Matson pays the highest wages in Hawaii

by Michael Hansen, Hawaii Shippers Council, September 9, 2019

Money Magazine published the news article, “This Map Shows the Highest-Paying Company in Every State Right Now,” on August 13, 2019, identifying Matson Navigation Company, Inc., as the highest-paying company in the State of Hawaii.

Their entry for the State of Hawaii is:

• Hawaii Company: Matson
• Median Salary: $109,743
• Industry: Financial

Matson is not a financial company as Money Magazine stated its industry classification. Rather, it’s a transportation company largely engaged in ocean container shipping.

Money Magazine described the source of their data and how it was compiled:

In 2018, the Securities and Exchange Commission mandated that public companies disclose pay ratios between CEOs and their employees — that is, how much money a CEO is pocketing for themselves compared to paying their employees.

The AFL-CIO built a public database using these numbers, with the ability to sort salaries by state and industry.

We used this data to examine median pay by state for companies in the Russell 3,000, an index of the 3,000 largest publicly traded companies by stock market value.

Median salary — the midpoint on a company’s payroll — can be a better indicator of how well companies pay their employees since the average salary is usually inflated by high pay among top executives.

The relatively high median compensation level is probably related to Matson’s high degree of unionization. In particular, their substantial number of waterfront employees who are members of the International Longshore and Warehouse Union (ILWU) including stevedores, wharf clerks, crane operators and office clerical staff.

The ILWU has a very strong negotiating position with shipping and terminal owners as they represent virtually all the longshore and related workers on the U.S. Pacific Coast, Alaska and Hawaii.

The domestic Alaska, Guam and Hawaii trades make up a small portion of the cargo handled across these jurisdictions. The vast majority of the cargo handled by the ILWU is foreign cargo imported to and exported from the U.S. West Coast.

It’s the foreign trade that sets the ILWU wage levels and work rules.

The number of seafarers employed on the ten (10) active U.S. flag Matson containerships operating in the Alaska, China, Guam and Marshall Islands trades is relatively small in comparison to those employees working shoreside.

Seafarers do not belong to the ILWU. Rather they belong to several different U.S. flag shipboard unions. Matson’s shipboard unions include: the International Organization of Masters Mates and Pilots (MM&P); Marine Engineers Beneficial Association (MEBA); Sailor’s Union of the Pacific (SUP); and, Pacific Coast Marine Firemen, Oilers, Watertenders and Wipers Association (MFOWW). Other U.S. flag shipping companies employ seafarers represented by other shipboard unions.

U.S. maritime cabotage commonly known as the Jones Act regulates employment on board ship and protects shipyard workers constructing new vessels through its domestic build requirement.

However, because the Jones Act protects incumbent maritime companies from new entrant competition and severely limit contestability, there is little check on compensation paid to longshore and harbor workers employed in the domestic noncontiguous trades.