg View who has written about this issue, and then with an actual truck driver who happens to be a

close relative of mine. What actually sparked this discussion is a recent article by one of our U S economy reporters, Patricia Eliah. She wrote that one trucking company is getting so desperate for new drivers that they're handing out all kinds of bonuses, including signing bonuses of up to five thousand dollars. And Scott, when I read that, there was just so fascinating to me because the idea of, you know, the signing bonus here in the economy is just it's

so unheard of. That's I mean, that's something that's like reserved for the NFL or the NBA or something like that, certainly not truck drivers from what I would assume. Yeah, I mean I was thinking of these draft picks that get like a million dollar bonus if they're going to be the next hot quarterback or something like that. But um, you know, it's not just the shortage, the shortage of labor that's driving up these bonuses and wage costs for companies.

And Patty explained to me there are a lot of other factors going on. There's an age restriction, you have to be at least twenty one to drive across state lines. Certifications are expensive, truck drivers are aging, It's not an easy job to do, and you're away from home a lot um. So what gives here though? Is there really a worker shortage or are they just not offering high enough wages or something deeper going on. I want to bring in Justin Fox, who's sitting with Kate in our

New York studio. Justin's a calumnist for Bloomberg View and used to be the editorial director at the Harvard Business Review. Justin, thanks for joining us, Thanks for having me so, Justin, you also wrote a column of after seeing Patty's story, and it was trying to figure out what's going on with all of these truck drivers. So I mean, talk to us about kind of some of your main theories. What do you what do you think is the most

plausible here? Well, everybody's been talking a lot about this looming threat of automation, um in trucks and cars and everything else. And I mean one of the interesting things is truck driving. In a time when manufacturing employment has been on this long decline, truck driving has made up for a lot of that, and it's something you don't necessarily need a college education to be able to do.

Traditionally the pay was pretty good and so um. I Actually it happened to be that Patricia's story came out the day before the monthly jobs report for September, and so I like to dig around in the job's report to look at things that other people aren't paying attention to every month, and so I was just I thought, oh, I'll look at trucking employment. And one interesting and somewhat odd thing is it hasn't actually grown since mid two

thousand fifteen. There was a big recovery from the recession, and then it's been pretty much flat since then. And what is that? Because there, you know, maybe there's demand in this one place. I think it was in floor to the Patricia wrote about maybe it's not national, or maybe it's just that trucking companies are having so much trouble getting people. So then I looked at wages in trucking, and I mean that should there's no dramatic developments in

that lately. They haven't suddenly gone way up, although you might not capture these kind of signing bonuses thing in that data anyway, but put some context, So what kind of would be the range of truck driving wages? I'm just I'm just curious if I've totally picked the wrong career choice here. I mean, it's currently looks to be around a little over twenty dollars an hour average hourly earnings of production and non supervisory employees in the trucking industry.

And now the interesting thing is in nineties there was a big truckers made a bunch more than most workers, um and then somewhere around after two thousand that slid down to where it's almost identical to the average private, non farm, non supervisory worker. And how much war was it back in kind of what you were saying, I mean, I'm eyeballing a charge here. It looks like it was

about thirteen dollars to ten dollars. It was significant. One thing, one other thing in Patty's story justin was that, uh, some some companies, trucking companies were also reporting that they needed to find workers, but they were unable to raise wages because they couldn't really raise the prices they were charging. Is that, you know, a broader conundrum in the economy or dilemma? Um, I mean it definitely. These have not been a great few years for trucking companies, and I'm

not exactly sure why that is. I think part of it is just the recession came and sort of goods trade volumes never quite boomed back to where they were before. Maybe people are spending more time buying apps than buying stuff, um so, and and trucking companies in general just had a really tough time, So I would imagine that, I mean, a it's just it's still a competitive enough, competitive enough industry that, um, you know, they can't just set prices

as they will be. There's these new players coming in, like most notably Amazon, that are probably making life tougher for some of the incumbents. And it's also hard to kind of talk about, you know, something like trucking industry. Right, so it doesn't necessarily require a college degree, but it's a steady job, it can pay pretty much. And like as we've been watching this election, unfold. That's one thing that keeps getting brought up. All our jobs are gone,

all our jobs are gone. But in reality it sounds like we're talking about a job where they're having a hard time attracting people. Yeah, but part of that is it's no longer as good a job as it used to be. I mean, the pay used to be better, and we may be hearing later that the work conditions aren't as good. I don't know about that. What about

these stories that have been coming out recently. There's there's one study by former Obama economic advisor Alan Krueger saying that men are men who are out of the labor force, a lot of them are on pain medication. And there's other people citing a study saying men would rather play video games. These are people who have kind of be in the prime age for a trucking job. What do you make of that? I mean, it's really this this puzzle of why there's so many more men out of

