"Crash and Churn" - new essay out at American Compass
Trucking wasn't really de-regulated, as such.
An essay I have been working on for some time went live earlier today at American Compass, a think tank who can best be described as Conservative Economics that is fundamentally Pro-Working Class and ‘America First’, as it were. They are hard to nail down, which is good in a society obsessed with easy categorization.
The argument I make is fairly straightforward. Building on the work of Michael Belzer in Sweatshops on Wheels : Winners and Losers in Trucking Deregulation, I draw a line between Belzer’s legitimate contention that de-regulation is a misnomer for what happened to the trucking industry; rather, a transfer of regulation took place.
Though Belzer referred to it as ‘social regulation’ my shorthand is that regulation was transferred from the C-Suite to the Drivers Seat.
And in so doing, over and above the economic pressures under the ‘C-suite’ deregulation which saw rates and thus drivers wages plummet, regulation of the Driver’s Seat has contributed greatly to the retention or ‘churn’ problem.
Ironically enough, the free marketeers who insisted that deregulation was necessary (and they were right, to a point) have failed to see how new systems of government interference in the industry have grown, and that the driver churn which certain sectors of the industry see is partially a creation of a stealth corporate welfare scam masquerading as a jobs program.
Get rid of the government at one end, usher them in at the other.
The essay also examines the effects of churn on the industry, and how this has resulted in ‘externalities’, costs born by insurance companies, government, and society at large.
Have a read, and feel free to tell me what you think; you can do that in person if you are coming to the Mid-America Trucking Show in Louisville, Kentucky, later this week. I’ll be there, drop me an email! (listed below)
https://americancompass.org/crash-and-churn/
Some snippets -
But the Motor Carrier Act of 1980 (MCA) brought sweeping changes to the American trucking industry. Pricing controls vanished, as did barriers to entry. Opening the industry to more competition caused prices for trucking to drop precipitously, which meant that wages for drivers also began to head south. Economists like President Carter’s inflation czar Alfred E. Khan both predicted and sought such outcomes.
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While it is difficult to get an exact number on the various grants and subsidies given directly to these schools, or indirectly via financing student drivers themselves, the total is at least in the hundreds of millions of dollars over the past four decades. The Workforce Innovation and Opportunity Act (WIOA) hands out so much money that many trucker recruiting websites advertise it directly to potential recruits. The same occurs with Pell Grants. The Biden administration has committed an extra $48 million to the truck driver training pot. State governments hand out a great deal of money as well.
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This real shortage—of experienced truckers—itself has substantial effects. Many niche market and specialty carriers express concerns over a seeming lack of truckers capable of hauling hazardous materials, or navigating the roads with oversize and overweight loads. The industry chews through so many people that not enough drivers stick around to attain the level of experience required for these types of trucking jobs.
For such a massive and complex issue, the original version of this essay was 8200 words, which I am told might be a bit too much for today’s narrow attention spans.
The editors at American Compass deserve a great deal of credit for narrowing it down to 4500ish and keeping the argument intact. Perhaps at some point in the not too distant future I might share the original, if anyone wanted a deeper dive into the specifics.
Expect to hear more from me at American Compass in the near future.
Questions, comments, suggestions, corrections and Hate Mail are welcomed and encouraged - gordilocks@protonmail.com
You're absolutely right. The essay linked to is indeed dead wrong. I know because I did research on so-called trucking deregulation for my book "OverRegulated".
The opponents of deregulation, who invented the "era of deregulation" lie will never stop advocating taking away ever more of our economic freedom. There was no era of deregulation; for over a century we have had a steadily increasing flood of government regulation. The 1980 repeals were a drop in the bucket; more overregulation quickly replaced the small amount of deregulation.