8 ms·

Our economy has split into areas where in some areas "talent" can get almost infinite amounts of money and in other areas it's simply not conceivable to pay peo

Our economy has split into areas where in some areas "talent" can get almost infinite amounts of money and in other areas it's simply not conceivable to pay people more. I wonder how free market people explain this. Based on the market theories I have heard it doesn't make sense.

yasp 8y ago
I don't know much about the trucking industry but I imagine that it is competitive enough where employers don't feel like they have much latitude to pass higher wages along to their customers.
- lotsofpulp 8y ago
  The only reasons that would be is if other trucking companies are not having driver shortages and can continue to deliver without raising prices, or the the end users of the items they are delivering are not willing to pay for the increase in cost. I doubt both are true.
lotsofpulp 8y ago
It does make sense, you don’t need “infinite” amount of money. Pay a driver $200k a year. Or give them an 8 hour workday, and week off week on schedules so they can see their family. There’s many solutions, all of them involve incentivizing people to become drivers. If people want their Amazon orders so bad, they’ll end up paying. And if they don’t, then they have to re-prioritize what they want.
- StudentStuff 8y ago
  Part of the problem is with BNSF, UP & the other major long haul rail lines, there is no good aggregator for those looking to ship a few pallets of goods from California to Seattle, and the railroad is happy to set high minimums which make long distance trucking viable. Its ultimately quite silly, I really do think an Uber for Railroad shipping which partnered with the local railroads (that are desperate for revenue & work for cheap) and long haul railroads could effectively shrink the need for long haul trucking.
  - HarryHirsch 8y ago
    Uber for railroad shipping? LCL (Less-than-container-load) freight forwarding has been an industry since God-knows-when, and you'd think this includes intermodal. You learn all this when you've done a few international moves.
    - deleted 8y ago
      [deleted]
    - shiftpgdn 8y ago
      If you've done an international move surely you saw how horribly the industry is run. It's ripe for "disruption." Most of the pages of companies doing the work look straight out of 2004.
      - HarryHirsch 8y ago
        To be honest, I can't complain about the state of the industry. You find someone (through recommendations), they give you a quote, you drop off the goods, and the stuff arrives 6 weeks later. It's miraculous, there must be so much informal knowledge to make it all work. The disruption is these "moving pods". They are more expensive, but they are well advertised, and one fears that the established small players will be driven out of business.
      - toasterlovin 8y ago
        There is a YC company doing this: Flexport.
        HarryHirsch 8y ago
        Their website is full of fluff, and you have to sign up for an account. With your average freight forwarder you just pick up the phone for a quote, and if the quote is outside their area of expertise they'll refer you to someone who can perform. What is their niche, exactly?
        8y ago
- maxxxxx 8y ago
  So why is this not happening in trucking or other areas? Whenever salaries go up in an area it's being reported almost like a miracle.
- chrisseaton 8y ago
  I wouldn't re-train as a truck driver for $200k a year? Would you? And you can't just say 'there's lots of people for whom $200k would be a lot of money' because there's a lot of people who whom $50k is a lot of money and those jobs aren't filled either. Short of literally offering a million dollars a year, it's got to be more complicated than how much you offer.
  - bryanrasmussen 8y ago
    well I wouldn't but I make pretty good money already. but really the main reason I wouldn't retrain as a truck driver is if I retrain for something it's a job I envision lasting another decade at least.
  - vkou 8y ago
    I wouldn't re-train as a truck driver, but my partner, who makes $35,000/year moving heavy things around in a Seattle theater would. She'd step over a lot of bodies to do so. The $50,000/year jobs that aren't being filled have one of: 1. Require years of non-transferable training. 2. Have insane working hours, that make your real pay closer to minimum wage. 3. In especially shitty working conditions. 4. Are in locations where $50,000/year isn't enough to live on. 5. Destroy your body after a few years on the job. 6. Have better-paying, better-work-condition alternatives that use similar skill-sets. 7. Or, more typically, two or more of the above.
    - cimmanom 8y ago
      Truck driving ticks boxes 2, 5, and arguably 3. That said, if it paid $200k/yr (median or even 75th percentile), the shortage would disappear post haste. The vast majorly of other jobs that pay that much tick boxes 1, 4, or both and are thus logistically out of reach of at least half the population.
  - rgbrenner 8y ago
    If $1m/year is the price, then that's the price. If there are alternatives available that use less or cheaper labor, then people will use those instead. There's no cap for any price. And if the alternatives are cheaper, then maybe that type of business doesn't need to exist in the economy. That's supply and demand.
- ryanmarsh 8y ago
