Today we received some unexpected good news in the United States as the unemployment rate fell to 8.6%. In Canada the news wasn’t as good as the unemployment rate increased to 7.4 percent. Without counting those people who have given up looking for work or who are underemployed (e.g. performing a job below their level of expertise and education at a wage inferior to what they should be earning), there are about 14 million people unemployed in North America (e.g. 13.3 million in the United States and 1.3 million in Canada).
FTR Associates estimated that there was a shortage of 200,000 drivers in the United States in the first quarter of 2011. How does one explain the fact that out of a pool of 13.3 million unemployed people (plus millions more if you include those who are underemployed), we cannot find 100,000 to 200,000 individuals to fill these jobs?
Here are some thoughts on this apparent anomaly. There were 3.2 million commercial drivers in the United States in 2008, including 1.8 million heavy haul or tractor-trailer drivers, according to the U.S. Labor Department. By May 2010, the number of big rig drivers had dropped 18.4 percent to about 1.5 million. In other words, there are 300,000 drivers that left the labour force that should be available to fill the available jobs. Why is it so hard to convince them to come back to work?
One of the most frequently mentioned reasons is compensation. In the United States, experienced truck drivers can make $50,000 a year at some truckload carriers. According to a BLS survey, the average wage was $39,450 in 2010 while the median wage was $37,770. The survey indicated that 75% earn less than $47,000 per annum.
The trucking industry has a long term practice of paying its drivers by the mile. While there is certain fairness to this approach since it correlates directly with the amount of miles driven and hours worked, it also injects a level of uncertainty into the driver’s weekly pay package. Inconsistent load availability translates into inconsistent pay....