The following was a “Reader alert” issued Nov. 17, 2021, by the Grassroot Institute of Hawaii.
The U.S. Supreme Court upheld the discriminatory legislation in 1922, but even after Alaska became a state, the economic harm continued
HONOLULU, Nov. 17, 2021 >> It is well established that the protectionist Jones Act has long been a costly problem for the residents of Hawaii and Puerto Rico, who rely on waterborne transportation for most of their imports and exports.
So has it been for Alaska, which takes center stage in the newest Grassroot Institute of Hawaii policy brief, “Alaska: The Jones Act’s original victim,” produced in conjunction with the Alaska Policy Forum.
The Jones Act, of course, is that federal maritime law enacted in 1920 that requires all merchandise transported between U.S. ports to be on ships that are U.S. flagged and built, and mostly owned and crewed by Americans. In other words, it’s a law that restricts shipping competition, raising costs for both U.S. shipping companies and U.S. consumers.
Drawing on numerous documents and news reports, institute research associate Jonathan Helton details how the sponsor of the law, U.S. Sen. Wesley Jones, of Washington, specifically disadvantaged Alaska — by name — for the benefit of shipping companies in his home state.
In 1922, the U.S. Supreme Court upheld Jones’ discriminatory legislation on the grounds that Alaska was a territory, not a state. But even when Alaska finally became a state — in 1959, along with Hawaii — the economic and social harm continued.
In his foreword for the policy brief, Institute President Keli’i Akina writes that it might have been common in the 1920s “to put the needs of a territory behind the economic interests of a state. However, when times and circumstances changed, the Jones Act did not.”
Even after Hawaii and Alaska became states, Akina says, “that did little to relieve them of the costs imposed by the law. Both will always be geographically distant from the ‘lower 48,’ and both have had to bear extra burdens, in ways that other states do not, to satisfy the protectionist impulses of a bygone era.”
In her foreword for the brief, Alaska Policy Forum President Bethany Marcum calls Helton’s research “a surprisingly fascinating read.”
Says Marcum: “It is about the effect of the federal Jones Act on Alaska, and it clearly lays out the history of how Alaska’s best interests were ignored from the act’s origins, more than 100 years ago. That is when the federal government, led by protectionist politicians from Washington state, created a monopoly on cargo shipping to and from Alaska. That was actually the intent of the sponsor of the Jones Act: to protect Seattle-based shippers from any competition. But what was good for those in Washington shipping companies continues to be quite bad for Alaska.
“Alaska needs new industries and the related jobs that can create a strong economy,” Marcum says. “But the Jones Act is doing just what was intended at the onset: restricting Alaska jobs and contributing to our very high cost of living. Repealing or reforming this relic would go a long way toward making Alaska more competitive and prosperous.”
Akina write that one way to update the act for the 21st century “would be to modify its U.S.-build requirement, which would lower capital costs for U.S. carriers, lower shipping costs for consumers and make it easier to expand the U.S. commercial fleet.
“But whatever changes we make,” he says, “we need to ensure that the Jones Act no longer unfairly burdens states and territories such Alaska, Hawaii, Puerto Rico and Guam. A century of the status quo has been more than enough.”