Port Truckers to get a Fair Deal: Fair wages and benefits at the Port of Los Angeles
Today is the first day of the landmark Clean Truck Program at the Port of Los Angles. The winners of this new program will be those living in the communities surrounding the ports – who will see a significant improvement in the quality of the air they breathe – and the truckers that service the ports. Port truckers will finally be able to earn wages and receive benefits that are equal to other truck drivers.
The program immediately bans the dirtiest trucks from operating at the ports and requires that all trucks comply with 2007 EPA standards by 2012. The program has the potential to eliminate up to 1,400 premature deaths due to emission-related disease between now and 2025. The program could save over $2.2 billion related to health impacts over the first five years.
However, if the plan is to succeed, there needs to be a major restructuring of the port trucking industry. Specifically, in order for the full benefits of the program to be felt, port drivers need to become employees, rather than remain independent-owner operators.
Port Truckers Get a Raw Deal
After the deregulation of the trucking industry in 1980, trucking companies were given the choice of hiring employees or to contract with independent-owner operators. Most of the time trucking companies make the decision that saves them the most money: by using independent-owner operators, the companies do not have to provide drivers with any health benefits, do not have to pay payroll taxes, and do not have to contribute to Medicare and Social Security. What’s more, the cost of truck maintenance, insurance, and fuel falls not on the trucking companies, but on drivers. These costs significantly reduce the amount of pay drivers take home after expenses.
Because of they are considered independent contractors, these drivers can not organize to negotiate better wages, benefits, or working conditions. Despite their "independent" status, independent-owner operators are employees in all but name: they assume most of the risks associated with port trucking but enjoy few benefits of being “independent businesses.” In order to get any work, drivers must go through the trucking companies who act as brokers between the drivers and shippers. Drivers cannot negotiate their fees or wages; these wages are largely dictated by ocean shipping lines and agreed on by the trucking companies. Truckers are then paid by the load, not by the hour, and therefore are not paid for the hours spent waiting in long lines at the port.
The result is that today, 80 percent of the truck drivers servicing the Port of Los Angeles are independent-owner operators. These drivers earn on average, after subtracting truck-related expenses, $29,600 annually, or about $12 an hour. This hourly wage is only two-thirds of what employee-drivers earn. Additionally, surveys of truck drivers at the Port of Los Angeles show that 90 percent of drivers do not have health insurance of any kind and only five percent have retirement benefits.
The Clean Truck Program will change that. It requires that any trucking company operating at the port use only employee-drivers. The trucking companies would be responsible for updating and maintaining truck fleets that comply with the port’s clean truck standards.
But why is an employee-driver requirement included in the Clean Truck Program? What do employee-drivers have to do with cleaner trucks?
First, port truck drivers simply do not earn enough to switch to cleaner truck technology and to continue to maintain their trucks to meet clean truck standards. New trucks cost over $100,000, and even after including the grants that the port is offering to ease the transition to cleaner trucks, the average driver would still have to take out significant loans to purchase a new truck. Because port drivers operate on a slim margin, such high costs would cause many drivers to leave the market. Those that remain would have little incentive to adopt the cleanest technology and to maintain their trucks to the highest standards.
Second, by stabilizing the labor market for drivers, the program would be able ensure greater accountability, stability, and continuity. Because of the large number of independent-owner operators and the high rate of turnover for these drivers, it would be difficult to track compliance with clean truck regulations.
Lastly, the Clean Truck Program shifts the burden of environmental justice from those least likely to bear it, truck drivers, to those who are most able to bear it, ocean shipping lines. These large global operations will be much more able to absorb the costs that for too long have been shifted onto the communities surrounding the ports in the form of environmental degradation and negative health impacts. In the process, port drivers will also get their share of labor justice as well.
If you want to learn more about how Los Angeles was able to pass the Clean Truck Program, join us at our next Marketplace of Ideas event with the Mayor Antonio Villaraigosa on October 14.