the labor force than there used to be. I mean, it's been the steady growth since the sixties, but pretty dramatic um since two thousand and you know, there's a bunch of different different explanations one of them. Part of it is clearly on the the sort of demand for their labor. So manufacturing jobs have declined, trucking jobs are still there, but the pay is not as good. And then there have been these other theories about I mean,

one big one is, um, the incarceration boom. They're just a lot more people with criminal records than there used to be. It's hard for them to get jobs. Um. This video game theory from Eric Hurst, Chicago economist, is just that, I mean, there is evidence that men who are out of the lay refore spend a lot of time playing games or watching TV. And one and I've been thinking about this. When I was a kid and I would be sick home from school, all it was

on TV was game shows and soap operas. Now, if you're stuck at home, there's a lot of fun stuff you can do. And so there is some argument that actually there are other things out there if you've got enough money to get by on and I don't know, you're living in your parents basement and your twenty seven you know the balance wing g Do I want to go drive a truck all day and all night or do I want to play video games? In the basement. Maybe maybe that's a little bit of it, but I

can't believe. I mean, they're really big differences in male labor force participation now between the US and a lot of other wealthy countries. And I think the video games are just as good in Japan and Germany as they are in the US. So I don't know that that explains a whole lot of it. We keep saying male

is obviously this the female statistics don't match well. The problem with the female statistics, it's not problem, is just that when you there's this category of people who are not in the labor force, which means you don't have a job, you're not looking for a job, and UM, in the female category, people who are not in the labor force, half of them are working, but unpaid, work at home, they're taking care of kids, they're taking care of elderly family members. Very small percentage of the men

who aren't in the labor force are doing that. And so all it is is it just makes it hard to compare the two. I think general sense, like with the pain killers, if if you cut out those women who are not in the labor force but are actually working, um, the percentage of men and women who are taking pain killers and aren't in the labor force is about probably

about the same. Interesting All right, well, Justin and Kate, we're going to take a quick break now for a word from our sponsor, and when we're back, we are going to talk with my uncle who spent his whole career as a truck driver. Brought to you by Bank of America Merrill Lynch. Seeing what others have seen, but uncovering what others may not. Global Research that helps you Harness disruption voted top global research from five years running.

Merrill Lynch, Pierce, Venner and Smith Incorporated. Welcome back. Now we're going to bring in a very special guest, someone who knows a lot about the trucking industry because he spent thirty seven years as a truck driver himself and actually now drives a minibus locally. He happens to be my uncle. Kenny Han joins us from his home on Long Island in Central Islip, New York. Hey, uncle Kenny, how's it going. It's going great. How's it going with you? Scott?

All right? So can you just give us a quick recap of your career as a driver and how you got started, Well, um, it was sort of something I had to do. When I was about seventeen years old, I got married and uh I believe it or not, and so I just took whatever job I could get,

you know, and I started driving first. I first started driving a van for florist, but I drove a truck starting when I was eighteen, I started driving for a kitchen cabinet distributor, and then back when around nineteen eighty I got my my tractor trailer license and started driving over the road and then became a teamster in four and worked for the same company for twenty six years. Retired from there and in two thousand and eight, and then got my job with the town of Iliad driving

a minibus transporting seniors. So, Uncle Kenny, if I can ask you a little bit about kind of what does it take to be a truck driver. I mean, I've read some I've read some stories that Bloomberg has written, some some other ones. It sounds like it's a really tough job. It is a tough job. It's not an easy job. It's not one that everybody's gonna like. You're

you're on the road all the time. I mean I spent probably most of my career in twelve to fourteen hour days every you know, five days a week, sometimes even six days. And uh, you know, it's tough on your back, it's tough on your on your home life. It's uh, it's a very difficult job to do. You have to constantly be a you're driving, you know, anybody who drives, even to work knows that it can be pretty stressful. You're doing this with a with a forty

eight thousand pound vehicle. You know that that splits in the middle and can spin around if you don't if you're not careful, and you've got people cutting you off all day. So it's a very stressful, stressful job. How did you how did you balance you know, that job with you know the obviously had had two kids and you know, taking care of them part of the time too. Well.

