11:16am

Thu October 13, 2011
Economy

A Labor Mismatch Means Trucking Jobs Go Unfilled

Originally published on Thu October 13, 2011 7:25 pm

The job market is barely treading water. The Labor Department reported Thursday that 404,000 more people filed for unemployment benefits last week, a number that's essentially unchanged from the week before.

Overall, there are 14 million people looking for work in the U.S., but at the same time there are still job openings around the country.

A surprising number of those openings are going unfilled because employers can't find qualified people — what economists call the labor mismatch. Even with so many people looking for work, many employers say they can't find the right people to hire.

"We have had a job trying to find qualified people," says Kevin Mirner, chief executive officer of Harcros Chemicals in Kansas City, Kan. He was speaking with a panel of CEOs at a business school where this question came up.

Mirner is having trouble finding people with chemical engineering degrees. But he says the problem isn't just with such highly skilled workers.

"Even farther down the distribution business, there's a shortage of truck drivers in this country," Mirner says. "[It's] incredible. ... I mean, there's a skill in driving trucks, don't get me wrong," but he says it's something people can learn.

Still, Mirner says, "we're finding there's a shortage. You listen to the radio, there's commercials for truck companies trying to attract drivers."

Seeking Trained Truck Drivers

Bob Petrancosta, a vice president at nationwide trucking company Con-way Freight, says the truck driver problem is real.

"It is very true, contrary to logic as the economy continues to struggle and unemployment runs high," he says. "In the trucking industry we're experiencing just the opposite: a driver shortage where demand for qualified drivers is very strong at the moment."

Petrancosta says many drivers are getting older and retiring. Meanwhile, he says, it can cost upwards of $4,000 for unemployed people to go to a good trucking school to be trained. The result is that trucking companies like his can't hire qualified people fast enough.

So the company started free driving schools at 75 of its truck yards, with a guaranteed job for people who complete the training.

Petrancosta says that over an 18-month period since the effort got started, "we have graduated nearly 440 drivers and we have a retention rate of 98 percent."

That's because these are good jobs, Petrancosta says. At least at his company there are no long hauls, so the drivers sleep in their own beds every night.

The pay isn't bad either: Pentacosta says a driver with Con-way Freight can expect to make $60,000 to $70,000 a year driving a truck.

The Role Of The Housing Crash

So how does the truck driver problem fit into the overall picture in terms of how many good jobs are going unfulfilled because of the mismatch in the labor market?

Giorgio Topa, an economist with the Federal Reserve Bank of New York, says there's always going to be some level of mismatch in the economy.

One idea that's been kicked around is that the housing market crash has trapped people in their homes, meaning they can't sell them and move to find a new job. But Topa and his co-economist at the New York Fed, Aysegul Sahin, who also studies this issue, say recent research has debunked that idea.

"We find that geographic mismatch is not very important," says Sahin.

As far as how many jobs are going unfilled because employers can't match up jobs with the right workers, Topa says that there are anywhere between 4 and 5 million available jobs right now in the economy, and that maybe around 1 million go unfilled because of the labor mismatch.

If those million jobs could be filled — and that's a significant number — that would drop the unemployment rate from around 9 percent to around 8 percent. But the economists stress that these are ballpark figures and you couldn't really fill all these jobs that way: You'd have to turn construction workers into doctors overnight, or English majors into engineers.

Also, they say most of the mismatch involves higher-skilled workers, so there aren't too many opportunities as in trucking, where quick training can land a good-paying job.

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Transcript

GUY RAZ, host: Now, given what you've just heard about jobs, our next story may surprise you. There are job openings around the country, jobs that employers are desperate to fill. NPR's Chris Arnold reports on what economists call the labor mismatch.

CHRIS ARNOLD: Even with so many people looking for work, many employers out there say that they can't find the right people to hire.

KEVIN MIRNER: We have had a job trying to find qualified people, and on the...

ARNOLD: That's Kevin Mirner, the CEO of Harcros Chemicals in Kansas City. He was speaking with a panel of CEOs at a business school where this came up. Mirner says that he's having trouble finding people with chemical engineering degrees. But he also says that the problem is not with just such highly skilled workers.

MIRNER: Even farther down the distribution business, there's a shortage of truck drivers in this country. I mean, incredible when you think - I mean, there's a skill in driving trucks, don't get me wrong, but I mean, you know, it's not – you know, it's something people can learn. And we're finding there's a shortage. You listen to the radio, there's commercials for truck companies trying to attract drivers.

(SOUNDBITE OF TRUCK DRIVING COMMERCIAL)

UNIDENTIFIED MALE SPEAKER: Attention Class A drivers, immediate job opportunities are now available at Rush Trucking. Why Rush Trucking?

ARNOLD: To find out whether that's really true, we called up Bob Petrancosta, a vice president at Con-way Freight. That's a big nationwide trucking company.

BOB PETRANCOSTA: It is very true. Contrary to logic, you know, as the economy continues to struggle and unemployment runs high, in the trucking industry, we're experiencing just the opposite: a driver shortage where demand for qualified drivers is very strong at the moment.

ARNOLD: Petrancosta says that many drivers are getting older and retiring. Meanwhile, he says, it can cost upwards of $4,000 for an unemployed person to go out to a good trucking school and get trained. The result of that, he says, is that trucking companies like his can't hire qualified people fast enough.

So the company has now started free driving schools to offer that training at 75 of its truck yards. And that's with a guaranteed job for people who complete the training.

PETRANCOSTA: We have, to date, over 18-month period when we first began the driving schools, we have graduated nearly 440 drivers and we have a retention rate of 98 percent.

ARNOLD: Petrancosta says that's because these are good jobs. At least at his company, there's no long hauls, so the drivers sleep in their own beds every night. And the pay is not too bad either.

PETRANCOSTA: A driver with Con-way Freight can expect to make 60, $70,000 driving a truck.

ARNOLD: But okay, so there's this big demand for truck drivers right now. But how does all this fit into the overall jobs picture? How many good jobs like this are actually going unfulfilled because employers can't find workers with the right skills? This is what economists call mismatch in the labor market.

Dr. GIORGIO TOPA: There's always going to be some level of mismatch in the economy.

ARNOLD: That's Giorgio Topa, an economist with the Federal Reserve Bank of New York. He studies this issue, along with his co-economists at the New York Fed, named Aysegul Sahin.

One thing that we wanted to ask them about is this idea that's been kicked around, that the housing market crash has trapped people in their homes. They can't sell their houses and so that means they can't move to find a new job.

Dr. AYSEGUL SAHIN: So one thing I can tell you before - while Giorgio is looking at numbers - is we find that geographic mismatch is not very important.

ARNOLD: The economists say recent research has debunked that idea. As far as how many jobs are going unfilled...

TOPA: There's anywhere between four and five million available jobs right now in the economy. Maybe about one million goes unfilled because of this mismatch between employers and job-seekers.

ARNOLD: So that actually sounds like a significant number of jobs that are going unfilled.

TOPA: Yeah, right.

ARNOLD: If those million jobs could be filled, that would drop the unemployment rate from around nine percent down to around eight percent. But these economists stress that these are ballpark figures and you really couldn't really fill all these jobs that way. You'd have to take construction workers and turn them into doctors overnight, or take English majors and make them engineers.

Most of the mismatch also involves higher-skilled workers, so there aren't too many opportunities like trucking, where some quick training can actually land a good-paying job.

Chris Arnold, NPR News. Transcript provided by NPR, Copyright NPR.