Jones Act costs Hawaii families almost $1,800 extra every year, new independent study shows

The new research shows the Jones Act overall costs Hawaii $1.2 billion annually, including 9,100 jobs and $148 million in taxes

News Release from Grassroot Institute, July 29, 2020

HONOLULU, July 29, 2020 >> The protectionist federal maritime law known as the Jones Act costs the average Hawaii family almost $1,800 a year, according to a groundbreaking independent new study produced by the Grassroot Institute of Hawaii.

The 50-page, extensively documented report, “Quantifying the cost of the Jones Act to Hawaii,” was unveiled today during a webinar featuring two prominent Jones Act reformers in Congress: U.S. Sen. Mike Lee (R-UT) and U.S. Rep. Ed Case (D-HI). 

The new research shows that the Jones Act overall costs Hawaii $1.2 billion annually, including 9,100 fewer jobs and $148 million in unrealized tax revenues.

The Jones Act is a 1920 law that requires all goods carried between U.S. ports be on ships that are U.S. flagged, built and mostly owned and crewed by Americans. 

Discussing the U.S.-build requirement of the act specifically, the study says
removing it would save the state $531.7 million a year, add 3,860 jobs and
generate $30.8 million in state and local tax revenues.

The Grassroot Institute’s new study was conducted by the nationally recognized John Dunham & Associates, based in New York, which conducted a similar study concerning Puerto Rico in early 2019.

Keli‘i Akina, institute president and CEO, said, “It is well known that the 100-year-old Jones Act adds to Hawaii’s already high cost of living, but what had been lacking, until now were figures of just how much. Now we have the hard evidence we’ve long needed that proves the Jones Act harms Hawaii residents more than it helps them. We hope this will motivate policymakers to look at reforming the act — specifically the build requirement — so we can help make Hawaii more affordable for its already-struggling residents.”

Rep. Case, who has introduced three measures intended to fix Jones Act inequities, said, “From my perspective, what this study does is, once and for all, lend credibility to the basic underlying conclusion that the Jones Act does, in fact, result in major negative impacts to Hawaii in particular."

Speaking to the $1.2 billion cost figure, Case said, “That’s a huge cost to our economy. We don’t have a big economy, so you suck $1.2 billion out of the economy that doesn't have to come out of that economy, that’s going to hurt people.”

Sen. Lee, who last year proposed a bill that would make it easier for Americans to obtain Jones Act waivers, said the Grassroot Institute’s study “brings home something that goes unaddressed in Washington, and that is the problem of concentrated benefits and dispersed costs.

"When you’ve got concentrated benefits and dispersed costs," he said, "it creates a real weird lobbying problem where you basically have the rich taking from the poor. And [the study’s] data bears that out clearly.”

Akina said, “I strongly believe this new report will make a difference in future discussions about the need to update the Jones Act for the 21st century.”

The report can be downloaded from the institute's Jones Act website at www.grassrootinstitute.org/jonesact. 

It also is available for purchase from Amazon.com.

 # # #
The Grassroot Institute of Hawaii is an independent 501(c)(3) nonprofit research and educational institution that seeks, in the spirit of “E hana kakou!” (Let’s work together!), to educate people about the value of individual liberty, economic freedom and accountable government.