Walmart is turning heads with a pledge to pay its truck drivers up to $110,000 a year in their first year, double the salary of what some other drivers are making.
At a time when the job market is tight and consumer demand is high — the Consumer Price Index hit 7.9% in February — Walmart’s
WMT,
+0.56%
announcement is another sign of the lengths employers are going to attract and retain workers.
More specifically, it’s another potent sign of increased worker demand in the transportation sector. The question is how many potential workers will go along for the ride, at Walmart and elsewhere.
Walmart drivers previously made up to $87,500 in their first year, a Walmart spokesman told MarketWatch. Drivers for the big-box store with more than one year on the job now have the potential to earn more than $110,000, the company added.
“We are seeing historic pay increases like this industry-wide, as carriers look to recruit new drivers amid a nationwide shortage that was exacerbated by the pandemic,” American Trucking Associations spokesman Jeremy Kirkpatrick said in response to the Walmart news. “Trucking represents one of the clearest paths in today’s economy to the middle-class without the costly requirements of a college degree,” he added.
Wages are chasing inflation
Drivers with an irregular route made a median salary of more than $53,000 a year, while drivers on a private fleet — like Walmart’s operation — made an average $86,000 a year, according to a 2020 compensation survey by the American Trucking Associations.
Recent jobs report data indicates transportation and warehousing work are some of the rare sectors where wage growth is keeping up with inflation. Average hourly earnings across all jobs grew a strong 5.6%, the March jobs report showed.
The wages of the country’s 5.6 million transportation and warehousing jobs grew 7.9% year-over-year, the Bureau of Labor Statistics showed. Leisure and hospitality jobs were the only place where hourly wage growth was higher, at 11.8%.
Overall, general freight trucking has 940,600 workers, according to Bureau of Labor Statistics preliminary data. That includes short- and long-distance drivers, with the sector adding roughly 40,000 more workers compared to the same point last year.
Demand for drivers
Here’s the rub: America’s trucking industry needs another 80,000 drivers if it’s going to meet consumer demand, according to Chris Spear, president and CEO of the American Trucking Associations.
The industry is grappling with high turnover, but the trade association said it’s not because drivers are leaving the industry altogether; they’re bouncing from one company to another, eyeing better pay, routes and benefits. That job-hopping is happening all over the economy.
“We’re witnessing unprecedented pay increases across the industry,” the American Trucking Associations said in a blog post. Weekly earnings are five times the historical average and fleets are dangling “sizable, five-figure sign-on bonuses and full benefits as they all compete for the same limited pool of drivers.”
Walmart is creating a training program for prospective drivers and, in some areas, paying for the commercial driver’s license.
There are approximately 12,000 drivers already in Walmart’s fleet. Though Walmart didn’t say how many more people it’s ready to hire, the announcement makes it clear the company is in hiring mode.
“Our transportation team will continue to grow with our business, and we’ll continue to invest in them along the way,” the company said.
Walmart shares are up almost 9% year to date. The Dow Jones Industrial Average
DJIA,
+0.40%
is down 4% while the S&P 500
SPX,
-0.27%
is down approximately 5%.
