The United States Congress ratified the Jones Act in 1920 in order to protect American ship builders and American maritime industry, according to Economics Lecturer Dr. Gale Pooley at BYU–Hawaii. The 99-year-old maritime law has affected the State of Hawaii on the price of goods and students' affordability.
Dr. Pooley said, “Hawaii carries disproportionate burden [from] this law because we are so far away from other states.”
Effects of the Jones Act
The original purpose of the law, according to Dr. Pooley, was “ … to protect and strengthen this industry [maritime and ship building] for our national defense. We wanted to encourage ship building in the United States crewed with American citizens, and that probably served its purpose.”
According to Dr. Pooley, the Jones Act states if a foreign ship were to dock in a U.S. port, it would not be permitted to reload and dock in another U.S. port. Dr. Pooley said this is essentially good for the American shipping industry, however, it brings the cost burden to a state like Hawaii or an American territory like Puerto Rico.
The law was for both economic protection and national defense of the United States. Today, however, “The U.S. military buys from manufacturers of military weapons from all over the planet,” said Dr. Pooley.
Dr. Pooley showed a Google map of Puerto Rico and the U.S. Virgin Islands, both located in the Caribbean. According to Pooley, the U.S. Virgin Islands are not burdened by the cost of goods compared to Puerto Rico.
“The cost of shipping from Miami to Puerto Rico will cost more." The key importance, Dr. Pooley described, is how goods are shipped to Hawaii. He said foreign ships can unload in Hawaii, but they will not be allowed to reload and ship goods to states like California.
Rising costs to students
Michael Waters, a sophomore majoring in political science from Oregon, said, “A lot of things, groceries and daily needs, are significantly more expensive than Oregon. The way the economics work, they make more profit by charging a higher price and provide lesser-quantity service. Whereas in a competitive market, firms have to take whatever the market prices are and still remain cost effective.
“So, what ends up happening is the resources we spend in other places could be better used to more shipping to Hawaii. Because there is a monopoly to American ships, that ends up not happening. The resources aren’t being put into their most-valued use.”
Gracie Damstedt, a senior majoring in biochemistry from Washington, said, “The Laie environment is more different than in Honolulu for off-campus housing. The range is $400 to $600. In town, it is probably more expensive.”
She added, “Food costs a lot more in Hawaii than in Washington because everything has to be shipped over here. I just know I pay more here than at home.”