The Jones Act, Section 27 the Merchant Marine Act of 1920, requires cargo ships traveling between U.S. ports to be built in the U.S., owned by U.S. companies, employing only U.S. workers.
That means a ship from Asia can’t stop in Hawaii, drop off food and other products, pick up other cargo and continue to the West Coast. As a result goods are generally shipped to the mainland and then from the mainland to Hawaii. That’s one reason why things are so much more expensive in Hawaii.
This isn’t just a problem for Hawaii. It’s also a big deal for Puerto Rico, where per capita GDP is half the U.S. average. We make goods more expensive to buy for people with the lowest incomes. And we do it on purpose. It’s also a problem for Alaska as well as places like Guam.
The Jones Act was waived in the aftermath of Hurricane Irma, Harvey, and Maria in 2017, because economics couldn’t take the double whammy of the Jones Act and a destructive hurricane.
But Secretary of Transportation designate Pete Buttigieg knows that the political voices of unions, and support from West Coast Senators whose constituents benefit, is more important to him than poor people who suffer under the law. Senator Maria Cantwell from Washington even put out a press release applauding herself for getting this support for her state.
— Transp. Trades Dept. (@TTDAFLCIO) January 21, 2021
Since the Jones Act drives up shipping costs, operators use older and less costly ships. Replacing ships only with those built in the U.S. is expensive, so companies avoid doing it. And as a result, maintenance aside, these ships aren’t equipped with the latest technology. So the Jones Act makes shipping less safe.
Proponents argue that the Jones Act is a necessary subsidy for U.S. ship manufacturers, so that those companies are able to produce ships for the military. But military ship producers have sold no more than 5% of heir ships as Jones Act merchant vessels so this doesn’t hold up. The late Senator John McCain, no slouch in his support for the military, proposed repealing the Jones Act.
They further argue that ‘we don’t want foreign ships traveling close to our waterways’ but we get that all the time, because foreign ships travel to California, Washington State, Florida, Texas, etc. all the time – the Jones Act just prevents them from stopping in Hawaii or Puerto Rico first.
It turns out that when it comes to the effect of transportation costs on the poor, Buttigieg prefers ‘thoughts and prayers’ over action.
My thoughts are with our fellow citizens in Puerto Rico in the wake of last night’s earthquakes. As they rise to overcome another tragedy, Puerto Ricans must be assured that this administration will act quickly to provide any federal support needed.
— Pete Buttigieg (@PeteButtigieg) January 7, 2020
The truth is that U.S. manufacturers and labor look at it as a subsidy and fight for it, and their voices ae heard far more loudly than residents in places like Puerto Rico who are made poorer by it.