These changes caused the high levels of turnover and low pay that have characterized the industry for more than three decades now
In the late '70s, most truckers had sizable paychecks, reasonable hours, and even political clout.
I met Claudio at a Midwestern truck stop just before the Great Recession. At the time, I was a sociology grad student trying to understand how long-haul trucking had gone from one of the best blue-collar jobs in the U.S. to an industry one economist said consisted of "sweatshops on wheels." And at the time, Claudio was puzzling over the number on the paycheck he had just received for the 80 hours he had worked over the course of seven days: $41.58.
The reason Claudio was angry and frustrated was that in his previous trucking job, he had made about $800 a week, and a recruiter from the new company he was working with—one of the largest and most profitable trucking firms—had promised twice that, for driving the same number of miles. But what changed when Claudio, whose last name has been omitted because that is the standard practice in the field of sociology, switched companies was his employment status: He had gone from an employee to an independent contractor.
In many ways, this brought him the obligations of formal employment and few of the perks. One of the things that had drawn him to this new job was the promise of more control over when and where he drove. Now, Claudio was responsible for nearly all of the costs associated with driving his truck, which he was leasing from a subsidiary of his new company. Under his lease agreement, he wasn't allowed to work for any other companies, and the company decided all of the loads he was to haul. Yet at the same time, the company paid Claudio as if he were self-employed, meaning it didn't make contributions on his behalf to Social Security, Medicare, worker's compensation, or unemployment insurance.
Claudio's lease agreement goes a long way in explaining that $41.58 paycheck. And as bad as 50 cents an hour was, it had once been worse: A few weeks earlier, he had worked five full days and after the company deducted all of his expenses—lease payments for the truck, insurance, fuel costs, and so on—he ended up owing the company $100.
This is the experience of many truckers. They are convinced to work as independent contractors by trucking carriers trying to rid themselves of the financial responsibilities of employers and shift the risk of owning and operating trucks to workers. In the course of 10 years of research on the trucking industry, I met many drivers who had tried their hand at contracting and been wiped out by it, financially and personally. Yet, I continually met new drivers eager to give it a shot. One driver I met was convinced that he could become a millionaire if he bought a truck from his company and kept racking up miles at the same incredible pace as he had during his first nine months on the job.
But the fact is, a typical truck driver won't become a millionaire—far from it. There are more than 1.6 million tractor-trailer drivers in the U.S. About 800,000, like Claudio, work in long-haul trucking, which is the industry's largest and most important segment. Those drivers, who tend to be the least experienced, are driving more miles than drivers used to in the past, and earning far less. Forty years ago, truckers formed one of the best paid and most politically powerful parts of the U.S. working class. Today, according to the Department of Labor, the average trucker makes about $40,000. In 1980, according to one industry analyst, the average trucker was, after adjusting for inflation, making the equivalent of more than $110,000 today.
One of the things that's changed in the trucking industry since the '70s—in addition to the decline of unions—is the rise of independent contracting. If they become independent contractors, truckers such as Claudio end up working harder and earning far less than they would otherwise. It is difficult to say exactly how much less, but it's an arrangement that's become the norm for experienced workers driving the "dry vans" and "reefers" that populate American highways and can haul just about anything that can be put in a box or on a pallet.
How did the industry get this way? Things began to change radically when Jimmy Carter started to deregulate the industry in the late 1970s. Under regulation, competition was limited and common rates were set, and all but agricultural products required federal authority to haul. Deregulation, then, created intense competition and plummeting rates for truckers. By the early '80s, the industry was in turmoil, with employers slashing wages and busting the Teamsters union to cut costs. At the same time, bigger and more sophisticated shippers were demanding that freight move farther and faster, further degrading trucking jobs.
These changes caused the high levels of turnover and low pay that have characterized the industry for more than three decades now. The industry's solution has been to settle on a system that shifts risks and costs to more-experienced workers and delays their exit to better paying segments of the industry, or from the industry all together.
Contracting, then, is presented to drivers with the promise of fantastic salaries and greater control, but it often falls short, and working as a driver is harder than those outside the industry likely appreciate. That's something I learned firsthand. Before I interviewed truckers as a researcher, I took a job as a long-haul trucker so I would understand a little about what the job was like.
Trucks are, for lack of a better word, cool. I played with them as a kid and still remember one particular black Freightliner with a square nose and external air cleaner—a big, shiny cylinder that sticks out from the side of some old models. That one was made by Matchbox and was, with its box trailer, somewhere around four inches long.
The real things are 70 feet long and can weigh up to 80,000 pounds, and they can and should be terrifying to the untrained. I got my training through a company-operated Commercial Driver Licensing school that charged me $3,500. (Nearly all workers who enter the industry start at such a school, or in a private or public community-college program.) When I first got behind the wheel, everything was different than I had imagined. The steering wheel is 20 inches in diameter, requiring wide-sweeping, hand-over-hand motions to turn it. The end of the trailer is so far away that it feels like it's on time delay—when reversing slowly, the effect of a quarter turn of the wheel isn't registered by the tail for about five seconds. As for stopping the rig at high speeds, the theoretical limits they talk about in training programs are something any driver would be happy not to witness in practice.