  In 1935 Congress passed the Motor Carrier Act of 1935. With it the ICC restricted new entry into the trucking business and approved specific routes. It also required motor carriers to file tariffs with the ICC 30 days in advance, and allowed protest from other common carriers of proposed tariffs, and required that carriers’ rates be reasonable “as to both minimum and maximum.” The underlying rationale of the 1935 Act was that the motor carrier sector was economically unstable and that cut-throat competition might destroy the fledgling industry. Driving a truck paid well and the carriers got fat. After a series of deregulation acts beginning in the 70’s there was a race to the bottom on prices. Many carriers went out of business. Driver pay dropped (all though you could still make a good living doing certain types of OTR. Swings in the economy are felt in transportation. Until the trucks drive themselves there will forever be too many/few drivers. It’s the nature of a deregulated industry that moves with the economy. Every swing in a labor market is not a social crisis. Although we can all probably foresee some real social crises’ related to driver labor in the future and not of the “too little” kind.
dkasper 8y ago
As you pay truckers more at some point it doesn’t make economic sense to hire them. Some jobs are cost centers others are profit centers is one way of looking at it. Another factor is industries like trucking have very little differentiation so it’s a race to the bottom.
- lev99 8y ago
  As you increase driver pay delivery costs increase. If the shortage was real it would mean deliveries are not being made that would have happened at an increase in delivery cost.
- gaius 8y ago
  The goods being in location A rather than location B is the value add. Logistics is a profit centre, not a cost.
  - mi100hael 8y ago
    Of course the actual act of shipping the goods is a profit center. But payroll is a cost center in every industry I'm aware of. You can't just 10x your shipping costs in order to pay your truckers 10x the salary and expect to remain in business.
    - gaius 8y ago
      The payroll costs are usually included in each “centre”
    - ryguytilidie 8y ago
      Why does debate always turn into this? No one suggested much more than a ~1.5xish pay increase yet the response is "you expect them to pay 10x the salary and remain in business??"? What is the goal of just exaggerating and debating a thing no one says versus just debating what people are actually saying?
maxerickson 8y ago
Prices are sticky. Prices at the store, prices for shipping, prices for labor, etc. So where people don't have much leverage (or are perceived to not have much leverage), they move slowly. Trucking is low leverage (the training is a couple months and a large proportion of people will be able to obtain a CDL). Around here they've moved to offer paid training, which wasn't the case a year or two ago.
merpnderp 8y ago
The US and most of the world's free market countries are actually highly regulated markets where supply and demand are strongly influenced by government influence. As for this particular case, truck driving is a crappy job, with its long term prospects darkened by self driving technology, and equal paying professional jobs in decent supply. If you're motivated enough to be a professional, you can usually find a better career. And there's a fairly hard cap on how much long haul trucker drivers can be paid before rail becomes more economic.
deleted 8y ago
[deleted]
Karishma1234 8y ago
Free market people understand these things pretty easily. I do not see why you are finding it hard. One obvious fallacy in your statement is that someone getting paid infinite money for talent. I have not seen any such examples so far beside Pentagon who get paid more and more irrespective of their incompetence.
- maxxxxx 8y ago
  For example CEO salaries have been increasing rapidly for several decades. Are they so much better now than 40 or more years ago?
  - 5DFractalTetris 8y ago
    Their business intelligence practice has gotten so much faster that they're probably planning 100 years out.
    - Applejinx 8y ago
      To people following the way market whims have affected corporate planning, this is an extremely humorous hypothesis. No, I don't think that they are.
      - 5DFractalTetris 8y ago
        Interesting. I notice I have been downvoted as well. Thanks for the slap on the back, everybody.
        Applejinx 8y ago
        That part wasn't me, and I'm not in the least mad :) It's just that the subject is extremely important, though it's seemingly not related to 'truck driver shortage'. Part of the problem with seeking to first justify the way our economics are structured, and then explain the outcomes, is that it ignores externalities that can be important. You could take the opposite tack and begin from 'wealthy people are inherently evil' and probably be almost as wrong, but then you'd be arguing a deeply anarchic position where leadership is only dominance and subjugation. That ignores things like Elon Musk's elaborate, sci-fi goals which are clearly that of a nerd writ large, and not simply a pointy-hair CEO guy wanting only wealth. The truth is a lot simpler: value is what you're able to make happen, but compensation is sheer social engineering. CEO pay has absolutely nothing to do with whether they're more useful as a class than truck drivers. I think some of them are more useful than truck drivers, and some are not.
deleted 8y ago
[deleted]
Applejinx 8y ago
The people getting almost infinite amounts of money are making the rules and setting the terms of the dialogue. Because to do so is a tactic for maximizing the amount of money they get, that being their self interest. When you see this sort of 'workers are fussy and childish even though they're treated and paid incredibly well!' business, it's safe to read it as 'reality has come knocking, and the reports of wonderful conditions and pay are greatly exaggerated'. It's like asking what's wrong with millenials that they're not buying enough diamonds.

