Truck drivers and Texas sharpshooters

By Cho Hee-kyoung

Nationwide, thousands of cargo truckers have been on a strike since late November in a dispute over the price of freight. The government has labelled the strike illegal and claimed that the truckers, who are already earning a high income, are holding the entire economy hostage to enrich themselves further.

Supporters of the truckers' collective action in contrast accuse the government of labor oppression, ignoring the harsh work conditions and financial hardships of the truckers, which have been aggravated by rising costs and interest rates. So who is right?

At the heart of the issue is a minimum freight rate system due to expire at the end of this year. The cargo transport industry had been perennially marred by a high rate of road accidents caused by the overloading of trucks and speeding by truckers. The cause of the problem was attributed to the cutthroat, race-to-the-bottom price competition by truckers trying to win jobs, which endangered the lives of both themselves and other road users. This is one instance where leaving the competition to the free market resulted in the negative externality of rising injuries and fatalities affecting all road users.

The solution reached under the previous administration was the Safe Freight Fare System implemented through an amendment to the Cargo Vehicle Transport Industry Law putting a floor under the freight fare paid to the truckers. Instead of leaving the freight fare to the market, which risked the safety of all road users, a committee made up of all relevant stakeholders, including the truckers and client companies, would set the minimum freight fare, thereby preventing safety-endangering price competition.

However, the application of the minimum fare was to be limited initially to only cement and container transport because of the difficulty in determining the appropriate rates for different cargoes. The cargo owners naturally protested against the increased cost to them, and in the end, the new minimum fare system became subject to a sunset clause expiring at the end of 2022.

The truckers are striking to remove the sunset clause in order to make the minimum fare system permanent and also to widen its application to hazardous cargo, grains and feeds, car carriers, steel and parcel deliveries.

The government's response to the striking truckers has been uncompromising. President Yoon Suk-yeol has called the strike "a collective license for violence" and has vowed not to concede to such illegal action and that he would establish the "rule of law" for the unions.

Transport Minister Won Hee-ryong stated that truckers for steel and hazardous cargo already earn a high income of over 5 million won to 6 million won per month, which is much higher than the average income of workers, and that there is no evidence that the minimum rate system has improved road safety in any significant way. Truckers, on the other hand, claim that the problems of overloading, long hours and speeding have significantly decreased contributing to a better overall level of road safety.

Unfortunately, both sides are using bad data and making fallacious arguments. The government is engaged in what is known as the Texas sharpshooter fallacy, drawing a target around what it has shot at rather than taking true aim at the real target. The income figure cited by the government does not factor in all the relevant costs incurred by the truckers, making their income seem higher than it actually is.

A more accurate calculation reveals that a trucker's hourly wage is 25 percent lower than that of an average worker. The safety figures cited by the transport union are sketchy based on self-reporting and a very small sample of data and therefore not reliable enough to make an accurate assessment of the impact of the minimum rate system on road safety. Further study is needed.

In an ideal world, instead of intransigence on both sides, there would be communication and compromise. However, the government has unilaterally announced an extension of the sunset clause by three years and flatly refused the other demands by the truckers. This is in stark contrast to when the construction industry raised its prices earlier in the year due to the inflation in the prices of raw materials which the government accepted with alacrity.

So now, both parties are pulling out all the stops, entrenching their positions. The truckers have shaved their heads and are doubling down on their demands. The government has issued a mandatory return to work order which may or may not be legal or constitutional given the status of many truckers as independent contractors and not employees.

There is no denying that the economy is in dire straits. The longer the truckers strike, the worse it will get. What is needed is not taking a hardline stance but showing a little more empathy and leadership and making a genuine effort at dialogue, understanding and cooperation.

Cho Hee-kyoung (hongikmail@gmail.com) is a professor at Hongik University College of Law.