The Merchant Marine Act of 1920, better known as the Jones Act, is a classic example of a law that has remained on the books for decades, only attracting attention when it creates problems too big to ignore. This clearly happened this August, when it delayed shipments of aid to Puerto Rico following Hurricane Maria.
The hurricane destroyed 80 percent of the islands crop value and left the majority of its population without access to clean water or electricity. The always incompetent Trump administration initially refused to waive the Jones Act when the Hurricane hit but caved to common sense a few days later. The Jones Act requires goods moved from one US port to another be transported on an American made ship with American owners and crew members. This competition-killing requirement has created a US shipping industry that is among the world’s most expensive and least competitive. Restricting aid transport to this highly inefficient shipping industry essentially strangled Puerto Rico as foreign ships could have delivered more supplies, more quickly.
The harm done by the Jones Act is not, however, merely restricted to times of crisis. Due to its being an island, Puerto Rico is shut off from shipping via trains and trucks, making it more reliant on ships to receive goods from the American mainland than the contiguous states. A 2014 study for the Congressional Research Service estimates that it costs roughly twice as much to operate a Jones Act compliant ship than an international one. Additionally, it Jones Act compliant ships cost four times as much to build according to a study from Drewry Maritime Research.
These extra expenses get passed on to consumers and have resulted in US made goods being twice as expensive in Puerto Rico than they are in the Jones-exempt U.S. Virgin Islands. It also has contributed to the cost of living being 13 percent higher in Puerto Rico and food being twice as expensive as it is on the U.S. mainland. This has only added to the economic hardship and suffering Puerto Ricans have been plagued with over the last few decades.
The damage done however is not limited to Puerto Rico. Businessmen throughout the country have switched to other forms of transportation when an international ship would have been more practical. Others have found creative workarounds, such as shipping goods through Canada or the Caribbean on the way to their destination in another part of the U.S. All of this raises the costs paid by consumers throughout the economy. National Public Radio even once interviewed a Hawaiian farmer who chose to fly his cattle to the mainland by plane rather than pay the excess cost of using a Jones Act compliant ship.
Despite the widespread extra costs and potential for disaster in emergency situations, the only people who benefit from the Jones Act are the small portion of the population involved in commercial sailing and shipbuilding. Its primary beneficiaries are a small elite of American shipyard owners. The rest of us are forced to pay more to keep their noncompetitive businesses afloat. It is time to repeal the Jones Act and stop penalizing the general population for the benefit of a handful of shipbuilders. Indeed, we should repeal all such protectionist measures, as a free society does not need a state restricting our choices of how to buy, sell, and share.
