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Stagnant US trucker wages raise questions about macro theory

Summary:
In spite of a thriving economy and driver shortages, wage growth in US haulage have been lagging, leaving economists (and Fed officials) scratching their headsDespite a huge shortage of drivers and soaring transportation costs as a result, wages in the US haulage sector have remained stuck. This illustrates the ongoing chasm between macro theory (which would suggest much stronger wages) and reality (still-tepid wage growth).While microeconomic dynamics specific to the sector might be at play (beyond the scope of this note), some broader macro factors could have a role as well, including the rising bargaining power of firms compared to workers, the low and falling unionisation rate, a workforce that is less mobile than before, as well as the rise of benefits in kind (healthcare benefits

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In spite of a thriving economy and driver shortages, wage growth in US haulage have been lagging, leaving economists (and Fed officials) scratching their heads

Despite a huge shortage of drivers and soaring transportation costs as a result, wages in the US haulage sector have remained stuck. This illustrates the ongoing chasm between macro theory (which would suggest much stronger wages) and reality (still-tepid wage growth).

While microeconomic dynamics specific to the sector might be at play (beyond the scope of this note), some broader macro factors could have a role as well, including the rising bargaining power of firms compared to workers, the low and falling unionisation rate, a workforce that is less mobile than before, as well as the rise of benefits in kind (healthcare benefits and pensions) in lieu of salaries.

This said, wage growth continues to gradually march higher throughout the US economy.

 But the puzzle of a very tight labour market and relatively lukewarm wage growth remains.

Stagnant US trucker wages raise questions about macro theory

Thomas Costerg
Thomas covers the US and Canadian economies from New York. He was previously based in London, covering the UK and the euro area. Thomas started his career with Lehman Brothers in London in 2007 and also worked at a Paris-based private bank and asset manager. Do not hesitate to contact Pictet for an investment proposal. Please contact Zurich Office, the Geneva Office or one of 26 other offices world-wide.

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