• Truck Driver pay Federal Express and UPS
  • online shoppingCan higher wages create an economic downturn
  • What causes recession
  • Who will lose the most from higher driver pay


Truck driver wages and high paying truck driving jobs have been in the news a lot lately. Many of us know the ELD Mandate has created a driver shortage that has made trucking companies realize how many hours drivers work, which has led to excellent wage growth for the industry. The average pay per mile truck driver wage has not increased as much as some of the highest paying trucking jobs.

We all know the highest paying trucking jobs are with companies such as Federal Express, UPS, Wal-Mart, and some soda pop drivers. These drivers have seen the bulk of the wage increases, and they are involved in local deliveries, overnight freight, and LTL freight. The economy has made great strides these last couple of years, but are these higher wages going to dampen this growth?

If one follows the trucking news, you have probably noticed an increase in stories about higher driver wages creating an economic downturn or even a recession. We should take into consideration all the other expenses that have increased over the last few years, such as fuel, maintenance, the added cost of the ELDs and other government regulation, state and federal. I think a lot of this develops because of the never-ending news cycle and when the media need to fill space, they throw in a story about trucking or the homeless.

What Causes Economic Downturn

What got me interested in writing this article was the story from Connecticut about the state creating truck-only toll bridges, following along with their neighbors Rhode Island. The Federal Government and states are not afraid to raise taxes or fees for trucks only, but when it comes to driver wages, they act like it is the end of the world, when in fact it means more tax revenue for the state.

Will higher wages create an economic downturn? The short answer is no; an economic downturn is an overall slowdown in economic movement over a continued period. The main features of an economic downturn include rising unemployment, declining share and house values, weak consumer confidence and decreasing investment.

An economic downturn, if not addressed quickly, will lead to a recession as these problems cannot continue. Lower wages and unemployment will cause an economic downturn way before higher salaries will.

These past months have not seen anything as described above; if anything employment numbers have risen so much so that employers cannot find workers. The Black Friday sales this past week were at record highs, and it is predicted we will have record sales this holiday season, so consumer confidence is at an all-time high. What may happen in the future is anybody’s guess, but at present, we are not anywhere near an economic downturn.


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What Causes Economic Recession

What about an economic recession? Economic recessions are created by a decline of business and consumer trust. As confidence drops, so does the need. The lack of confidence causes consumers to quit buying and shift into defensive mode. Another cause of a recession is high-interest rates. When interest rates rise, they limit liquidity, which is the amount of money available to invest. The largest culprit in this is the Federal Reserve, which frequently raises interest rates to preserve the value of the dollar.

Many things created the recent recession which started before 2008, but it was mainly a housing bubble that first got the ball rolling. Low-interest rates in 2004 and 2005 helped shape the housing bubble. Ridiculous enthusiasm set in as many investors took advantage of low rates to buy homes to resell. Others purchased homes they could not afford because of interest-only loans.

Housing prices started to decline in 2006 which caused the bubble to burst, and this caught many homeowners off guard. Several had taken loans with limited money down. They soon understood they would suffer a considerable loss, by selling the house for less than their mortgage, so they foreclosed. An escalating foreclosure rate panicked several banks and hedge funds.

By August 2007, banks grew afraid to loan to each other because they did not want these toxic loans as collateral. Because lending essentially dried up, it created significant problems for corporations, and many were forced to lay off employees. Unemployment rose to ten percent and this continued into 2011.

Some of the above information is from www.thebalance.com

The Media

Our twenty-four-hour news cycle leaves the major media corporations with a lot of time to find stories to fill up all their airtime. Any time a newspaper needs a story to fill in the blank pages or the TV news need to fill a time slot on their evening news they turn to stories about trucking or homeless people. Such is the case in the recent story in the Washington Post where they had a story about how “America’s Severe Trucker Shortage” could weaken the economy. The piece highlights the popular grievances from employers about how they can’t get anyone to work for them no matter how much he or she pays; the data shows they aren’t trying very hard.


truck driver pay


As the figures reveal, the actual hourly wage for employees in the business is still more than 10 percent below its 1990 peak. While this would include some workers who are not truckers (for example, the people handling orders), truckers would be the bulk of employees, and indeed, if their pay were rising rapidly, it would show up in the data.

