Cost of Living

Today I have a topic that few others ever touch…  “The cost of living.”

The topic is often painted with a broad brush. I would like for us, as an industry to open up this discussion now as we are in the midst of HOS changes, a growing economy, and continued rule making. Now is the time to set the stage for the industry future.

I think going forward from here requires us to define what is reasonable to expect for our labors. This is not about what the market willing to pay, but what it should pay. You’ve heard the old line that truckers can’t agree on anything.

Well I’ve made the argument many times that there are three things we all can agree on,  #1; We need more pay,  #2;  We need full healthcare and,  #3; We need a reasonable retirement.

To get to these things we need to decide what reasonable pay, health care, and retirement are. Then we as an industry need to demand these as a standard for our services.

As regulations change we need to demand reasonable compensation for the effects of the regulations. Cost-of-living is usually defined in dollars. Because cost vary from one part of the country to the next you have to think in terms of man-hours exchanged for goods and services. I.e. what will one hour of labor buy you?  My father-in-law, in 1976, was a company driver that did OTR. In ’76, if you worked long haul, you were definitely middle-class. You were able to provide for your family very well.

My question today is, “what is reasonable to ask for as drivers?” How much does it cost, and how does that breakdown in cents per mile?  (Use national averages. Based on 10,000 miles per month.)

Things to consider in your cost-of-living are;  house payment, food, miscellaneous household expenses (such as clothes, utilities, etc.), transportation expenses (like car and insurance), health insurance, life, dental and optical insurance, and co-pays. Also, the amounts not covered by insurance. We should also include retirement, savings, and money for recreational events for the family.

Healthcare expenses and retirement are two of the most important factors in our business today. Healthcare cost varies greatly from having no insurance to full coverage. There are many policies and plans out with a variety of deductibles and coverages.  Take time to find the one that is most suited to your budget and situation. For company drivers, you may have an option of purchasing your healthcare through your employer. If you can, often time that is the least expensive route to go, but not always. Just remember your total health care costs include not only the cost of your insurance but the cost that insurance doesn’t cover. Total health care cost can usually be estimated at around $1500 a month. Included in your healthcare costs should also be a good dental and optical plan. With the elevated cost of dentistry, many dentists are finding it hard to stay in business because it is a luxury fewer and fewer of us can afford.

Retirement is another major expense that very few of us drivers can afford without help. The amount of money in a personal retirement account that you need for your retirement is dependent upon your living situation. How much money you wind up with in your personal account depends on how aggressive you are at contributing to your retirement and how many years before you start your retirement. It is reasonable, with today’s dollars, to expect and need a retirement account worth a minimum of $500,000 at maturity. At a 5% interest rate this would bring you about $25,000 per year. Combine that with the Social Security and Medicare and possibly AARP benefits, you might have a reasonable standard of living in your retirement years. When calculating your need, allow for an average of 3%  inflation per year. If you deposit $1000 per month in an IRA for 30 years that would give you $360,000 plus interest earned. For a driver running 10,000 miles per month that would come out to $.10 a mile for your retirement.

STATISTICS to consider:

  • The median income in America is just under $50,000.
  • Economics is determined by the exchange rate of man-hours to goods and services. Money is simply the medium used to make this exchange
  • 60 to 65% of health care spending comes from programs such as Medicare, Medicaid, Tri-care, The Children’s Health Insurance program and, the Veterans health administration.
  • US Census Bureau reported that a record 50.7 million residents (which includes 9.9 million noncitizens) or 16.7% of the population, were uninsured in 2009
  • a 2000 study in five states found that medical debt contributed to 46.2% of all personal bankruptcies, and in 2007. 62.1% of all filers for bankruptcies claimed high medical expenses.
  • The price of a home in 1963 was $18,000, 1980 was $64,600, 1990 was $122,900, 2000 was $169,000, and in 2010 it was $221,800. With a high of $247,900 in 2007.
  • In February of 2000, I received a letter stating that fuel prices up to $1.199 no fuel surcharge. For every five cents of increase in fuel price after that there would be an additional 1% fuel surcharge.

As a rule of thumb, driver pay and fuel costs should be about the same. Not including insurance benefits.


Start by making a list of your entire home expenses, not only the ones you have, but the ones you should have. Then, take your average miles per month and divide the amount of your cost by the amount of your miles. This will give you a picture of how many cents per mile you need to make to pay your bills. Having that knowledge is the first step.

  • Use that information when you seek employment or ask for a raise. If an employer says that it is too much money, then you show him your list and ask him what you don’t need. Making your employer aware of your needs may be the first step of getting closer to providing those needs.
  • Promote the full disclosure of rates as they are paid from the shipper to the receiver. Use that information to show how much is being kept from you or at least what percentage of that you’re being paid..
  • Use your CSA score to increase your pay. With the new regulations coming, your driver score is more important than ever. A good driver score will be worth a lot of money to a company. Use it to your advantage.
  • Your personal hygiene is probably as large of a factor in your message being received well as the presentation of your need itself. There is no substitute for smelling clean and wearing clean clothes. After all you are presenting yourself as a professional.
  • Education is the key to making good decisions. Always be aware of what your options are. This may be information about how much the competitors pay if you are a company driver or lease owner operator. It may mean keeping up with current events in the industry such as changing hours of service rules and other rules imposed by the FMCSA. Aside from road dog radio, there are many publications about the trucking industry to gather information from. One of the most dependable is the publication by OOIDA called Land Line. Another is a free publication called Overdrive Magazine. You can even receive the digital copy of each. Find a publication that can be sent to your home every month or viewed online to keep you abreast of changes you may not be aware of.
  • I recommend that all drivers, including company drivers, join one of the several driver advocacy groups. My personal favorite is OOIDA. Then make your opinions heard by the leadership of these groups. They have the power to lobby as a group that you don’t have as an individual. If you support these organizations, consider contributing to their lobbying fund or PAC.
  • I also recommend that you all, if you don’t already, call your federal and state senators and representatives often to express how you feel about issues. It’s not hard and you don’t have to be a really good public speaker. Just call the White House switchboard at 202 – 224 – 3121 and give them your zip code. They will then put you through to your representative or your senators. Leave a message with their aid and your opinion will be registered. Also, take a look at Sometimes it seems like they never listen but your vote and combined voices are the only things more powerful than lobbyist money.
  • Have conversations with your fellow drivers and point out how much more money we need than we are being paid. Not in a whining way, but in an educated way. Ask your fellow drivers to get involved to help make a difference. Remember, “The squeaky wheel gets the grease”.
  • Holding down Inflation in the United States can no longer ride on the backs of truck drivers. We are not responsible for inflation created in the market simply by trying to provide for our needs and our family’s needs. Controlling inflation is an argument that’s used by many to keep us poor so others can profit at our expense.

Arm yourselves with knowledge. Have conversations with other drivers, not to find your differences but to find the things you have in common. We have the opportunity to make our future better if we will step up and be heard. We can ill afford to let a few others speak for us without our input.



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