Can Increased Trucker Salaries Lead to Safer Roadways?

Fatal truck accidents have increased by almost 40 percent over the last decade. In 2022 alone, 168 thousand truck accidents occurred that resulted in nearly five thousand deaths.

In a recent article, Shengyang Ju, a senior manager at General Motors Financial, and Michael Belzer, professor of economics at Wayne State University, propose increasing truck driver salaries to reduce truck driver violations of existing time limits for hours of service on the roads. They argue that because drivers self-report their time and may have incentives to extend their hours for increased pay, the industry should increase driver compensation to ensure compliance with the maximum allowable driving limits—enhancing roadway safety.

The U.S. Congress enacted truck safety legislation—known as Title 49—to authorize limits on truck drivers’ working hours, ultimately seeking to enhance driver and roadway safety. Title 49 follows decades of deregulation beginning with the Motor Carrier Act in 1980. The Act reduced regulations on the industry and made it easier for new truck carriers to enter the market, which increased market competition in an industry central to the U.S. economy.

One unintended consequence of deregulation included a reduction in driver salaries due to increased competition and recruitment of less experienced drivers—some as young as 18 years old. Competition for employment and livable wages forced drivers to log extended hours and encouraged drivers to break time restrictions by inflating the number of hours worked. Ju and Belzer explain that the current compensation structure encourages drivers to work long hours in pursuit of higher total wages, even if it means violating current regulations.

The Fair Labor Standards Act sets minimum hourly wage standards for production workers. Truck drivers, however, fall under a partial exception. The exception allows them to monitor and record the number of hours they work using logbooks. But truck drivers frequently manipulate their logbooks, allowing them to work well beyond the legal limit, according to Ju and Belzer. They contend that lax logbook compliance oversight contributes to unsafe driving, including traveling long distances, speeding, and driving on insufficient sleep, among others.

Ju and Belzer underscore that industry regulators play a pivotal role in ensuring safe practices within the industry. Regulators, however, face challenges in collecting and analyzing data to identify trucking companies that encourage inaccurate logging habits. Ju and Belzer urge trucking companies to establish mechanisms to reduce the trade-off between money earned and hours an employee drives.

Ju and Belzer argue that driver compensation is a key predictor of driver safety. Following what is known as the efficiency wage theory, they claim that if employers pay their workers above market rates, the employees will comply with logbook requirements, leading to improved driver safety performance. For example, one study found that a 10 percent increase in total wages correlated to a 21 percent reduction in the probability of a crash.

If drivers are less concerned about their incomes, they may become less inclined to inflate their hours in an attempt to earn more money, Ju and Belzer’s research suggests.

The increased wages of drivers would likely create reduced recruitment, training, and retention costs, making companies even more profitable, Ju and Belzer further argue.

Opponents of the efficiency wage theory contend that the theory fails to acknowledge that the original theory was developed to explain persistent unemployement rather than a strategy for profit maximization.

But statements from the Secretary of the Treasury, Janet Yellen, refute this argument, suggesting that workers, once they achieve income “earning targets,” will choose leisure time over working more hours. Using her theory, Ju and Belzer hypothesize that drivers will be less concerned about their incomes and, in turn, will become less inclined to inflate their hours in an attempt to earn more money.

Recently, a bipartisan group of lawmakers introduced a bill to grant overtime pay rights to millions of truck drivers to address wage shortcomings in the industry. The proposed legislation aims to improve driver safety and reduce driver turnover by increasing truck driver wages. The bill embraces studies that suggest increasing pay for drivers reduces crashes.

This legislation supports Ju’s and Belzer’s argument that compensation directly influences the trucking industry’s safety and performance.

Increased driver wages can strengthen safety in the trucking industry, but only when truck drivers adhere to work limit requirements, the authors argue. With increased pay for drivers and better logging compliance, Ju and Belzer assert that fatal trucking accidents can decrease over time, saving many lives on the road.