Monday, January 2, 2012

Another Tragedy: Rising Wages


Bloomberg News recently reported on another tragedy of our economy: companies are going to have to raise wages.  No, seriously, my local paper headlined the story as, “The downside of the upturn: a truck driver shortage.”  

The problem, you see, is that the demand for long-haul truck drivers is increasing faster than the supply—and experienced truck drivers are changing jobs only in exchange for higher wages.  This is not just wishful thinking by the trucking industry, or a temporary shortage.  The U.S. Department of Labor produces estimates of future job demand every year.  The 2011 projection was that employment for truck drivers would increase from 1.798 million to 2.031 million between 2008 and 2018—a 13% increase in jobs.
Where is the “downside” of this?  Trucking companies having to raise wages definitely has a downside—for trucking companies.  Maybe it’s the populist in me, but anytime I see workers in a position to demand higher wages (and especially workers who are not spectacularly paid today), I don’t see a downside.  Long-haul truckers are away from home for weeks at a time, which can’t be easy on those with families; if the only way to solve the shortage is to raise wages into the $60,000 to $90,000 per year area, as some experts suggest may happen, it is time to cheer, not moan.

Of course, shortages of skilled workers can be a serious problem.  Some occupations require years of training to change careers.  Truck driving, however, is not one of them.  The College of Western Idaho (along with many for-profit truck driving schools, and other community colleges around the country), offers a Professional Truck Driving certificate.  It takes fifteen weeks of full-time, day classes to complete, or twenty-three weeks in the evenings and on weekends (for those who are already employed).  And yes, it costs about $5000.  But with a shortage of truck drivers forcing up wages, this seems like a very sensible investment for someone whose old occupation has disappeared, or who is today asking, “Would you like to Super-Size that?”

One of the most sobering facts that you learn as you grow older is that you need to keep adapting to the changing job market.  Sometimes, it is change within an existing occupation.  I am a software engineer—but what I knew how to do in 1980 (programming in assembly language) is nearly gone.  Even what I did ten years ago (embedded development in C) is quite scarce (at least in the Boise area).

For many workers, they cannot simply change within a profession, updating their skills as the market changes, but they may need to completely change their occupation as well.  Sometimes, it is because the jobs have gone offshore, or the job has been automated in some manner.  As an example, there is still demand for traditional machinists—but increasingly the demand is for machinists who can program or operate CNC machine tools.  Programming CNC machine tools is not like computer programming; it is much simpler, but still requires many of the skills of the traditional machinist.

2 comments:

Der Hahn said...

I think we're headed for service economy 2.0 at a pretty good clip. Technology workers were the canary in the coal mine. The next wave is going to be off-shoring but more likely automating virtually any business process that doesn't require fluency in spoken English. If the only thing you do is shuffle paper from one stack to another your job is likely to be gone in five to ten years.

I think some technology jobs might actually make a comeback in the US. As the EU depopulates somebody is going to have to maintain their older computer systems. The company I work for is integrating US and EU computer support for exactly that reason.

w said...

Clayton,

I suspect there is some spin going on in these stories in the press as there has been on the stories about the shortage of programmers has been....

Only time will tell how good the wages situation for truckers will be, and certainly it's better than unskilled labor and service sector jobs, but personally I'm skeptical about it being a great profession for most to get into (unless your only choices are retailing, food service, janitorial, etc).

I suspect the negative view on the ID Statesman site in response to this story is probably closer to the truth (including those who claim to be CDL's that posted there).

The BLS site as I read it shows that most truckers are probably making no more than $40-$45K per year and that at least anecdotally is what many experienced truckers are claiming to be making these days (in the past there were probably a lot more truckers making $60K+ per year than there is now and low time drivers are probably lucky to make $25K).

Another thing is truckers are facing threats similar to those of us in the tech business including you and I---namely the importation of foreign labor via H2B. There is apparently quite a few truck drivers from places like Mexico and Eastern Europe now driving truck and it is driving wages down as Indian programmers and IT workers are doing. I would bet $10K (if I had Romney's money) that more will be allowed and that will drive wages down further..... A somewhat old discussion is at http://askthetrucker.com/foreign-workers-program-for-u-s-trucking-industry/

Then there is all the reality of the stress drivers are put through and the problem of long hours driving with no breaks to walk around, the very tight delivery schedules, and so forth that doesn't make driving a good option for many (though I suppose a guy under 40 might be able to hack it for 5-10 years so maybe a good interim career choice). There is also the dirty secret of meth use by truck drivers...supposedly the restrictions on amount of driving in 24 hours and forced breaks are supposed to reduce that, but some stories seem to dispute that.

The few truck drivers that do make $75K+ per year I suspect are in places like the North East and CA where the industries that manufacture high value items to be shipped are located.

I hope I'm wrong and trucking is getting better, but I'm not ready to bet on that being true!

Cheers,

-walt