The Truck Driver Shortage Is Not New. It's Been Happening Ever Since Deregulation.
Cutting truck driver pay in the name of efficiency was always the point of deregulation. But when you cut slack from the system, you destabilize it.
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There’s a lot of gnashing of teeth about a truck driver shortage these days, because we’re all noticing that stuff isn’t getting to shelves. But is this actually a new phenomenon? Here are some headlines over the years, in reverse chronological order. As you can see, the problem didn’t start in 2021.
March 21, 2019
Feburary 13, 2018
January 3, 2015
February 18, 2014
May 2, 2007
April 5, 2007
October 6, 1997
October 9, 1994
September 25, 1988
Here’s a chart of newspaper articles that contain the words “truck driver shortage” via Newspapers.com. You can see that the problem of trucker shortages, at least if you draw from newspaper articles, started in the late 1980s.
So why did this happen? One popular narrative is that the problem is a result of lower pay over decades. Here’s Paul Krugman making that point.
Why did pay collapse so much? It’s simple. Policy. The Motor Carrier Act of 1980, pushed by Jimmy Carter, ended price regulation for trucking, which had upheld the bargaining power of trucking firms and drivers in a highly cyclical industry. The goal of public price setting wasn’t just about wages, it was also about stabilizing our transportation system and making sure that massive booms and busts didn’t drive too many people or capital assets in and out of the industry.
Conservatives and liberals in the 1970s however decided that this system was a cartel causing inflation, and so set about to destroy it. This destruction started with Richard Nixon, but it was completed by Democrat Jimmy Carter. In the 1970s, left-wing economist Alfred Kahn justified Jimmy Carter’s various deregulatory proposals, which included the Motor Carrier Act, with the very simple statement, “I’d love to see the Teamsters to be worse off.”
And so they are. And we are now all reaping the whirlwind.
Similar history in the UK, with the additional disincentives of increased compliance regulation bourne by drivers, and reduced availability of welfare amenity for drivers on the road (reasonably priced rest stops with good food, bathing, security, etc.). The gap was being covered by cheaper foreign labour that would tolerate the privations of the job for a while (investing their spare wages into post driving opportunities), foreign cabotage (leading to increased accidents on the road from tractors set up for driving on the right in Europe rather than the left in UK/Ireland).
Older drivers retired and reduced citizen entry into the driving as a job.
Matt, I didn't expect a cartel-positive article here. What exactly is your alternative? Re-establish the cartel system and wage/price controls?