The New York ferry disaster proves the Jones Act is critical to the United States marine industry
Recently a number of self-interested news, business, and insurance-related entities have ramped up a wholesale attack on the Jones Act, a US law that protects the US shipping industry and marime workforce from unsafe, dangerous, and sloppy overseas competition. To make matters worse, they've used Hurricane Sandy as a justification for their renewed attack on the U.S. shipping and maritime industry.
For example, Bloomberg, often a mouthpiece for the insurance and investment communities, issued a scathing editorial calling for the Jones Act to be repealed in part. The Bloomberg article asked that the U.S. "abandon the requirement that ships used in domestic trade be built in the U.S." The Bloomberg editorial also called for the U.S. to "allow foreign shippers to compete in U.S. coastal waters." Both ideas are not only bad and unsupported by any actual evidence, but they are potentially dangerous to the health and safety of the American people. More on that in a bit.
First, a little history on the Jones Act. The Jones Act was formally enacted in 1920 and regulates maritime commerce in U.S. waters between U.S. ports. It requires that all goods transported by water between U.S. ports be carried on U.S. flagged ships, constructed in the U.S., owned by U.S. citizens and crewed by U.S. mariners. It also protects the health and safety of those U.S. crews.
The purpose of the Jones Act was to prevent foreign shipping companies and industries from using cheap or indentured labor to undercut the U.S. shipping industry and circumvent basic human health and safety laws. Historically, poor countries had used indentured labor and unskilled crews to man their ships, which were built with subpar safety equipment and run with great risk to health and safety.
Moreover, many foreign countries have protectionist regulations that make competition by U.S. marine companies next to impossible. What's good for the goose is good for the gander, so to speak.
Why the Jones Act is strategically, economically, and militarily important to the U.S. national and economic security
Let's play a little though experiment out here. Let's assume we repeal the Jones Act today. What would be the consequences? Here are some consequences, in no particular order:
First, the U.S. merchant marine fleet would disappear. Thousands of marine jobs would no longer exist because they would be filled by foreign workers willing to work for low wages.
Second, the shoreside jobs that support our merchant mariners would disappear (at worst) or take a severe financial hit (at best).
Third, the safety of both U.S. ports and the U.S. public generally could be compromised. It is difficult enough as it is to monitor the comings and goings of U.S. Jones Act compliant fleets--imagine how difficult it would be to monitor fleets of foreign flagged vessels with international crews. How do you ensure the ship is seaworthy? How do you ensure that that cargo is secure? How do you screen foreign seaman to make sure they have no ill intent?
Fourth, the U.S. shipbuilding industry would disappear. Because U.S. shipbuilders build vessels to higher standards and actually have incentives to keep workers and crew safe, it is inevitable that costs are higher. Foreign shipbuilders don't have the same incentives and can use cheap labor to build cheap ships. It's simply not a level playing field. Do we really want dangerous ships with untrained crews plying U.S. waters?
Fifth, with the loss of the U.S. shipbuilding industry we lose a precious resource for helping us protect ourselves militarily. We lose expertise is shipbuilding, navigation, and all the other areas of interest that help us keep our ports and shores safe.
Why the New York ferry accident shows us the importance of preserving the Jones Act
The New York ferry accident was a catastrophe. Fortunately, it was a relatively rare event for the U.S. marine industry, mainly because the U.S. marine industry has exacting safety and navigational standards it must follow.
Accidents like the New York ferry accident would inevitably increase dramatically if we open our waterways to poorly constructed ships manned by cheap labor with little or no incentive to avoid major accidents.
Even Ronald Reagan--no friend to organized labor--recognized almost 40 years ago how important the Jones Act was for American seafaring strength and jobs, when he said the following:
"I can assure you that a Reagan adminstration will not support legislation that would jeapordize this long-standing policy . . . embodied in the Jones Act . . .or the jobs dependent on it." -- President Ronald Reagan, 1980.
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