Why truck drivers are not unionized (a very abridged version)
Hiya!
When a reporter gets really into a beat, we ignore interesting stories because we believe those are things “everyone knows.” Maybe we think that way because we are conscious of how little we actually know about a subject compared to, say, the executives or analysts or professors we interview.
So, based off of reader feedback, I thought I’d shift this newsletter into unraveling the things I think you know but probably don’t. Let’s start with one of the big questions I get: Why don’t truck drivers get their (seemingly many) labor issues sorted out in their union? Aren’t they all unionized?
They are not! But they used to be.
Until 1980, trucking was one of the most-regulated industries around. You had to actually buy a route from the Interstate Commerce Commission, a federal body, and submit what your rates would be to the ICC. Your competitors could see your rates and then dispute them with the agency. (Imagine being able to tell the federal government that you think your coworker makes too much.)
Not all routes or goods were regulated, though, and the non-regulated routes made the end price of the good way cheaper for consumers. For instance, per the Hoover Institution, truck rates for "cooked poultry" were 50% higher than rates for "fresh dressed poultry." Ultimately non-regulated products were as much as 20%-30% cheaper.
Following that, President Jimmy Carter passed a law in 1980 that would deregulate the industry, a move supported by liberals and conservatives alike as deregulation fever took over the country. Carter estimated that deregulation would save consumers as much as $8 billion ($25 billion in 2018 dollars) each year.
And it did!
But it also encouraged what UPenn sociologist and former truck driver (and, one of the first people I interviewed about trucking) Steve Viscelli calls “destructive competition.”
It’s pretty easy to start a trucking company — you just need a commercial drivers license and a lease for a semi-truck. That’s why there are literally 206,746 trucking companies in the United States. (Comparison: The US has fewer than 100 airlines.)
Most of those companies are very small. A whopping 11% of trucking companies have more than six trucks.
If you sort of paid attention in AP Microeconomics (I myself enviably scored a 3 on the test), this may remind you of "perfect competition." There are so many suppliers (the 206,000-plus trucking companies) and so many buyers (literally every retailer and manufacturer) that the price of a good will be out of everyone’s control and, ultimately, quite low.
This is great news for consumers (i.e., you and me) and retailers and manufacturers. This is very bad news if you are a truck driver or own a trucking company. Because the barrier of entry in trucking is so low and because the service itself is a commodity, the industry has ultra-low margins.
Now, let’s connect this back to unionization.
Because of those ultra-low margins, corporate execs will argue there’s no way to maintain a trucking company and a unionized workforce. After deregulation in 1980, most of the large trucking companies that were around went bankrupt. The new companies that came up in their place were non-union.
Notably, there wasn't a push to de-unionize. It just happened over the course of several decades. By the mid-2000s, essentially every trucking giant with a unionized workforce had gone bankrupt, and the companies who replaced them were non-union.
I have this data and also this entire newsletter, basically, spelled out and further explored in this very long article that I wrote in 2018.
Truck drivers nowadays that I chat with want to be able to organize and tell the government/their employers what they think. Some of them have, with organizations like Black Smoke Matters.
But, few organizers or members say that they’re in a union or want to be in one. Example would be Rick Blatter, who is the spokesperson for the Canadian Truckers Association. "I am not a union man myself," Blatter told me last year. "I am pro-choice. Those who want to unionize should have this right. I personally do not want to be unionized."
Blatter was confident truckers might someday band together, namely through a professional association rather than a “union.” The reasons for many truck drivers' rejection of unions, even though it would ostensibly benefit them greatly, are something that can be explored by someone with more sociological training that I possess.
That's all I got for you today. I might start sending this over the weekend instead of on Friday evenings? I don't know, let me know what you think. (I have to note my email is a dumpster fire right now because I wrote this article, so please be patient if I do not reply.)
Hope you and yours are safe. Farewell and see you next week!
Tah-tah,
Rachel
Some other news, from me and not me:
1. Freight brokerage TQL laid off up to 700 HQ workers in three days. Thanks to noncompetes, many of them fear they will be out of work for at least a year. (FreightWaves)
2. Terrified truckers have no idea how they'll get home if they catch COVID-19 on the road — and major trucking companies don't either (Business Insider)
3. Leaked memo: Amazon is now recommending the workers sorting and moving your online orders wear face masks, but will have only 'limited' quantities (Business Insider)