yasp 8y ago

I don't know much about the trucking industry but I imagine that it is competitive enough where employers don't feel like they have much latitude to pass higher wages along to their customers.

lotsofpulp 8y ago
The only reasons that would be is if other trucking companies are not having driver shortages and can continue to deliver without raising prices, or the the end users of the items they are delivering are not willing to pay for the increase in cost. I doubt both are true.

lotsofpulp 8y ago

It does make sense, you don’t need “infinite” amount of money. Pay a driver $200k a year. Or give them an 8 hour workday, and week off week on schedules so they can see their family. There’s many solutions, all of them involve incentivizing people to become drivers. If people want their Amazon orders so bad, they’ll end up paying. And if they don’t, then they have to re-prioritize what they want.

StudentStuff 8y ago
Part of the problem is with BNSF, UP & the other major long haul rail lines, there is no good aggregator for those looking to ship a few pallets of goods from California to Seattle, and the railroad is happy to set high minimums which make long distance trucking viable. Its ultimately quite silly, I really do think an Uber for Railroad shipping which partnered with the local railroads (that are desperate for revenue & work for cheap) and long haul railroads could effectively shrink the need for long haul trucking.
- HarryHirsch 8y ago
  Uber for railroad shipping? LCL (Less-than-container-load) freight forwarding has been an industry since God-knows-when, and you'd think this includes intermodal. You learn all this when you've done a few international moves.
  - deleted 8y ago
    [deleted]
  - shiftpgdn 8y ago
    If you've done an international move surely you saw how horribly the industry is run. It's ripe for "disruption." Most of the pages of companies doing the work look straight out of 2004.
    - HarryHirsch 8y ago
      To be honest, I can't complain about the state of the industry. You find someone (through recommendations), they give you a quote, you drop off the goods, and the stuff arrives 6 weeks later. It's miraculous, there must be so much informal knowledge to make it all work. The disruption is these "moving pods". They are more expensive, but they are well advertised, and one fears that the established small players will be driven out of business.
    - toasterlovin 8y ago
      There is a YC company doing this: Flexport.
      - HarryHirsch 8y ago
        Their website is full of fluff, and you have to sign up for an account. With your average freight forwarder you just pick up the phone for a quote, and if the quote is outside their area of expertise they'll refer you to someone who can perform. What is their niche, exactly?
        8y ago
maxxxxx 8y ago
So why is this not happening in trucking or other areas? Whenever salaries go up in an area it's being reported almost like a miracle.
chrisseaton 8y ago
I wouldn't re-train as a truck driver for $200k a year? Would you? And you can't just say 'there's lots of people for whom $200k would be a lot of money' because there's a lot of people who whom $50k is a lot of money and those jobs aren't filled either. Short of literally offering a million dollars a year, it's got to be more complicated than how much you offer.
- bryanrasmussen 8y ago
  well I wouldn't but I make pretty good money already. but really the main reason I wouldn't retrain as a truck driver is if I retrain for something it's a job I envision lasting another decade at least.
- vkou 8y ago
  I wouldn't re-train as a truck driver, but my partner, who makes $35,000/year moving heavy things around in a Seattle theater would. She'd step over a lot of bodies to do so. The $50,000/year jobs that aren't being filled have one of: 1. Require years of non-transferable training. 2. Have insane working hours, that make your real pay closer to minimum wage. 3. In especially shitty working conditions. 4. Are in locations where $50,000/year isn't enough to live on. 5. Destroy your body after a few years on the job. 6. Have better-paying, better-work-condition alternatives that use similar skill-sets. 7. Or, more typically, two or more of the above.
  - cimmanom 8y ago
    Truck driving ticks boxes 2, 5, and arguably 3. That said, if it paid $200k/yr (median or even 75th percentile), the shortage would disappear post haste. The vast majorly of other jobs that pay that much tick boxes 1, 4, or both and are thus logistically out of reach of at least half the population.
- rgbrenner 8y ago
  If $1m/year is the price, then that's the price. If there are alternatives available that use less or cheaper labor, then people will use those instead. There's no cap for any price. And if the alternatives are cheaper, then maybe that type of business doesn't need to exist in the economy. That's supply and demand.
ryanmarsh 8y ago
In 1935 Congress passed the Motor Carrier Act of 1935. With it the ICC restricted new entry into the trucking business and approved specific routes. It also required motor carriers to file tariffs with the ICC 30 days in advance, and allowed protest from other common carriers of proposed tariffs, and required that carriers’ rates be reasonable “as to both minimum and maximum.” The underlying rationale of the 1935 Act was that the motor carrier sector was economically unstable and that cut-throat competition might destroy the fledgling industry. Driving a truck paid well and the carriers got fat. After a series of deregulation acts beginning in the 70’s there was a race to the bottom on prices. Many carriers went out of business. Driver pay dropped (all though you could still make a good living doing certain types of OTR. Swings in the economy are felt in transportation. Until the trucks drive themselves there will forever be too many/few drivers. It’s the nature of a deregulated industry that moves with the economy. Every swing in a labor market is not a social crisis. Although we can all probably foresee some real social crises’ related to driver labor in the future and not of the “too little” kind.

