Imbalances between the supply and demand for labor naturally occur from time to time in various industries. Left to their own, these problems will self-correct as wage rates adjust and those seeking employment change to bring the market for labor back into balance.
But government planners, AKA Liberals and RINOs, typically rush in to “fix” the problem. This simply distorts the market for labor and generates an artificial “solution” that is based on central planners’ desires.
Once central planners distort the market, it becomes necessary for them to continue to do so. They have ignored market forces, so future dislocations demanding action are assured. It’s bad policy, but it is great job security for these government planners.
The Western Journal reports on a major imbalance in the supply and demand for labor in one of our vital industries.
The U.S. trucking industry is facing a shortage of drivers, a growing problem that could have major ramifications for the U.S. economy.
According to an October 2017 report from the American Trucking Associations, the industry as a whole needs to hire about 900,000 additional drivers just to keep up with rising demand.
That’s good news if you drive a truck or are considering that as a career.
And this is no minor industry in the US. In fact, it’s vital to our economy.
Truckers are crucial to the U.S. economy, with the ATA estimating that more than 70 percent “of all freight tonnage is moved on the nation’s highways.”
And as Bloomberg reports: The trucking industry is unique because it’s the lifeblood of moving goods around the country …
Without enough trucks and drivers on the road, some combination of things is going to happen: Shipments will be delayed, and producers will have to pay higher prices to get goods to market.
Attempts are being made to explain the causes of the shortage. But these are just details describing the problem rather than explanations as to why it exists.
Part of the reason for the driver shortage has to do with demographics. The Bureau of Labor Statistics estimated that in 2016, the average trucker was 55 years old. Moreover, 94 percent of drivers are men.
“Demographics are working against the industry,” Leathers said.
Market-based solutions are addressing the problem as expected.
Companies are attempting to attract more drivers, but there is concern as to whether or not their efforts will work.
For example, a plethora of companies have raised pay for their drivers.
“Pay in the industry’s come up considerably. Here at Werner our pay’s up 17 percent over the last couple of years,” Leathers said.
“First-year entrants into the industry now make around $50,000 a year depending on what part of the business they go in. So it’s a good job. It pays well; you can build a family around it. It’s about getting that awareness out there.”
While doubts may exist that adjustment in wages will solve the problem, sending in the central planners is never a good solution.
While the reason this problem has become so acute remains elusive, in one sense that reason is irrelevant. The market will force the adjustments needed to bring the supply and demand for truckers back into balance.
This adjustment will likely manifest itself in higher wages for truckers. But it can also encourage alternative methods of shipping such as rail. It could also be that some industries will choose to locate plants in more locations, thus reducing transportation needs.
The only worry is that government planners will involve themselves creating distortions. Just leave matters alone. The free market is quite capable of fixing this problem itself.
From: The Western Journal