"A senior vice president at Walmart told Yahoo! Finance at the time it was because of a “shortage” of truck drivers. (Those who study the trucking industry dispute that such a shortage exists, concluding that drivers leave the industry for jobs with better pay and hours.)"
It turns out that good truck drivers could also be doing other useful work, and want to be well compensated and taken care of for their labor.
What does "a shortage" mean in supply and demand? I don't understand, because it seems to mean "we want to pay less but then we won't find any people". Well, in that case, there's a shortage of Ferraris, because the ones I can find are too expensive.
Technically, it means that there is some external mechanism that prevents price from rising. Typically that means government intervention. Healthcare often sees the government set a price ceiling on services to ensure that poor citizens are not priced out of receiving healthcare, so a shortage of medical doctors is quite possible. A shortage of truck drivers is unlikely.
Under colloquial usage, as it is being used here, the term is meaningless. Under that definition, everything is always in "shortage". It is simply used as an attention grabbing mechanism to express some kind of emotion towards the subject.
Surely a transient shortage is possible due to licensing requirements. You could offer ten million dollars a year, but there are only so many people with a current CDL and finite capacity exists to grant new licenses.
The cool thing is that if we really did see ten million dollar per year offers, then most people wouldn't want to use the services of truckers anymore (too expensive), so you'd still have the right number of truckers, if not too many, among those currently able to drive, without the need for more. No need to wait on anyone else getting licensed.
You have done well to highlight why a technical shortage is defined the way it is.
The licensing requirements for being a truck driver just aren't that onerous. It's way way harder to become a doctor, lawyer, hell, even hairdresser in many states.
A shortage of doctors is quite likely as many jurisdictions place price ceilings on doctor services.
In fact, where I live, it is quite illegal for a doctor to accept any amount of payment from a patient. We as a society believe that people, no matter how rich or poor, should have equal access to healthcare, so a doctor giving priority to a billionaire who can offer a handsome reward to get his common cold looked at over someone suffering something much worse is considered abhorrent. As such, we rely on a mixture of first-come, first-serve and needs-based priority instead of a price-based mechanism.
Never heard of any attempts to place similar restrictions on truckers, though. If you want to try and charge a billion dollars per mile, go nuts!
Not everything is a perfectly elastic market. In fact, nothing is. For example, if I wanted to go out and hire 250,000 US-based computer programmers tomorrow, I would not be able to even if I wanted to pay them a million dollars each, since there are only 132,740 computer programmers across the entire US. So that would constitute a shortage of computer programmers. It would take many years to create the number of educational institutions, training programs, etc necessary to have that many programmers available to hire. The same could be said for many industries on a much smaller scale—how many people are willing to relocate to driving trucks in northern Canada? Probably not as many as you'd like, even if you had an unlimited budget. How many qualified airplane pilots are there in the world? Too few—we don't have enough training programs for them and mandatory "aging out" requirements have removed a lot of the pilots we already had. A lot of new training and education programs for pilots have been started in the past year, but they're going to take 4-5 years until the supply has increased enough that we're no longer in a shortage. (And although this is a heavy topic of debate between union leaders who say that there's no shortage and airlines who say that there is, I think the amount of investment in slow and costly supply increase programs is a good sign that there's at least some amount of supply constraint/bottleneck affecting the industry. It's hard for there not to be when safety and training requirements make the supply pool so slow to respond to changes in demand).
Ah, yeah, I was just going off a simple Google. Probably ended up on the wrong BLS page. I agree it does seem low, a search for "Software Developer" turns up on this BLS page with much higher stats—1.5M developers.
Yeah, that's either out of date or only counts people that report their title as "Computer Programmer" rather than "Software Engineer" or one of the myriad of other ways to describe people who develop/maintain software.
The recent estimates are closer to 4.4 million software engineers in the U.S. (~2.75% of the working population)
> The recent estimates are closer to 4.4 million software engineers in the U.S. (~2.75% of the working population)
Heh, we are probably more than the secretaries we replaced.
I honestly believe most companies are worse off using computers at all. At some size, you'd probably want some computer system for pay slips. But I am not too sure about that ...
And if you were a big business, you'd hire lobbyists to petition the government for Ferrari subsidies and buy news articles talking about the Ferrari shortage, and tell all your friends that the only reason you don't drive a Ferrari is purely because of the shortage and has no relationship to your finances or priorities.
In economics you can’t have a shortage in a perfect market as you note. Of course most (all?) markets are imperfect so various factors can cause shortages (eg rent controls is a common example). For labor markets imperfect mobility can cause a shortage.
In common use it means that something costs more than many people are willing to pay for it. So your Ferrari example would be a valid use under this meaning.
>In common use it means that something costs more than many people are willing to pay for it.