dkasper 8y ago

As you pay truckers more at some point it doesn’t make economic sense to hire them. Some jobs are cost centers others are profit centers is one way of looking at it. Another factor is industries like trucking have very little differentiation so it’s a race to the bottom.

lev99 8y ago
As you increase driver pay delivery costs increase. If the shortage was real it would mean deliveries are not being made that would have happened at an increase in delivery cost.
gaius 8y ago
The goods being in location A rather than location B is the value add. Logistics is a profit centre, not a cost.
- mi100hael 8y ago
  Of course the actual act of shipping the goods is a profit center. But payroll is a cost center in every industry I'm aware of. You can't just 10x your shipping costs in order to pay your truckers 10x the salary and expect to remain in business.
  - gaius 8y ago
    The payroll costs are usually included in each “centre”
  - ryguytilidie 8y ago
    Why does debate always turn into this? No one suggested much more than a ~1.5xish pay increase yet the response is "you expect them to pay 10x the salary and remain in business??"? What is the goal of just exaggerating and debating a thing no one says versus just debating what people are actually saying?

maxerickson 8y ago

Prices are sticky. Prices at the store, prices for shipping, prices for labor, etc. So where people don't have much leverage (or are perceived to not have much leverage), they move slowly. Trucking is low leverage (the training is a couple months and a large proportion of people will be able to obtain a CDL). Around here they've moved to offer paid training, which wasn't the case a year or two ago.

merpnderp 8y ago

The US and most of the world's free market countries are actually highly regulated markets where supply and demand are strongly influenced by government influence. As for this particular case, truck driving is a crappy job, with its long term prospects darkened by self driving technology, and equal paying professional jobs in decent supply. If you're motivated enough to be a professional, you can usually find a better career. And there's a fairly hard cap on how much long haul trucker drivers can be paid before rail becomes more economic.

deleted 8y ago

[deleted]

Karishma1234 8y ago

Free market people understand these things pretty easily. I do not see why you are finding it hard. One obvious fallacy in your statement is that someone getting paid infinite money for talent. I have not seen any such examples so far beside Pentagon who get paid more and more irrespective of their incompetence.

maxxxxx 8y ago
For example CEO salaries have been increasing rapidly for several decades. Are they so much better now than 40 or more years ago?
- 5DFractalTetris 8y ago
  Their business intelligence practice has gotten so much faster that they're probably planning 100 years out.
  - Applejinx 8y ago
    To people following the way market whims have affected corporate planning, this is an extremely humorous hypothesis. No, I don't think that they are.
    - 5DFractalTetris 8y ago
      Interesting. I notice I have been downvoted as well. Thanks for the slap on the back, everybody.
      - Applejinx 8y ago
        That part wasn't me, and I'm not in the least mad :) It's just that the subject is extremely important, though it's seemingly not related to 'truck driver shortage'. Part of the problem with seeking to first justify the way our economics are structured, and then explain the outcomes, is that it ignores externalities that can be important. You could take the opposite tack and begin from 'wealthy people are inherently evil' and probably be almost as wrong, but then you'd be arguing a deeply anarchic position where leadership is only dominance and subjugation. That ignores things like Elon Musk's elaborate, sci-fi goals which are clearly that of a nerd writ large, and not simply a pointy-hair CEO guy wanting only wealth. The truth is a lot simpler: value is what you're able to make happen, but compensation is sheer social engineering. CEO pay has absolutely nothing to do with whether they're more useful as a class than truck drivers. I think some of them are more useful than truck drivers, and some are not.

deleted 8y ago

[deleted]

Applejinx 8y ago

The people getting almost infinite amounts of money are making the rules and setting the terms of the dialogue. Because to do so is a tactic for maximizing the amount of money they get, that being their self interest. When you see this sort of 'workers are fussy and childish even though they're treated and paid incredibly well!' business, it's safe to read it as 'reality has come knocking, and the reports of wonderful conditions and pay are greatly exaggerated'. It's like asking what's wrong with millenials that they're not buying enough diamonds.