Who actually benefits from the Jones Act, the 1920 law stipulating that all maritime commerce between U.S. ports has to take place on ships that are built, owned and crewed by Americans?
The American Maritime Partnership, a lobbying group, will tell you the act supports nearly half a million jobs and each year generates $10 billion in taxes and $46 billion in additional U.S. output. Even if you take these statistics at face value, they fail to allow for the jobs, taxes and output lost in the rest of the economy.
What about the act’s stated purpose — which, together with other laws such as the 1936 Merchant Marine Act, is to ensure the U.S. retains a robust merchant marine and advanced maritime sector for domestic commerce and times of war or crisis? That’s no more persuasive, once you note the steady decline of shipbuilding and the U.S. oceangoing fleet through the past five decades.
In truth, the Jones Act survives because narrow commercial interests want it to. A protectionist thicket has long surrounded U.S. commercial shipping and shipbuilding. It gradually has hardened into a political wall impervious to economic reason. President Donald Trump spoke the truth in September: When asked whether he would waive the act for Puerto Rico, he said the U.S. has “a lot of people that work in the shipping industry that don’t want the Jones Act lifted.”
Those people are backed by a flotilla of senators and representatives who are failing to put the broader interests of voters first. They include the 60-odd members of the Congressional Shipbuilding Caucus, one of the bigger and more active of such legislative groups. Filling their coffers and bending their ears are the American Maritime Partnership; the Shipbuilders Council of America; other like-minded industry groups; and scores of individual shipbuilders, shipping lines and labor unions. In 2016, donors associated with sea transport coughed up more than $10 million in campaign contributions — the most since at least 1990 — and spent almost $25 million on lobbying.
The arithmetic of special-interest pleading is interesting. Consider New Jersey Sen. Cory Booker, whose $31,000 from sea transport groups put him in the top 20 of Senate recipients in 2014. That winter, the Democrat blasted state officials for failing to lay in salt for clearing roads. Without the Jones Act, an available foreign-flag ship could have transported the salt from Maine for $500,000; using slower U.S. barges caused delay and cost the state $1.2 million.
Nothing seems more perverse, though, than the vocal support given to the Jones Act by the congressional delegations of Alaska and Hawaii. Consumers in states held hostage to relatively expensive U.S. seaborne commerce are the act’s biggest losers. Maritime industries drive neither economy: In Alaska and Hawaii, shipbuilding and repair provided well under 0.5 percent of employment, labor income and output in 2013. Nonetheless, the Jones Act lobby has been a reliable horn of campaign plenty: In 2016, Hawaii’s senators and two representatives ranked in the top 20 recipients of sea-transport campaign contributions, as did Alaska’s two senators.
Those dollars help to get Jones Act-friendly candidates re-elected. They do less than nothing for the voters of those states and the country as a whole.
— Bloomberg View