More likely it costs far less than people are willing to pay for it. When the Colonial Piepline was shut down for ransomware, the shortage occurred because a reasonable populace correctly assessed that the local value of gasoline had just skyrocketed far beyond its steady state price, so the demand became limited only by time and social costs (e.g. you don't want to be the guy whose picture is shown filling trash bags of gasoline) plus ways to store it.
Maybe we can still call it a shortage if there's some unexpected and/or temporary reduction in supply or increase in demand. You could still buy oil during the 1970s oil crisis but it still was a shortage.
Or it can mean that there's insufficient supply to meet demand at a "reasonable" price.
In most contexts, a shortage is when there is a gap in supply due to external factors. This results in resource allocation not responsively adapting to price signals.
A commonly used example is milk, yogurt, cream and ice cream. Every year, the farmers produce milk. Some people want yogurt, some want milk, some want cream, &c. Say that one year, everyone wants yogurt for some reason. They are lining up to pay 200%, &c, for it. Then the allocation of resources adapts -- more milk is used to make yogurt. If demand for other products does not go down -- people still want just as much milk, ice cream, &c -- then their prices may go up. Over a reasonable time frame, the effect of this is that more land will be turned over to pasturage and more milk will be produced. Gradually the prices will come down. More people have more yogurt than before; more people are working on that and less on something else (whatever it was). The workers and consumers live happily ever after and resource allocation has adapted to price signals.
One important consideration in the above example is that if people want more yogurt and are willing to pay more, they must also be willing to go without something else. They only have so much money (so much of their own resources to allocate). That is why the resource allocation has to change. Now that might not be milk, per se, but it is probably something adjacent to it, like tofu. We can see how if the shift is from tofu to yogurt, the reallocation of resources might take longer -- people can't just take the milk consumers don't want and turn it into yogurt, they have to get more milk first, which means feeding more soybeans to cows and less to tofu machines -- but it still happens.
A simple example of a shortage is a situation where a virus affects a certain fruit tree, preventing it from growing (or, at least, preventing it from growing the desired fruit). Although people are willing to pay a lot for this fruit, and by extension are willing to consume less of other fruits or other foods, there is no way to turn resources over from the production of other goods to the production of this fruit. It might be that only a small number of areas are isolated enough to produce this fruit; they might all be turned over to it; but after that, there would be no elasticity in the supply of this fruit. Given what we know about the pricing, demand, ordinary cost of inputs for producing the fruit, the supply of this fruit before the virus, we must conclude that there is considerable demand which is not being met.
(Something else notable about the second example is that most of the new, elevated price of the fruit would go into some form of rent. The ground on which the fruit could be produced would be exceedingly rare and valuable, but the material inputs, labor, skill, &c needed for the fruit are the same as before; the new high price would mostly go to the ground rent or financing costs.)
If anyone wants to work on this problem with me without solving the self-driving truck / Aurora problem outright - I think the answer is something like remote operation, level 3-4 autonomy for highways, and nice comfy air conditioned driver hubs in cities so nobody has to be away from home for days at a time. Boom - all the drivers come back and get paid decent wages to drive trucks. Ideally the per-truck subscription fee for the service is an add-on to the cost of doing driver business.
Remote operation on public highways is a dead end. There is no wireless data network with the latency and reliability guarantees necessary for safety. Particularly when it comes to tunnels, canyons, and heavy precipitation. And let's not have any ridiculous claims about how in case of a network connection failure the truck can just autonomously pull over and stop; that's not going to work safely for descending I-70 in a snowstorm.
There may be some limited use cases for remote operation on specific local routes where sufficient network access points can be provisioned.
You can't do it with autonomy, and you can't do it with remote piloting, but you can do it with a mix of both. That's my assertion. Spending 20 hours looking at Nebraska / Illinois farm fields is not the use case for remote operation - and as you say, you lack the infra for that anyway. And navigating traffic or interacting with distribution center logistics is not the case for autonomous operation - it's an infra nightmare to get a autonomous vehicle to integrate with all that radio-voice-comms madness. Even OTR drivers just want to get that part of the journey over with and get back to the hotel.
Having a pod with local drivers near major hubs, for example, means the drivers take over when the trucks get close enough for it to matter. It wont' work for delivery to, say grocery stores (which can be local driving anyway), but it will work for center-to-center transport ala between Walmart hubs. It's the long haul OTR trucking that has high attrition / people shortages, because you're away from family for so long. That little bit can be somewhat autonomous, with handoff of remote operators only near hubs. Think air-traffic-control for trucks and hubs, except probably more hands on than just telling it what to do.
Even without full autonomy, truck platooning has been shown to be effective in places where they have been tested. One human driver and "autonomous" followers. These truck platoons could be the solution to long haul deliveries while individual drivers still handle the last mile delivery and city navigation.
