10.12.19

FEWER MONOPOLY RENTS TO DISSIPATE?

In Forbes, Michael Bernick asks, "Trucking Was Once A Middle Class Job; Can It Still Be?"  Probably not, as capital requirements are relatively low, and your tax dollars and mine provide the rights-of-way.
The movie The Irishman, along with Harvard Law Professor Jack Goldsmith’s new book on Jimmy Hoffa, is renewing interest in Hoffa, the Teamsters, and trucking. One theme of the book is that truck driving, in the decades after World War II, often served as a solid middle class job—enabling truckers to be homeowners and/or support a family on one income.
Let's leave aside the interest of (upscale?) women in participating in the labor force or the tendency of blue collar men to be OK with the wife bringing in additional money for the moment, as well as the rent-seeking implicit in the Teamsters' Central States Pension Fund. Let's think about the way the Progressive State fostered those rents.
Among the most complete research on the trucking workforce across the United States has been that undertaken by University of Pennsylvania faculty member, Steve Viscelli. In the winter of 2005, Viscelli left his life as a graduate student in sociology to take a job as a long haul driver. He spent two months learning to driver a tractor-trailer, followed by months driving tens of thousands of miles across the eastern half of the United States. Over the next nine years, he interviewed other truck drivers and truck company owners, and in 2016 published the results of his research: The Big Rig: Trucking and the Decline of the American Dream.

In a number of ways, the book is a model of labor market analysis. Viscelli combines his experiences and interviews, with careful historical research on the trucking workforce, understanding of the numbers on driver longevity and wages, and ten years of thinking about the topic.
It's possible that the unionized fleets benefitted from the Victory Dividend, that surely included those Interstate Highways that at first looked like a boon for gear-jammers (and surely the freight railroads saw it that way), and that events such as the 1970s oil embargo and the misplaced 55 mph speed limits, contributed.
In Viscelli’s telling, from the post World War II period through the late 1970s, truckers were “the best-paid and most powerful segment of the US working class.” Truck driver could be a path to home ownership, and a middle class lifestyle.

This changed in the late 1970s due to two interconnected dynamics, the deregulation of the industry, and the decline of the trucking unions. Though deregulation is usually associated with President Reagan, it was developed and passed by the Carter Administration and backed by Democratic legislators. A series of administrative and legislative actions culminating in the 1980 Motor Carrier Act, led to the government cutting back on oversight and eliminating of price controls and restrictions on market entrants.
So it always is with cartels: when a trucker licensed to move goods between Boston and Albany merges with another carrier licensed to move goods between Boston and New York gets into trouble for hauling good directly between New York and Albany (this really happened, kiddies, the company had no authority to use the New York Thruway) something has to give. And the cartel rents included those lucrative pension funds.
As Viscelli sets out, deregulation did lead to heightened cost competition, new firms entering the field, and innovation. But it also set in motion a decrease in the quality of jobs for truckers. Wages and working conditions declined. Experienced truckers left the field and worker turnover rates grew. Employers developed a model of drivers as independent contractors, shifting risks and costs to the drivers—Viscelli interviews trucker independent contractors today who are barely making minimum wage and/or in debt in their attempts to be owners.
There are opportunities for both practical and scholarly research here: apparently being an owner-operator or a subcontractor doesn't work, but being an employee of a fleet operator doesn't work.
Viscelli has continued his research and writing in the trucking field, often as an advocate for improved wages and working conditions for truckers. Viscelli’s advocacy includes several elements, but at the center is a greater trucker voice in how the industry is structured. “We would all be better off if truckers had greater control over how they work and what they earn”, Viscelli has written, adding that the form of the worker voice, including unionization, “is a question truckers will have to decide and act on themselves.”
These are probably generally favorable times for such models to emerge, as the railroads continue to be bent on getting out of retail freight transportation.

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