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How Goldman Sachs and Other Companies Exploit Port Truck Drivers

Companies are profiting off the backs of port truck drivers, a class of exploited workers who are a crucial lynchpin in our economy.

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That's how port truck driver Leonardo Mejia from Los Angeles sees it, too. Drivers, he says, "are part of the 99 percent." Mejia drives for Shippers Transport Express in Los Angeles and says that he's excited about the action, even if work stops at the nation's largest port complex. It means that he and most of his fellow drivers (not just the 1 percent) will also not be making any money that day. Mejia is part of the 82 percent of port truck drivers in the United States that are classified as independent contractors and not employees.

Mejia and other drivers (as well as a massive coalition of labor, religious, community, and environmental organizations) believe this is a misclassification. The difference between being an independent contractor or an employee in this industry is critical to earning a living wage.

"Right now, all we do is work to live," says Mejia, who has been working as a port driver for 10 years. "I know drivers that work 16, 18, even 20 hours every day. Every day," he says. "They can't spend time with their families. I have a few friends that, when I started working on the ports, they were married, had children. Now most of my friends are divorced. They spent too much time working, or they didn't have enough money to support their families."

Drivers are struggling to make a living, and most are living without any safety net — no health insurance, disability insurance, unemployment insurance, or retirement funds. But it hasn't always been this bad. The culprit, as with so much of our financial woes today, stems from deregulation. As David Bensman of Rutgers University writes in the report Port Trucking Down the Low Road: A Sad Story of Deregulation:

It is ironic that port trucking has become the poster child for destructive deregulation, because the passage of the bill that deregulated the trucking industry, The Motor Carrier Act of 1980, was hailed by liberals and the business community alike as a triumph of policy reform. Senator [Ted] Kennedy and Ralph Nader led the reformers who charged that trucking regulation meant high rates for consumers, and monopoly profits for businesses. Large shippers lobbied Congress for an end to the rate setting and route planning which limited competition and drove up the cost of freight transport. Civil Rights organizations argued that deregulation would lower barriers that impeded African-Americans from gaining a just share of decent trucking jobs. Despite these high hopes, deregulation has wrecked the drayage industry.

Unfortunately, deregulation was disaster. As Bensman writes, "Before 1980, trucking companies had to get a license from the Interstate Commerce Commission to haul freight to and from the ports. The ICC limited the number of trucks to assure stability; the resulting rate structure was sufficient for companies to earn stable profits while providing workers with decent wages with benefits. The International Brotherhood of Teamsters organized and bargained for most of the port truckers, who received wage and benefit packages comparable to those of autoworkers, steelworkers, and over-the-road drivers."

After deregulation, union companies were forced out of the market, and new companies found a way to squeeze even greater profit at the expense of workers. They sold their trucks back to drivers, Bensman explains, and then made them "independent contractors," meaning that the drivers would not make an hourly wage but instead would be be paid per load, and companies would no longer be responsible for costs such as health care, social security, worker's compensation, pensions, and payroll taxes.

The report, The Big Rig: Poverty, Pollution, and the Misclassification of Truck Drivers at America's Ports by Rebecca Smith, Dr. David Bensman, and Paul Alexander Marvy, found that just four years after the industry was deregulated, wages dropped 15-20 percent and fell to 30 percent lower by 1995. According to the report, today contract drivers make an estimated $11.91 per hour, compared with $14.71 for employees. Even despite the several dollar difference in pay each hour, real wages for contractors are even lower — closer to $8 an hour.

 
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