The piece introduces this ridiculous assertion: “economists say if competition for truckers pushes up prices so quickly that the country faces uncontrolled inflation, which can easily lead to a recession,” although it does not name any economists who say anything like this. There are a little fewer than 1.3 million production and non-supervisory employees in the trucking industry. Assume driver pay increased an average of $20,000 more a year, which would be more than a 40 percent increase. (The Bureau of Labor Statistics puts their average salary currently at just $46,000 a year.)

This huge pay increase would then add $20 billion to costs in the economy, or roughly 0.1 percent of GDP. (It’s a bit less than 10 percent of what we pay our doctors each year.) Can we find any economist who will say this will lead to out of control inflation?

Some of the above figures are from cepr.net/blogs/beat-the-press

The Popularity of Online Shoppingdrone delivery

It has always been my opinion that present-day drivers should be making about $120,000 per year. There are several articles out there that say when you factor in inflation that since 1990 that if driver wages had kept up with inflation that would be the case. However, we can say that drivers who work for companies that deliver the packages associated with online shopping giants such as Amazon, Wal-Mart, and all the many others out are making more money than the rest, but are not close to the $120,000 salary yet.

Online shopping has developed along with the home computer. Shortly after Apple developed the home computer that was made accessible to use for the public, online stores sprang up. The initial secure retail transaction over the Web was launched in 1994 by NetMarket or Internet Shopping Network. Immediately after, Amazon.com started its online shopping site in 1995, and eBay was also introduced in 1995 and internet shopping has exploded in popularity each year since.

The sum of U.S. online retail sales in 2017 grew faster than 2011, and you might have guessed Amazon was credited for much of the increases. People in the U.S. spent $453.46 billion on the web for internet bargains in 2017. CNBC reported on Nov 27, 2018, that Cyber Monday sales this year climbed to fresh highs, with a record $7.9 billion spent online that day, an improvement of 19.3 percent from a year ago, this according to data from Adobe Analytics.

FedEx expects to see a record number of packages delivered this year with somewhere above 19.8 million packages delivered on Dec 20, the busiest day of the shopping season. Moreover, their rivals UPS expects to deliver more than 28 million packages on the same day. Of course, these numbers are not exact, but how many airplanes, trucks, and truck drivers does it take to haul and deliver somewhere in the vicinity of 47 million packages?

My Thoughts

I know the average truck driver, and their families are not going to complain about higher pay and more benefits; so why do some in the media try to scare the public about higher wages creating an economic slowdown? As we have talked about lower salaries and unemployment can be the cause of an economic downturn. Higher wages all around put more money into our economy and creates more revenue for everyone, the small businesses, corporations, and the government. Read one of my earlier article about what companies could do to retain good drivers 6 Things to Slow Truck Driver Turnover.

High paying truck driving jobs are not going to hurt the economy, and other things such as fuel, maintenance, taxes, and government regulations are factored in when we talk about freight rates. Rates have been ridiculously low for many years now and the same holds, they are not going to harm the economy. Higher rates put more into the economy as it encourages companies to buy newer equipment and invest more of their profits.

The only sector of our economy that may be harmed by higher wages would be online shopping such as Amazon. Others that could notice a crunch would be trucking companies that are engaged in LTL and air freight. Online shopping companies may have to cut out overnight deliveries or free shipping to stay profitable.

Consumers may end up paying more for their packages and not have their free shipping anymore, which could slow business for the major online shopping stores such as Amazon, eBay, or Wal-Mart. In the end, no one should be afraid to pay truck drivers what he or she should be paid. It will only improve our economy.

Thank You for reading my Blog, and Your Comments are Welcome!!


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