Because there's no problem. There's not "shortage", it's not that there just aren't enough people to be drivers. There are plenty, employers just don't want to pay enough to attract them.
>We can argue over the solutions
No, we can't, because there's no solution needed to this non-problem artificially created by employers unwilling to pay enough to attract and retain employees.
Your ideas aren't needed except by the employers trying to perpetuate their false self-made "shortage", all to avoid just paying employees more.
The only actual problem is uncritically accepting the narrative of the employers as you are doing here.
> There's not "shortage", it's not that there just aren't enough people to be drivers. There are plenty, employers just don't want to pay enough to attract them.
OK, well, let's not mince definitions. For the purposes of my thought process, a shortage is defined as "Number of people we want to do a job" minus "Number of people who do that job". The semantic difference between that and what you said is so small as to be negligible to me and doesn't preclude "increase wages" as a solution. I think that's fine for you to have a preferred solution or even a different preferred definition.
No, you're just wrong. You're carrying water for the employers who want to squeeze their employees.
Again, there is no actual problem here, just an artificial one created by employers unwilling to pay their workers and crying about it. Don't buy into it.
It's not about employers in this case. If we think being a truck driver is an important job we can subsidize truck drivers federally, via taxes.
At the end of the day, society (in the form of government regulation) gets to decide what is and isn't an important job (i.e. government subsidies), and we the people can certainly put our thumb on the scale.
People collectively decided truck drivers were overpaid [relatively] in the 1970s, hence the deregulation of the trucking industry which led to a collapse in trucker's salaries. No use blaming employers here - it was decided by the government (representing the people of the U.S.)
In this case it is. The discussion is about how employers have a dream that isn't being realized. They are metaphorical 10 year old-boys drooling over the idea of owning a Ferrari, without the capability to actually buy one.
The only "problem" is that their dream is remaining a dream. Which isn't actually a problem. Dreams aren't supposed to be realized. They are meant to be just dreams. Who gives a shit if a 10 year old can't own a Ferrari? And that is what the parent is pointing out – that the '10 year-old cries' of business are meaningless. Let them dream, but it ends there.
If people of the U.S. want to give truckers more money, they are free to do so, but that is well beyond the topic at hand.
How realistic are the trucking sims? Do you actually get gas and unload? Highway stuff and regular driving sounds good but backing a trailer up to Walmart video game style sounds frightening.
Pretty good for the expensive ones. They are not video games though, and so they are not making the shortcuts games do to make them fun. I've driven a few (snow plow, excavator) and they are very hard to control - then I see someone who drives that machine professionally get on: they get a near perfect score and comment about how real it feels. Note that part of the sim is the controls: they take the cab from a real machine and replace the windshield with a screen (for version 1, often version 2 starts to take away parts, but everything you touch including the seat is the real thing).
I've long thought that to renew your drivers license you should have to spend a day every few months in a simulator to prove you can drive safely. Do you maintain a safe following distance? Can you maintain the speed limit? Do you stop for pedestrians? Do you zipper merge correctly? Here is a situation where someone else screwed up and you will crash, can you choose the best crash? Here is an icy road, can you control the car? there is a lot that modern simulators can do but few people have used them.
I agree with you on the DL renewal based on a sim.
Interestingly:
The base CDL is a one and done skill test. There are no CPEs like with other regulated industries (nurses/teachers/investment advisors) - but there is a health and fitness check.
The difficult part is actually the last mile/few miles in trucking. Open highway driving is a significantly less complicated problem than navigating down side streets then backing into a warehouse to complete a delivery.
Freight tech companies have been talking about automating every BUT the last mile/last few miles for years. Have a stable of drivers who you have on hand to take over the last hour of a delivery. Automate everything else.
I'm not referring to "sim", I'm referring to remote piloting. Real time sensor and controls feedback from a truck that is only autonomous when it makes sense to be. We can pilot drones over 100s of yards in real time without a hitch. We just need a bit more range (few kms) via, say, the internet, and you can do this fairly easily. I don't see a research problem, I see a funding problem and an aversion to autonomous trucking b/c people think it's either completely infeasible, or completely solved by Aurora. I'm not sure of either.
The use case does not include operating remotely at 70mph on freeways, esp because internet connectivity is hard over most the USA. That bit is mostly lvl 3/4, and is something that is addressed well by other companies. It's the long tail between lvl3/4 and all the scenarios that remain in which a remote driver solves the problem. Esp in logistics yards, which are chaotic, fast paced, and driven by voice communication.
That is a much easier problem than backing a truck up to a loading bay. Even landing an airplane is a lot easier if you have an ILS. Space and the air are mostly empty. A warehouse loading area is cluttered with other trucks, debris, and cargo. Although I could totally see this being done remotely with VR and a ton of cameras.
