The Jones Act Is Sinking The Economies Of Alaska And Hawaii

It’s a daily assault on businesses struggling to stay competitive and consumers forced to pay exorbitant prices.

The Jones Act is a demonstrably bad policy, strangling the economy, driving up costs for ordinary citizens and crippling local businesses in Alaska and Hawaii. Why, then, does it continue to exist?

Because protecting a few powerful players from competition moves legislators more than economic freedom. And because lawsuits challenging the Act have failed to seize upon an important piece of the Constitution.

The Jones Act, passed in 1920, requires that goods transported between U.S. ports be carried on ships that are U.S.-built, U.S.-owned, and U.S.-crewed. While it was pitched as an effort to ensure the viability of America’s maritime fleet after World War I, that’s only half of the story.

From its inception, the law had the Alaskan and Hawaiian shipping industries in its sights. The act’s namesake, Wesley Jones, was the senior senator from Washington and was concerned with protecting his state’s shipbuilding industry. Disadvantaging the American “territories” was a feature of the law, not a bug.

Because nearly all goods arrive by sea, the Jones Act is particularly harsh for the residents and businesses of Hawaii and Alaska. In Hawaii, mandating U.S. ships for all inter- and intra-state shipping results in higher costs for everything from hotel supplies to daily necessities like food and beverages.

These costs are passed on to residents and tourists, making Hawaii a more expensive place to live and a more expensive destination for visitors.

The Jones Act, according to the author, is costing the Alaska and Hawaii economies billion. Pictured is a Matson shipping vessel docking in Honolulu Harbor, the state’s largest commercial port. (Cory Lum/Civil Beat/2018)

The same story is true for people who live in or even frequent the so-called Last Frontier of Alaska.

The Jones Act restricts the vessels that can transport fish from Alaskan waters to U.S. markets, meaning Alaskans must use more expensive American ships even when more affordable and efficient foreign-built vessels are available. This reduces profit margins for Alaskan fishermen and makes their products less competitive in the global market.

‘Severe Economic Damage’

The numbers are telling: the Jones Act cost the Alaska and Hawaii economies billions. From food and construction materials to fuel and essential goods, the Jones Act inflates prices on nearly every product that enters the two states.

This isn’t just an economic inconvenience; it’s a daily assault on businesses struggling to stay competitive and consumers forced to pay exorbitant prices for necessities.

Given its severe economic damage, it should be no surprise that various legal challenges have been brought against the Jones Act over the past hundred years. While the Act has survived those challenges, one has never been tried — and it’s promising.

People in Alaska and Hawaii deserve better.

The Port Preference Clause in Article I, Section 9 of the U.S. Constitution explicitly states, “No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another.” Yet, the very purpose of the Jones Act is to prioritize the ports of the mainland states.

Maybe that protectionist purpose was constitutional in 1920 when the object of the discrimination was only American “territories.” But once Alaska and Hawaii became states in 1959, it became harder to justify.

And given that the effects of the Jones Act are felt acutely by residents and businesses in those states, the constitutionality of this century-old legislation is seriously suspect. If the Port Preference Clause means anything, it means Congress cannot pass laws that have the purpose and effect of putting Alaskan and Hawaii ports at a disadvantage.

People in Alaska and Hawaii deserve better than to be shackled by this relic of a bygone era, and the Constitution mandates it. Where there’s a willing plaintiff, there’s a way to do it.