Most of the reports today focused on the not-so-pleasant situation of trucking today. Benjamin Snyder of Slate described the trucking industry as “dog-eat-dog industry that made it difficult for small companies to thrive.” It was a point of view that Ross A. Marchand of Economics 21 disagreed with.
Snyder mentioned the falling wages of today’s American truck driver. While Snyder simply noted the wage drop, Marchand took it upon himself to compare statistics between annual wages.
Marchand used 1976 as a barometer to compare annual wages to the reported annual wages for 2016. Deregulation officially hit the trucking industry with the passage of the Motor Carrier Act of 1980. Still, deregulation as a factor was analyzed to see how it affected yearly wages.
In 1976, the annual wages reported were at $78,000 “in real terms.” Using Bureau of Labor Statistics data, Marchand that information to 2016’s reported annual wages of $41,000, showing a large disparity.
One aspect that served beneficial to the trucking industry was the increase in independent drivers “who contracted out to different firms.” Deregulation meant opportunities for more players to participate in the game, making the competition fiercer. The Trucking Alliance even went as far as describing the competition as “a battle to the death.” This was a time when mobile app-based freight services didn’t even exist.
Independent truck drivers enjoy the perks of not being tied to a company. But freedom pays a price. This is according to a report from the American Trucking Associations (ATA) noting how “truckers in exclusive private arrangements make $73,000 a year,” slightly higher than the estimated yearly wage reported in 1976.
The estimate was based on a perception that contemporary trucking is “safer.” The only aspect where the independent contractors could beat their counterparts was in terms of higher pay satisfaction. Having control of their own finances gave them the potential to earn $100,000 or more annually.
Not all truck drivers are willing to embrace the independent contractor option despite updated data on how lucrative it has become to be your own boss. Still, about half of the 1.5 million truck drivers would still go for the salaried positions as opposed to contractual jobs.
Bankruptcies that trickled down to lost jobs serve as a grim reminder of how a truck driver still has enough time to decide to keep on signing up for salaried trucking jobs or to take the high-paying independent contractor’s life despite the high risks involved. If the high risks are worth the higher income potential for truckers, they will eventually take their trucking career by the horns as this sector goes bullish. At least truck drivers now have viable options instead of just getting stuck in “employee mode.”