The U.S. Bureau of Labor Statistics reported last week that 155,000 jobs were added nationally during December, with the national unemployment rate remaining unchanged at 7.8%. For trucking, a key portion of this report was that manufacturers and construction firms respectively added 25,000 and 30,000 workers to their payrolls. This underscores that a sizeable reduction in potential truck drivers may be an important factor for the trucking industry during 2013.
Anyone who has spent a long time in trucking can tell you that construction and manufacturing are some of the closest employment substitutes for possible truck drivers. Like trucking, these occupations are physically demanding, require long hours, and necessitate safe handling of heavy equipment.
As an economist, I am interested in exactly how close manufacturing and construction are as substitutes for trucking employment. To address this question, I use the “Merged Outgoing Rotation Groups” version of the Current Population Survey (CPS), which is originally collected by the U.S. Census Bureau in partnership with the Bureau of Labor Statistics.
One feature of the CPS is that many individuals are surveyed about their employment twice, one year apart. This allows for researchers to link (anonymous) individuals across two sequential years to examine changes in their employment. Below, I use the CPS from 2000-2011 in this way to study transitions into and out of full-time employment as a truck driver.
Over the past decade, the U.S. averaged roughly 4.15 million truck drivers each year, representing around 2.6 percent of all full-time employees. Note that this number includes all surveyed individuals who described their employment as truck driving, not just TL and LTL truck drivers. The data do not allow for further dissection of this occupational category.
Using the sequential links in the data, the CPS shows that about 75% of respondents who were employed full-time as truckdrivers remain employed full-time as truck drivers during the following year. In Figure 2, I examine the roughly 25% of drivers who changedeither to or from driving a truck for employment from one year to the next.
Figure 2 displays the ten largest employment categories for individuals who transitioned into or out of full-time truck driving between their surveys. Interestingly, transitions to and from other types of employment appear to be very balanced, with drivers as likely to switch to any other particular occupation as they are to switch from it.
Of truck drivers who changed their full-time occupation, the largest employment category is Other Transportation or Warehousing (e.g. driving a bus). Construction and Manufacturing are respectively the second and fourth most likely alternate industries for truck drivers, representing a combined 17% of occupational transitions. So, during the past decade about 4.25% (17% of 25%) of truck drivers shifted to employment in either construction or manufacturing from year to year.And, about 4.25% of “new” truck drivers transitioned from either construction or manufacturing in each year.
For these reasons, it is well worth keeping a close eye on anygrowth in construction and manufacturing employment as we enter 2013.
About the author
Jeremy West is the Internet Truckstop research economist for the weekly Trans4Cast. Jeremy examines the broader economic picture and reports how the current economic headlines relate to the trucking industry. He holds a bachelor of science in Economics, with minor degrees in Business and Creative Studies, from Texas A&M University, where he is currently completing a doctorate in Economics. His research focuses on empirical analysis of topics in industrial organization, particularly those affecting the transportation sector. In addition to his academic training, Jeremy held several previous positions in corporate financial planning and economic forecasting. Jeremy enjoys the opportunity to offer highlights and analysis of the trucking industry to subscribers each week. Take advantage and subscribe today!