MYTH: The Jones Act protects American jobs

From Grassroot Institute

Jones Act supporters frequently say the law is responsible for about 650,000 U.S. jobs.1 Again, they point to the private PricewaterhouseCoopers study, which estimates that about 95,470 U.S. jobs are “directly attributable to the Jones Act shipping industry.”2

The 650,000 estimate is the result of adding 552,750 “indirect or induced” jobs and rounding up, conflating all “indirect and induced jobs in other sectors of the economy” with jobs directly related to the Jones Act.3 Without access to the full study, it is impossible for anyone to review how any of these numbers were calculated. 

As for verifiable figures, we know that 300 U.S. shipyards closed between 1983 and 2013,4 with only four shipyards remaining as of July 2021 that build large oceangoing ships for the commercial market.5

Of those, only one is working on large vessels for the Jones Act market — two to be precise — and they are behind schedule.6

This belies the comments by the federal government’s new secretary of transportation, Pete Buttigieg, that, “The Jones Act ensures that we don’t lose our domestic ship building capability.”7

Ironically, three of those four shipyards are not even American owned. The Philly Shipyard in Philadelphia is owned by Aker Philadelphia Shipyard, a subsidiary of Norway’s Aker ASA. The VT Halter shipyard in Pascagoula, Mississippi, is owned by ST Engineering, the largest shareholder of which is the government of Singapore. And Keppel AmFELS, located in Brownsville, Texas, is a subsidiary of the Singapore-based Keppel Corp.8 Additionally, many of the Philly Shipyard ships are designed in South Korea, while VT Halter has worked with a shipyard in Croatia to provide its ship designs.9

The fourth shipyard, American-owned General Dynamics NASSCO, based in San Diego, reports on its website that for its commercial work, it “is partnered with Daewoo Ship Engineering Co. to provide its customers with state-of-the-art ship design and shipbuilding technologies.”10

As the output of these four shipyards has plunged, so has shipbuilding employment — by nearly in half, from 180,000 in 1980 to 94,000 in 2018.11 The number of Jones Act ships has dropped from 193 in 2000 to 96 as of February 2021.12 With a generous estimate of two 25-member crews for each vessel, that’s a loss of 4,800 seafaring jobs.13

Clearly, it’s a myth that the Jones Act protects or even helps create American jobs.

Just to be clear, dockworkers, stevedores, truckers and other “indirect and induced” maritime-related workers do not owe their jobs to the Jones Act. Maritime cargo transport would exist with or without the Jones Act, which serves only to limit competition. If more foreign shipping was allowed in, there would be more maritime-related workers needed.

Moreover, if Jones Act supporters really want to pad their numbers with “indirect” jobs, they should be consistent and account for employment that has disappeared because of the high cost of U.S. shipping, such as, sugar plantation jobs in Hawaii14 or pulp mill jobs in Alaska.15

Link: Footnotes