The American labor market today is about as good as it gets. Unemployment is at record lows a decade into the longest economic expansion in U.S. history and wages have been rising fastest for the front-line workers who largely missed out on the boom of the early 2000s. However, trucking is an exception, especially after the soft freight market of the past year and a half.
Low rates and rising costs contributed to a tough environment for many carriers in 2019, and the strain on the industry is painfully visible. According to the outplacement firm Challenge, Grey & Christmas, layoffs in the transportation sector rose 35 percent in 2019 compared to the prior year. Bankruptcies accounted for nearly one-in-nine layoffs nationwide, the highest share since record keeping began in 2005.
That being said, the freight market is notoriously cyclical: Convoy’ analysis of market trends over the past four decades suggest that, on average, the freight industry moves from boom to bust and back every three-and-a-half to four years. Memories are still fresh of truckers flocking to the oil fields during the fracking boom of the early 2010s, and the string of recent bankruptcies has prompted some fears that drivers simply won’t be there when freight demand does eventually rebound.
But a deep dive on the data suggests these fears are likely misplaced. We used Census data to look at individuals who worked as a trucker at any point over the past two decades, as well as what they were doing a year later: Were they still working as a trucker, were they still working but in a different type of job, were they unemployed, or did they exit the workforce altogether?
The results show that the odds that a trucker will leave their job and change careers are roughly in line with national averages, and do not meaningfully rise during soft freight markets. We also found that the odds that a trucker will change careers appears to have more to do with the pull of booms elsewhere in the labor market than the push from busts in the freight industry.
Looking back over the past decade, for every 100 individuals working as a truck driver in a given month, on average one year later:
The share of truck drivers who leave trucking for a new line of work (among those who remain employed) is about average compared to other occupations. It is roughly on par with elementary and secondary school teachers and police officers, higher than jobs in construction and sales, and lower than among doctors, lawyers, and postal service workers.
After accounting for the changing demographics of truckers — factors like age and marital status — the odds that a trucker will change careers has increased over the past two decades, but the increase appears to have occurred entirely during two periods: During the construction boom of the mid-2000s and during the oil fracking boom of the early-2010s. Since 2015, it has been roughly flat.
By contrast, over the past half-decade, the odds that a trucker will exit the labor force entirely has trended higher after falling for much of the previous 10 years. The analysis controls for age, so this is not the result of more and more truckers retiring. Instead, it is the result of more truckers exiting the labor force because they are no longer able to work — the category that captures individuals who exit the labor force due to a health issue or disability but do not necessarily retire. The typical age of truckers who exit the labor force because they are unable to work is 46; among those who retire, it is 67.
The odds that a trucker will become unemployed closely tracks the overall American economy, surging in 2001 and again from 2007 to 2009. Since the current economic expansion began in July 2009, it has declined sharply.
When truckers decide to try their hand at a new field, they are increasingly drawn to other jobs in the transportation sector — such as warehouse workers or logistics managers — or to office jobs.
Indeed, jobs in management, sales and office support appear to have a growing allure for truckers who are looking to change careers. Yet, unlike the early 2000s or even the early 2010s, there is not necessarily a demand boom for office workers on the horizon. Job growth in these industries has plodded slowly and steadily upward, but there is unlikely to be a sudden surge of new demand (and sharply higher wages) that would draw large numbers of ex-truckers.
The reality, supported by evidence from other industries, is that there is a certain stickiness to jobs that require special training or licenses: More often than not, truck drivers do not just follow the fickle winds of the ever-changing labor market, moving on to another occupation when the trucking industry goes through a soft patch. For many, trucking is more than just a job: It is part of who they are in good times and bad.
Editor’s note: Aaron Terrazas is director of economic research at Convoy, a digital freight network. Before joining Convoy he was an economist at Zillow and the U.S. Treasury Department.
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