Thursday, April 12, 2007

Grays Harbor Logging Truckers Strike

It looks like margins on logging in Washington are getting small. A large fraction of logging truckers in Grays Harbor county have been striking for two weeks now because of low wages and hauling rates (more here, here and here). The truckers, who mainly truck for Weyerhaeuser, say that rates have not changed since 1984 (I assume they mean real wages, otherwise real wages have fallen by half). The truckers have started to lobby the state legislature for regulation and some sort of wage floor.

I suspect some of this is exaggeration, but I am still surprised that the long term labor supply market is so inelastic. This situation would make more sense if there had been a recent fall in wages or a spike in costs, because labor supply is usually much more inelastic in the short run than in the long run, but this does not seem to be the case. I am disappointed that the truckers are asking for minimum wage regulations. I hope the legislature does not give in to the pressure, especially because I don't think regulation will get the truckers what they want. First, Weyerhaeuser seems happy with not hiring them. Second, minimum wage regulations typically increase unemployment in the medium to long term instead of increasing worker welfare. This second point means some of this must be Weyerhaeuser's fault; instead of accepting higher wages and choosing to log only more profitable stands, the company has chosen to bear a strike and a lot of bad press. I am not completely sure what is going on in this situation, but I strongly suspect this problem has arisen because one or more parties are being more stubborn than is rational.

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