Category Archives: Business and economics

Help wanted for 400 jobs, and more

What would happen if an out-of-state employer was prepared to build a factory in Arkansas and pay 500 people a starting salary of $50,000 a year – but was having trouble finding the employees?

The state of Arkansas and the local community would pull out all the stops for that $25 million annual payroll. After ensuring the industrial park had adequate water, wastewater and electrical connections, there might be an offer of state-financed employee training. Then there would be a big press announcement with the governor, the mayor and the plant manager.

What if I told you a similar opportunity already exists with one of Arkansas’ established employers, immediately, with no need for a factory?

Here’s what Steve Williams, CEO of North Little Rock-based Maverick Transportation, told me about his trucking company’s situation.

“I’d go out and buy, easily go out and buy 500 trucks … and have more than enough business for those people to haul. I just can’t find 500 people to train to put in the trucks to do that. It’s literally, they do not exist.”

Because he can’t find enough drivers, Williams is buying about 100 trucks, leaving unfilled 400 jobs with starting salaries of about $50,000 a year. Some truck drivers earn $80,000.

Maverick Transportation is not the only trucking company looking for drivers. The American Trucking Associations estimates that the industry will need to find about a million in the next 10 years. There are many trucking companies in Arkansas. Those trucks also have to be maintained and repaired.

A person can go from unemployed to a truck driving job offer in 20 weeks at a cost of $10,400. That’s what it takes to earn a commercial driver’s license at the Diesel Driving Academy in Little Rock. Barry Busada, senior vice president, said many motor carriers will reimburse drivers for the cost of that tuition after hiring them.

I’ve oversimplified this situation. Many long-distance truck drivers are away from home a couple of weeks at a time, which is why turnover at many carriers is 100 percent a year. New government enforcement mechanisms have reduced the labor pool by forcing carriers to hire only drivers with clean records, which is not a bad thing.

Still, truck driving is a solid, middle class job requiring a skill that can be gained in 20 weeks. Very few college graduates make that kind of money after four or five years of a taxpayer-financed university education.

Two thoughts. First, jobs out there, even in this economy, and not just in trucking.

Second, Arkansas’ education system and workforce policies should be about filling jobs as much as creating them. Yes, Arkansas should nurture high-tech companies and the so-called “jobs of the future.” But Maverick is ready to hire 400 people now, and those jobs don’t require constructing college classrooms or remaking the K-12 public education system. Plus, truck driving jobs can’t be outsourced to China. Diesel Driving Academy students are eligible for federal student aid. Could Arkansas also create or at least encourage truck driving scholarships or loans?

This is not just about driving trucks. It’s about the value Arkansas places on work that doesn’t require a desk or a college degree. In the recent fiscal session, Sen. Jane English, R-Little Rock, changed her vote on the private option from a no to a yes as part of a deal to revamp the state’s workforce training system. English, who has worked years in this field, says the current system is too duplicative, too inefficient, and doesn’t meet the needs of employers or workers. Young people are not encouraged to work in skilled, blue-collar jobs. People aren’t being trained for the jobs that actually are out there.

That would include truck driving, where 400 people could make $50,000 a year, if Maverick Transportation could only find them.

A contrarian – and positive – view of the economy

The economy is not as bad as we are being led to believe, according to Donald Broughton, a St. Louis-based analyst with the Avondale Partners research firm, and the reason is because, despite the chaos of Wall Street, real people are still making stuff and buying stuff.

Broughton bases his opinion on an economic indicator known as truck tonnage. Every month, the American Trucking Associations surveys its members to determine the amount of goods they are shipping on the nation’s roadways. Truck tonnage has proven to be an accurate predictor of economic expansions and contractions. When it’s rising, the economy is improving. And it’s rising.

More accurately, it’s rising on a year-over-year basis. This July saw more tonnage than last July; thus June saw more tonnage than last June, and so on for 20 straight months starting with December 2009.

The past few months have been a little choppy, however. March and June were great, April and May not so much. Bob Costello, the ATA’s chief economist, said that July is typically a soft month, but this July was particularly so.

As for the nation’s 9.1 percent unemployment rate, Broughton said that the best predictor for an improving jobs picture is rising truck driver pay. That’s because for many workers, driving a truck is the job of last resort, and if companies have to pay more to attract drivers, that means they have choices. Driver pay is rising.

Learn more in this week’s column for the Arkansas News Bureau.

And still more good news: Big rig truck crashes way down

A recent report by the pro-trucking American Transportation Research Institute featured a lot of good news, including this: The number of fatal crashes involving large trucks dropped from 5,684 in 1979 to 2,987 crashes resulting in 3,380 fatalities in 2009.

Here’s another way of looking at it: They dropped from 2.2 per 100 million vehicle miles traveled (VMT) to fewer than 1.3 from 2000 to 2009.

Big rigs also are causing far less injuries as well as property damage now than they were in the past.

The report, “Predicting Truck Crash Involvement: a 2011 Update,” was prepared by Micah Lueck, ATRI research associate, and Daniel Murray, ATRI vice president of research.

The purpose of the report was to analyze which driver violations and convictions in 2008 were most closely associated with a crash in 2009 and to compare that with a similar report done in 2005.

The most predictive behavior, surprisingly, was a conviction for either failing to use a turn signal or using one improperly, which increased the likelihood of a cash by 96 percent.

Why would such a seemingly minor conviction lead to so many more crashes? Murray said the industry has greatly reduced the number of truly hazardous drivers in recent years. A driver who doesn’t obey such a basic rule as using a turn signal properly, on the other hand, is an accident waiting to happen.

The Federal Motor Carriers Safety Administration recently adopted a new enforcement mechanism, CSA, that better keeps track of company and driver violations. It will make it very difficult for unsafe drivers to job hop from company to company, as they sometimes do now. It’s a headache for companies, but it seems likely to make our highways safer.

CNBC ranks Arkansas 33rd overall in business survey

Arkansas ranks first in the cost of doing business in a new CNBC survey but 33rd overall, one worse than last year.

The state ranked first in the cost of doing business and fourth in cost of living but fared poorly in the usual suspects: 45th in quality of life (I beg to differ); 44th in technology and innovation (sounds about right); 44th in business friendliness, meaning its legal and regulatory environment (GOP, this is your chance to help the state); and 40th in infrastructure and transportation (not going to fix that one this year).

Virginia was ranked first while Texas was second, so get ready to hear from the Legislature’s Rick Perry caucus.

Here’s the link to the story.

Yarnell’s – It’s my Mom’s fault

Within hours after Yarnell’s announced it was closing shop, the Republican Party of Arkansas was ready with a press release blaming the Democrats.

This, of course, is what politicos do – play the blame game, and the Democrats are no different.

But really, it’s not Beebe’s fault, or the Republicans’ fault, that this Arkansas institution is shutting down. It’s my Mom’s fault.

Mom told me last weekend that she didn’t buy Yarnell’s for a simple reason: She didn’t like its fat-free flavors. She likes Blue Bell – you know, that Texas company.

Mom is one of millions of consumers simply making choices in a free market economy. It turns out that a lot of them – in fact, too many of them for Yarnell’s to survive – chose of their own free will to purchase another brand.

Certainly government can enact policies that make it easier for regional independents like Yarnell’s to survive – mostly by NOT enacting policies that favor big corporations. But this never-ending blame game really doesn’t solve anything.

To read more about Yarnell’s – and my mom – check out my Arkansas News Bureau column here.