MinnEcon: September 3, 2010 Archive

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Drivers wanted! Rise in freight drives trucker demand

Posted at 9:30 AM on September 3, 2010 by Molly Bloom (2 Comments)
Filed under: MinnEcon Indicator, Small business

The website of Universal Transportation Services says it pretty clearly: "Drivers Wanted!!"

But the Minnesota-based trucking company, which has operations in Detroit, Minneapolis, Omaha and Chicago, can't seem to find them - even in a tough economy that has the nation's unemployment rate nearing 10 percent.

"It has become very difficult to find reliable and competent drivers to haul freight in today's market," the company's website says.

Trucking industry representatives in Minnesota say the labor shortage was caused in part by the recession. Unable to find work, many truck drivers became discouraged and found work outside the industry, said John Hausladen, president of the Minnesota Trucking Association.

Increased freight shipments in recent months also have trucking companies competing for a limited pool of drivers.

Hausladen said that in March, one of his members received 70 applications for an open driving position. In August, a similar position only brought in four applicants.

Universal Transportation president and owner and Public Insight Network source Brent Bois said the recession hit his company. Before the recession, they were running an average of 95 trucks a day. In February 2009, their lowest point, they were down to 45 trucks, less than half of their previous business.

But starting in March, companies were starting to want more freight delivered. Bois said shipments are back to pre-recession levels. His fleet of 75 trucks has been so busy that he's looking for more drivers to take on some of that load. Bois said his company could be handling 30 percent more business if they had the truck power.

Another contributing factor is a new set of safety standards adopted by the federal Motor Carriers Safety Administration. The new, more stringent rules have made trucking companies more picky and Hausladen said this is discouraging some drivers from applying.

Minnesota is one of nine pilot states who are using these new federal guidelines, which will be implemented nationally in November.

Under previous federal regulations, when drivers received violations, the companies would be assessed points and the driver's would not be penalized. Under the new rules, violations committed by drivers will follow them no matter who they are working for. If companies or drivers have enough points against them, federal authorities will assess fines.

Companies like Bois' are looking for drivers who will be able to meet the new safety standards. Increasingly they're turning to truck driving programs like the one at Southeastern Technical College in Winona, where a new group of students, usually numbering between 18 and 30, starts the 16-week certification course every eight weeks.

Tom Gierok, a veteran truck driver and instructor who still hauls freight during the summers and weekends, said it was tough to place students in jobs last year. But this year, he said, the college is "close to 100 percent placement after certification."

That's made truck driving an attractive option for those who are retraining for new jobs after losing their old ones.

Gierok's students, who range in age from 18 to 70, can leave after eight weeks of classes and an eight-week internship. First year drivers can earn between $37,000 to $45,000 a year and their salaries will go up as they gain more driving hours.

Gierok, Bois and Hausladen all see trucking as a good economic indicator. With 68 percent of goods transported by truck, Hausladen said, "If you got it, a truck brought it."

What other economic indicators are you keeping an eye on? Tell us what you're seeing here.

Photos courtesy Brent Bois, Tom Gierok

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Teenage wasteland?

Posted at 11:30 AM on September 3, 2010 by Chris Farrell (1 Comments)
Filed under: Jobs & unemployment

From chief economics correspondent Chris Farrell

What a miserable start to the long Labor Day weekend, our yearly national tribute to the American worker. Federal statisticians reported that the nation lost 54,000 jobs in August and the unemployment rate rose a fraction to 9.6 percent. The government's broadest measure of unemployment-and-underemployment-and-marginal-employment also increased to 16.7 percent. While the private sector added 67,000 jobs, the pace of hiring remains anemic thirty-four months after the start of the Great Recession.

That's bad news for the job prospects of most workers. But the unemployment numbers have been positively dire for teenagers, the worst hit group during the Great Recession. The jobless rate for teenagers between 16 and 19 years old was 26.3 percent in August, up from around 15 percent before the recession struck.

Now that the summer is over it's worth taking a closer look at teens and jobs.

It isn't surprising that teens have had a tough time finding work. Who hasn't? And teens by definition don't have many skills to offer wary employers. The hike in the hourly minimum wage from $5.15 in 2007 to $7.25 in 2009 may have hurt a bit. Yet much economic research into the impact of an increase in the minimum wage on employment shows it has had little effect.

Still, the decline in youth employment has been precipitous. A closer look at the numbers suggests it's a tale of two America's: The teenage haves and the teenage have-nots.

For a majority of youngsters the decline in teenage unemployment reflects a long-term trend toward increased investment in schooling. College enrollment rates are at record levels with more than 70 percent of recent high school graduates going to college. That's up roughly 25 percent over the past quarter century. More than half of those ages 16-19 were enrolled in summer school sometime during June through August in 2009, close to three times higher than 20 years earlier, too. Better off parents are willing to pay for extra-curricular activities that may enhance a college resume, such as community service.

The real concern lies with lower income teenagers, especially from African-American and Hispanic families. Minority youths are concentrated in urban areas, while many low-wage entry-level jobs are in the suburbs (think food court). The growing ranks of the poor living in the suburbs tend to congregate in job-sparse low-income neighborhoods, too. Yet car ownership rates are low among the poor and for those dependent on public transit the systems often offer sparse coverage.

The Great Recession has cast a spotlight on the slow, steady erosion in the teenage job market. For those on the middle to upper rungs of the socioeconomic ladder, there's little cause for alarm to the extent that the lack of employment reflects greater investment in education. But the hostile job market is potentially disastrous for the long-term prospects for young adults from low-income families. The financial barriers to college are steep and among some minority groups the high school graduation rate is low, about 55 percent for Hispanics and 51 percent for African Americans. These young adults aren't even learning on-the-job skills that can pay off over a lifetime.

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