Ask a trucking CEO why it’s so hard to hire drivers, and extended unemployment benefits will likely be the first thing past his lips. In interview after interview, trucking executives say the extension of federal unemployment benefits to 99 weeks has been a major obstacle to hiring or rehiring drivers and seating trucks.
The claim, almost a mantra, is that unemployment benefits are high enough in some states to encourage at least a minority of unemployed drivers to stay off payroll, collect their benefit checks and work at an off-the-books job to make ends meet.
Some executives offer firsthand experience to back their claims, but admit the evidence is purely anecdotal. “I had a former driver come into my office two months ago and say, “I want to come back to work; I’m in my 92nd week” of benefits, Steve Russell, founder and CEO of Indianapolis-based Celadon Group, told The Journal of Commerce. (That driver, however, had been fired by Celadon, not laid off for economic reasons.)
Why would a driver prefer unemployment to gainful work behind the wheel? It’s basic trucking economics, Russell said. “The average (truckload) driver makes $700 to $750 a week. If you’re going to spend $150 a week on breakfast, lunch and dinner, you’re netting $550 to $600.” In many cases, “You’re better off sitting at home on unemployment,” he said. “At 99 weeks, there’s no incentive to go back to work.”
That may say more about trucking’s pay scale than the work ethic of truck drivers. A wage of $700 a week, assuming a driver is paid for 50 weeks a year, comes out to $35,000 in annual income. And that’s before meals and other expenses.
Acknowledging the problem, another trucking CEO, said, “We’re not proud about it.”
Russell said his company’s driver pay is above average. Even so, Celadon has been busy acquiring other trucking companies to add experienced drivers to its roster.
Beyond anecdotal claims, however, it’s difficult to determine the effect extended unemployment benefits have had on trucking employment. A Kaiser Family Foundation/NPR study released in December found only 22 percent of those unemployed for a year or more were currently receiving unemployment benefits.
In any case, the argument will be put to the test soon as those federal benefits dry up. When Congress passed the latest benefits extension in February, it included restrictions that already are cutting off funds to many states where the three-month average unemployment rate has dropped below its 2009 level. Those CEOs won’t have long to wait to see whether truckers will come running as benefits run out.