Submitted by Atlas Indicators Investment Advisors on August 23rd, 2017
This is a copy of an email sent to clients in June 2017 before the notes were being published here. I am posting it here now since I refer to it in the note for August 25, 2017. ~Christopher
Heavy truck and tractor-trailer drivers are a dedicated group. Their work helps move goods across the nation via intercity routes which often span several states. In return, they generally receive a median annual wage ($41,340) which is greater than that of all occupations taken together ($37,040) according to the Bureau of Labor Statistics. While many are independent contractors responsible for funding their own retirement, others are provided a pension as part of their compensation.
Two alarming trends threaten the financial wellbeing of pension-covered truckers. First technology is driving out the need for human operators. Recently, a self-driving semi-truck full of Budweiser was sent from Fort Collins, through Denver and on to Pikes Peak in southern Colorado. Its "supervisor" spent most of the trip in the sleeper berth. If drivers become obsolete, companies will no longer make new pension contributions. The pension plan covering roughly 400,000 truck drivers (the Central States fund) is struggling; according to the Economist, it is virtually broke already.
Pensions perform best when the money flowing into the scheme is greater than outflows. When this relationship reverses, trouble is brewing. Fortunately, our government provides insurance for these instances. The Pension Benefit Guaranty Corporation (PBGC), according to their website, states it is now responsible for current and future pensions of roughly 1.5 million Americans because various pension plans have either gone broke or are receiving financial assistance. Unfortunately, the PBGC itself is woefully underfunded and may not be able to pay potential claims coming from the Central States fund, among others. What to do?
Atlas has a solutions: pension paying robots. Upon first reading such a statement, this might seem outlandish, but it could provide an important bridge for those Americans being squeezed by both automation and poor pension management. The monies received can be used to pay the plan's current obligations until the last human worker expires. Even with this additional expense, the labor cost savings will still be a windfall for producers and consumers alike. What about the robots? When they retire, give them a can of 30 weight and send them on their way.
