Jones Act

No matter where you are in the world, you’re going to find laws that are controversial and, perhaps, downright unjustifiable. This is simply an unavoidable part of existing in the world today and, although societal progress has led to the elimination of numerous outdated and contentious regulations, there are many that still remain. Of course, this certainly doesn’t imply that as a civilized society we’ve somehow plateaued and are no longer progressing in the way we legislate, but rather there are just some legal codes that require careful thought before changing or dismissing.

The Jones Act of the United States fits this description as it has been hotly debated for many years. If you aren’t aware of what this particular law entails, or why it has been a source of debate, then this article is definitely something you should read. I say this because the Jones Act creates a rippling effect worldwide that affects many peoples’ lives, perhaps even your own. In this article, you’ll find out what this law entails and the various positive and negative repercussions it has on the people, communities, and countries it affects.

A good place to start dissecting the Jones Act is to first establish a firm understanding of what this law actually does. In order to do accomplish this, you’ll obviously need to know a little bit about its history. The Jones Act, which is also known as the Maritime Law and the Merchant Marine Act of 1920, is a United States legal code that is designed to help aid the government to regulate maritime commerce and maritime administration in the navigable waters of U.S. territory. It does this in a few ways, but the part that continues to be debated to this day is the law explicitly stating that all goods being shipped between any seaports overseen by the United States must be done so only by ships built in America. That’s not all, as the act goes on to say that not only do the ships transporting goods between American ports have to be made in America, they must also be owned and operated by American citizens or permanent residents of the country.

The law was partially created in order to give the U.S. economy a much-needed boost in the wake of the first world war. It also provided the sailors on these ships much-needed liberties, including the ability to sue the captain, crew or company operating the ship for any damages incurred during voyages. There are certainly more reasons and rationales behind what motivated the government lawmakers, as well as private citizens and lobbyists who rallied for this law’s creation, but let’s leave the past in the past. That’s not to say that this part of the Jones Act’s history isn’t important; it just doesn’t have much of an impact on how people argue for or against the law presently.

For some, the language of the law makes sense because it allows for United States-based companies to have a monopoly over whatever goods are going to and from American ports. Also, back in 1920, the United States was not the global economic power it is today and the Jones Act was a rather inventive way to cut all other countries out of its growing shipping industry. The tricky part about the Jones Act, however, is that, even though it helps some people, it hurts, perhaps, just as many—if not more—in the process. As mentioned above, the act does help sailors recoup damages incurred during voyages and it also is beneficial for American maritime businesses and the U.S. economy as a whole. By excluding foreign ships from moving goods between U.S. ports all of the profits from this industry stays in America. If this weren’t the case the United States wouldn’t be able to compete with other countries because they simply don’t have as many ships, ship manufacturers or maritime workers as most other countries.

The complexity of the Jones Act comes into play when you begin to break down how it drastically impairs certain parts of the United States shipping industry. Specifically states and territories outside of the continental United States like Alaska, Hawaii, and Puerto Rico which rely on the shipping industry for the majority of their goods. Since the Jones Act only allows these places a limited number of options when it comes to who can bring them what they need, the prices of everyday items are much more than what you see on the mainland. It’s basic supply and demand economics with the supply of Jones Act ships being much smaller than what the demand for goods is in those locations. The small number of ships that can transport to Alaska, Hawaii, and Puerto Rico allows for very little competition to supply the demand for goods. This means they can charge higher prices because there is nobody else offering cheaper more competitive rates. These locations, as well as the mainland states also see delayed shipments and increased costs simply because there aren’t enough Jones Act ships to meet the demand. Puerto Rico is, perhaps, the area who suffers most under the Jones Act with shipping costs being twice as much as what they would be if allowed to be brought in by foreign ships from foreign ports.

As you can see, the Jones Act is unquestionably a double-edged sword that many people want to see changed or eradicated altogether. Unfortunately, if the law was repealed many people would lose jobs, the United States shipping industry would get taken over by foreign businesses, and the American economy would be drastically affected. There have been instances where the Jones Act has been temporarily suspended, but these only occur after a natural disaster when the need for goods is a matter of life and death.

There have been many ideas on how to improve and change this law throughout the years since its conception, but they often further contribute to the problem instead of solving it. In fact, a supreme court ruling in 1995 specifies that anyone working on a Jones Act ship for less than 30% of their annual workload is not considered a “Jones Act seaman,” which prohibits them from many of the benefits they would otherwise have got such as compensation for medical expenses and lost wages for a work-related injury or other negligence by the employer. This 30% rule is also attached to anyone working on a “vessel” which is defined as anything capable of being used for transportation over water, including surfboards and kayaks. This hurts a lot of recreational business who now have to incorporate this rule into their business plan which undoubtedly complicates everything.