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Industry group: 30% increase in maritime jobs attributed to Jones Act

By on March 4, 2019

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SAN JUAN – The Transportation Institute (TI), a maritime association that advocates for the existing U.S. maritime policy, said Monday that a 30% increase in seafaring jobs was possible by the Jones Act, according to a study it commissioned.

The law requires that the transportation of merchandise between two U.S. points is carried out by U.S.-built, -owned and -crewed vessels. Supported by broad bipartisan majorities in Congress and top U.S. national security officials, the law promotes the maintenance of the nation’s vitally important maritime industrial base, ensuring that American jobs are not shipped overseas and that defense capabilities and readiness not outsourced to foreign nations.

“Thanks to the law, the industry now employs nearly 650,0000 Americans across all 50 states and contributes $154 billion to the nation’s economic growth annually,” reads the release issued by Washington-based TI.

A new study by PricewaterhouseCoopers (PwC) for the institute “affirms the impressive economic benefits of the domestic maritime industry,” the nonprofit said, listing that the report found that “the Jones Act-enabled maritime industry:

  • Contributes more than $154 billion in total economic output annually
  • Creates $41 billion in labor income for American workers each year
  • Adds $72 billion annually to the value of U.S. economic output
  • Sustains nearly 650,000 American jobs, with one shipyard job creating four jobs elsewhere in the economy”

TI Chairman and President James L. Henry said: “This new study shows the spectacular impact that our industry has on our nation’s overall well-being, especially by providing livelihoods to 650,000 hard-working Americans, thousands of whom proudly served in our military. We simply would not be as strong as we are without the veteran community, and it’s a source of great pride that our growth is benefitting them and their families. Needless to say, the report underscores just how indispensable the Jones Act continues to be for the security and prosperity of our entire country.”

The institute said that about a quarter of U.S. freight is handled by the “Jones Act fleet” of some 40,000 vessels the “move nearly one billion tons of cargo annually” along U.S. waterways, the Great Lakes and to Hawaii, Alaska, Puerto Rico and other territories.

The Jones Act, the advocate group reiterated, is “the quintessential ‘Buy American, Hire American’ law, one that puts American workers first and is critically important for guaranteeing our national security and maintaining our defense industrial base,” in part because many of its member company vessels are contracted to the U.S. military.

Detractors of the Jones Act say it has contributed to the decline of U.S. shipbuilding and impedes having a ready reserve of merchant mariners.

A policy analysis paper issued in June by the Cato Institute, a libertarian Washington-based think tank, calls TI’s assertion that the law “guarantees a professional and ready force of merchant mariners who are vital to America’s ability to supply our military forces” and provides “manpower that the military can call upon during deployments” dubious, citing a union official’s congressional testimony that “the pool of licensed and unlicensed mariners has shrunk to a critical level” and that “the military will no longer be able to rely on the all-volunteer U.S. Merchant Marine as our nation’s fourth arm of defense.”

The New York City Bar Association, meanwhile is urging Congress to exempt the Jones Act for Puerto Rico, saying in May that studies indicate it costs the island’s economy hundreds of millions of dollars every year because it imports about 85% of its food, chemicals, oil, electrical appliances, machinery and equipment, transport vehicles, and plastics.

A 2012 report from the Federal Reserve Bank of New York found that the shipping cost for a 20-foot container from the states to Puerto Rico cost twice as much as the same container to the Dominican Republic.

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