Hawaii’s population exodus blamed partly on Jones Act

from Grassroot Institute of Hawaii, July 25, 2024

A new video produced by the popular Economics Explained website gives the Jones Act a well-deserved whupping for contributing to the exodus of lower-income residents from Hawaii.

The Jones Act is the 104-year-old federal maritime law that restricts the shipping of goods between U.S. ports to only ships that are U.S built and flagged, and mostly owned and crewed by Americans.

The law causes higher prices throughout the nation, especially in states and territories such as Hawaii, Alaska, Puerto Rico and Guam, but persists thanks to the powerful and well-heeled special interests.

The Economics Explained video is titled “Why Hawaii became a State for The Rich Only,” and can be seen on YouTube here. Since being posted almost two weeks ago, it has been viewed more than 330,000 times.

Last week, the Grassroot Institute excerpted the portion of the video that focuses solely on the Jones Act and posted that online too, under the title “The role of the Jones Act in squeezing Hawaii residents out of Hawaii,” which you can see by clicking on the video above.

Grabow's letter to the PDN editor …

A columnist for Guam’s Pacific Daily News questioned this week whether repealing the Jones Act would lower the cost of consumer goods on Guam. Grassroot Scholar Colin Grabow responded in a letter to the editor that “the better question is why repealing the law wouldn’t.”

Grabow, also a Cato Institute trade policy analyst and one of the nation’s leading Jones Act critics, wrote that “the cost of shipping necessarily helps determine the prices a store must charge, and there is little doubt that the Jones Act drives shipping costs higher.”

He noted that U.S.-built ships like those used by Matson in its Guam service currently cost at least four times as much to build as similar ships constructed overseas. In addition, Jones Act-compliant vessels are at least three times more expensive to operate than internationally flagged ships.

"Add reduced competition to this mix," he wrote, "and expensive shipping is inevitable — with Guam consumers paying the price.”

Grabow also addressed the columnist’s concern about using foreign shipping to supply Guam’s needs, pointing out that “relying on such vessels would hardly break new ground.”

After all, he said, “Guam already welcomes scores of foreign ships of various types each year that reliably transport goods from neighboring countries. Repealing the Jones Act would simply enable these ships to transport goods from the U.S. as well.”

Grabow concluded that “the only folks that should have cause for concern over the Jones Act’s demise are the ocean carriers such as Matson who profit from the status quo. There’s a good reason they lobby heavily to keep this law in place: They are terrified of the competition and lower shipping rates the Jones Act’s repeal would bring.”