Just to add spice the convo: Backing into a loading bay is quite easy, autonomously. Once you stage the truck you can push a button and just watch it go. See: https://outrider.ai (which is where I work, and we do all the staging _also_, but I'm actually interested in "everything else" as well). There's a lot of very human-ish problems to get to that state, that I think remote operators can really help with.
Like any other "good", there is only ever a shortage of a particular employee category at a particular salary rate (obviously there may be a lag between supply and demand).
A shortage, as it pertains to other "goods", is defined as a situation where an external mechanism prevents price from rising. A common example of a shortage is where price gouging laws are in effect. When a shortage occurs, a non-price based mechanism must be used to distribute "goods" instead, such as first-come, first served, a lottery, needs-based selection, etc.
Only labour gets the special shortage definition seen here. Seemingly because shortage was originally used with respect to healthcare practitioners, where true shortages are possible with price ceilings often imposed by government in order to allow equal healthcare access to all citizens regardless of how much they can afford to spend, and then misconstrued onto other fields.
>Only labour gets the special shortage definition seen here.
Isn't this backwards? This is the colloquial plain-language use of "shortage" (though intentionally misleadingly and wrongly used by employers), you're talking about a technical economics-only definition.
Since physical limitarions exist, including time, shortages exist.
We can't simply pay more money to get a personal chef, doctor, and pilot for everyone, even if there was a magical infinite source of compensation to pay them.
> We can't simply pay more money to get a personal chef, doctor, and pilot for everyone, even if there was a magical infinite source of compensation to pay them.
Remember, money is debt – an IOU, a promise to deliver something later. It says "You do this for me now and I will give you this token (money) that you can redeem for what you want from me in the future.". 'Compensation' is just the other side of the transaction – you offering the same in kind. If there was a magical infinite source of compensation then there would necessarily be an infinite ability to provide chef, medical, etc. services.
In the real world, you only have so much to offer others, which limits how much you can receive from them. As before, transactions must be balanced. That is what it means 'to compensate'. In the real world, you have a pick what you want from the limited amount of value you can offer in kind. There is no such thing as an insatiable demand for chefs or doctors. People will stop considering those services when they become too expensive. The more expensive, the fewer people needed.
This only becomes a problem when price is prevented from rising (e.g. due to government intervention) – and that is when you can encounter a shortage.
Buy you could have all that for yourself - if you are a billionaire. Everybody cannot have that, but somebody could. Economics is about managing limited resources. I end up being my own personal chef. I share my neurosurgeon with 100,000 people (most of whom never need one). Because I can share my neurosurgeon there is no shortage.
Can we not simply say a shortage is when there's not enough of something. In this case, available drivers willing to work for the compensation they're willing to pay?
> Can we not simply say a shortage is when there's not enough of something.
More or less, but "how much is needed" is dependent on price. You need an infinite number of truck drivers if they are driving for free. And you need no truck drivers if they are driving for $100,000,000,000 per day.
In a functioning market, price will rise until you have exactly the right number of truck drivers. Remember that the dreamers not willing to pay the price are simply not in the market. You don't have a shortage of Ferraris when 10 year old boys with Ferrari posters on their walls can't have the real thing.
However, if something stops the price from rising – such the government stepping in and saying: "It is now illegal to pay truck drivers more than $30,000 per year" – then you have a disconnect. The market wants more drivers and are willing to pay more to get them, but are not allowed to pay them more. That disconnect is what the shortage defines.
Yeah, but that's not why there's a "shortage" of drivers.
There is absolutely no upper limit to driver pay and no nameless bureaucrat filling out some permissible wage table but only "what the market will bear".
From experience I can tell you the main two culprits are it's kind of a shitty job and it's kind of a shitty job that can turn into a really shitty job (or no job) really, really fast.
No serious solutions ever treat it like the quality-of-life problem that it really is -- parking is a major problem, shippers/receivers suck up large quantities of unpaid time and living in a truck/being away from home for weeks at a time is not for everyone are probably the top 3 complaints I would hear. Well, and all the crazy shit the "4-wheelers" get up to but that's usually entertaining.
> Yeah, but that's not why there's a "shortage" of drivers.
Right, because there isn't a shortage of drivers. There isn't even a lack of drivers. We have the right number of drivers – along with a whole lot of metaphorical 10 year olds with Ferrari posters who like to talk big with their friends about how they want truck drivers, but when push comes to shove, they really don't.
Walmart paying drivers above the typical trucker's wage is not new, driving for Walmart has always been a "prestige" job in trucking that paid well and that drivers wanted to drive for. The standards are high, though, and drivers are held to account so the penalties for not living up to them can be severe
It turns out that good truck drivers could also be doing other useful work, and want to be well compensated and taken care of for their labor.