All this makes for very physical labor. This is a vehicle that has to be climbed up into. And then the work is remarkably tangible: Drivers pick up 40,000 lbs of something people have over here and drive it to where people need it over there. They are working when the sun comes up and when it goes down, having covered hundreds of miles in the meantime. There are no bosses, and no office politics—it's like being a modern-day cowboy. And what a view from the office window.
Long-haul truckers doing the work I did are the least experienced truckers—the sort that only the biggest companies can afford to train and insure. New drivers make about $35,000 a year. (Somewhat more experienced drivers working for the large-truckload dry-van companies hauling everything from beer to diapers to Xboxes might make about $45,000 a year.)
So, truck driving has its appeal—for a few months anyway. The money is better than many workers can earn in service jobs, but in most cases that's only because they are working the equivalent of two full-time jobs. There are laws that are supposed to limit how much drivers work, and they record their hours on paper or in an electronic log. The rules are complicated, but limit drivers' working hours to roughly 60 hours per week. But those laws aren't effective, partly because 90 percent of the typical driver's compensation is based on the number of miles they drive, so they only count the hours they absolutely have to. While the number of hours they spend driving on public roads is counted relatively accurately, many, many of the hours drivers work are spent waiting while their trucks are loaded and unloaded, and doing all kinds of unpaid, non-driving work that ranges from filling out paperwork to fueling their truck. Considering all the unpaid work drivers are putting in, they tend to earn little more than minimum wage. Over the four months I spent on the road, I averaged less than $10 per hour worked.
Of course, millions of workers across the U.S. work very long hours for low wages in order to earn enough to survive. But for truckers, those long hours come with an additional burden: incredible amounts of time away from home. When I drove, I typically went out on the road for either 12 or 19 days at a time. All that time, drivers are living out of their trucks, rarely leaving them for any reason other than to find a meal, shower, or deal with customers. In general, they live without family, friends, or any meaningful human contact. As several experienced drivers told me about their pay, they give up their lives to do the job—how do you put a price on that?
Low pay and a lack of control over their schedules push many long-haul truckers to look for something better. And there are better trucking jobs available. Work with private carriers, such as Walmart, can pay twice as much. Drivers flock to these jobs once they are qualified for and aware of them. For that reason, keeping experienced workers from moving onto those better jobs is a top priority of large trucking companies, and this is one of the reasons they've lately favored contracting. Turning employees into contractors instead of paying experienced employees better is a clever strategy because, for a time at least, drivers end up working harder and cheaper—and sometimes even essentially for free, like Claudio did.
And making workers contractors is useful to companies for another reason: Their leases on trucks bind them to the job. When they want to quit, the company can hold tens of thousands of dollars in debt over their heads. Often, leases like Claudio's require that all payments that would have ever been made over the course of the lease term (which can be up to four years in many cases) are due upon violation of the contract. What this means in practice is that a driver like Claudio might be faced with a $65,000 bill if he wants to leave his job. In other words, most contractors will continue to work for less than they are worth because they can't afford not to.
How is it possible that Claudio and so many like him pass through the same truck stops, dock at the same warehouses, even work for the very same companies, and yet continue to enter into these dreadful arrangements? Why don't they learn from each other? At first, I thought it was just that inexperienced workers didn't have enough information. Of course, that was true: Whereas company managers could tell me to the penny what it cost them to run a mile under various scenarios, inexperienced drivers couldn't even hazard a guess.
But the real answer was far more complicated. Many companies bring workers in with a career path already in mind, taking them from trainee to employee to contractor. Workers most often don't know the plans trucking companies have for them, and, further, aren't acquainted with the concept of contracting. So when they start to get frustrated with their hours and pay, usually within a year or two of driving over-the-road, most workers seek out information about contracting.
Unfortunately, what they are most likely to encounter in their search is a web of interrelated businesses that work to convince employee truckers to become contractors. Magazines, websites, satellite radio, trade shows, trucking accountants, and business consultants can convince inexperienced drivers that leasing a truck and becoming a contractor will empower them as small-business owners. Employers are recast as business partners, income becomes profit, and lower incomes and unpaid time are framed as investments.
All of this—preventing contractors from setting their own prices and working with other companies, while saddling them with debt to keep them on the job—may or may not be legal. There have been numerous legal challenges to the classification of workers in several realms, including, yes, truckers, but also exotic dancers and drivers working for ride-hailing companies.
In a time when low-wage workers increasingly jump from industry to industry in search of better work, American laws could do a better job clarifying what exactly it means to be an independent contractor. Right now, the definitions used by a range of agencies, including the Social Security Administration, the IRS, and the Department of Labor focus on issues of behavioral control—if would-be employers can tell workers what to do in carrying out their work—and financial control—if workers can freely sell their services when and to whom they choose. In some situations, as many as 20 different "factors" will be weighed as regulators and courts decide if a worker is properly classified. These laws would be better off simplified, so that workers themselves—not just legal specialists—can understand them.