I was divorced when I was twenty one and a half, so you know, but I did have I did see my kids on weekends, and uh, yeah, it was tough. I mean I was married the second time, and I was married for twenty years, and uh, I think one of the reasons I got divorced the second time was because I was never home and uh, you know, I was always you know, when I came home, I said, come home at eight o'clock at night. I'd have to go to sleep because I have to be back at

work at six the next morning. So it was it affected my home life a real lot. The pay, Like you know, I was listening to what you guys were saying, and uh, I could tell you that I started as a teamster. And now, when I started driving a truck back in nineteen seventy two, you know, the pay was, you know, on par with what most people were making in in you know, in lower level jobs like that. But when I when I became a teamster in the

night four, the pay scale was thirteen twenty three an hour. Now, I worked for the same companies as a teamster for twenty six years, and when I retired, my pay scale was only up to twenty one dollars and changing out, which means in twenty six years we are pay only went up eight dollars an hour. Now, the way I made up for that was by working only over time, because luckily for me, being a teamster was an early job.

But this driver is that you know that like he was saying twenty dollars an hour, you make it twenty dollars an hour. And there's a lot of these trucking companies that don't want to pay you when you have to sit around. They don't want to pay you when you when you're on layover. And so these guys are working twenty four hours around the clock on the road and really not really only getting paid for like maybe ten of those hours. Are that teamsters as active in

the industry now as they work during your time. Well, the teams have been decimated by by the regulation from UM. When I first started driving, there was a hundred and sixty two trucking companies teams to trucking companies, and we're down to two now. One of them is a company I worked for, a BF and the other one is Yellow Roadway, which is a combination of two major companies that had to combine because they weren't making any money and uh, you know, they can't find drivers anymore to

be teams. Is because the pension plans are going into the toilet. And uh, you know, my pension in particular has been cut by nineteen hundred dollars because they because the pension is going broke. So even those were the best jobs in trucking, and those jobs stink. So you can only imagine, you know, working for companies like J Beyond that want to work you like a dog and not pay you anything for for your for your efforts, how hard it is for them to find drivers. If

I can jump in. That just doesn't seem like a long term model, you know. I mean we were talking about how you know you can't these people are having a hard time hiring drivers. I mean, you've been in the industry for quite a long time, you know it intimately. I mean that just seems like a kick go on for very long. It's just not a not a good long term model. It's not it's not a good long

term model, and it's not good for you know. I mean, if if all things were equal, you know, and you worked an eight hour day and you made enough money to pay your bills, um, it would be a decent job. Because you're out there, you're out on the road. I mean, there is the freedom. One of the reasons I drove a truck is because I don't like sitting behind the desk.

But you know, and there is that freedom. But you know, you're not working an eight hour that you're working a call up the fourteen hour day and you're and and it's very hard work. So it's a poor model to begin with. It's always been a poor and to drive a truck. You know where the old wagon train people again know peas where a horse uh where you know they control the horses on on a horse and wagon. You know, so we're still there. So it is it is one of these jobs that you know, people can

can do. It's not it's not it's not a job that's going to move to China or overseas or somewhere else. They're they're going to need truckers to move goods around the country no matter what. You know, it's probably gonna take a long time to become truly automated. I mean, why why can't the Why do you think wages are going to stay low? Why won't they go up? Well, because because there's competition from all corners, you know, the deregulation.

Anybody and everybody opens up a trucking company. You know, the reason why somebody drug companies went out of business was because, uh, you know, when when there was when trucking was regulated, they could control their prices and they could you know, and they were making a decent living there. Prices were set and you know, shippers could not take advantage of one truck and company over another because there were there was you know, lanes that they had to

deal with. But now it's you know, whoever gives them the best price, and there's you know, there's there's like in any other industry, there's dogs out there. They are going to go in there and undercut whoever they can undercutt and uh, you know something, and it doesn't seem to be that service matters as much as how much the pain for the shipping. Kenny, thanks so much for joining us. We're gonna leave it there. Did you want to get in a plug for your own radio show?

A show? I do a Blue Show on w USB ninety one FM on Long Island and at Stonybrook University every other week from ten pm to midnight. It's a great show. I do my friend Jovi, and uh you can listen to it online for anybody who's listening around the country or around the world at w USB dot fm. It's streams. So yeah, thanks for letting me do that because I really love that. That's my that's my passion. Now, all right, I'm gonna check that out. Thank you, Thanks well.

Benchmark will be back next week and until then, you can find us on the Bloomberg Terminal and Bloomberg dot com, as well as on iTunes, pocket casts, and Stitcher. While you're there, take a minute to rate and review the show so more listeners can find us and let us know what you thought of the show. You can talk to us and follow us on Twitter, and you can

find Scott at Scott Landman. You can find me at by Keate Smith, and you can find our guest Justin at a Fox just and my uncle is also on Twitter at at blues Lover three one two Thanks a lot. Brought to you by Bank of America. Meryll Lynch seeing what others have seen, but I'm covering what others may not. Global Research that helps you Harness disruption voted top global research from five years running. Merrill Lynch, Piers, Spender and Smith Incorporated