>There has been a driver shortage for 10+ years
How does that square with the low net compensation of the drivers? Is there perhaps a secondary mechanism, other than the (asserted) labor supply shortage, that depresses the wages?
How does that square with the low net compensation of the drivers? Is there perhaps a secondary mechanism, other than the (asserted) labor supply shortage, that depresses the wages?
People refuse to pay more for this and if you've invested so much for truck, car insurance, etc...
Can you expand on what you mean by "supply side economics breaking down"?
Owning a truck is a lot of maintenance - insurance, parking costs, etc. A lot of owners also have to pay lease, loans, etc. They can't afford to negotiate for better rates.
Just because there isn't a lot of supply doesn't mean that rates go up!
If the people hiring these independent trucks can afford not to pay more, because they know someone else will take the lower rate, then there isn't a shortage. This could just about be the definition of whether or not there is a "shortage".
It doesn't make sense because we keep getting fed a simplistic view of "supply vs demand." That is a general trend, but not a rule.
If you know you have to work to keep your means of survival, you don't negotiate. We've seen salaries/bonuses/rates slowly go up, but there's always some other sucker who has to be able to pay their bills. Even if this means stuff getting to their destination later than usual.
A lot of truck businesses are owner operated, they simply don't have the means to say "no."
Unless there's a significant over-supply of the sellers. In which case the buyer can wait out any given seller, and get better deal from the next seller that comes around.
>If you know you have to work to keep your means of survival, you don't negotiate.
The very same concern goes for the buyers. They are just as well under the pressure of contractual deadlines and bills to pay.
I am sorry, but your post strikes me as example of "magical thinking" - "there must be something special about the owner-operated transport businesses". Yet nobody has provided any serious arguments towards that.
Just for the sake of contrast - you could imagine brain surgeons in the very same predicament. Suppose there were plenty of brain surgeons on the market - their prices (wages) would be very low, sometimes even below the costs incurred. No matter how pressed a patient would be for a life-saving operation, if there were multiple surgeons fiercely competing for this work, the price would be low.
The only reasons the brain surgeons are earning well is that the demand for service is higher than the supply - and there's little to no alternatives to a life-saving surgery.
You may balk at the example of highly skilled specialist surgeon, but it's true story of the eastern block [i.e., communist] countries, where supply of doctors was high, and the demand - which was only the state-funded healthcare - was fixed[1]. The surgeons earned rather low wages, and many supported themselves with bribes for access and expedited treatment.
Please don't tell us there's been "driver shortage for 10+ years". It's just fantasy.
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[1] from the layman's POV "demand" for surgeries was high and nearly insatiable, but from the economics POV, demand with willingness to pay was fixed by the centralized healthcare planners.