[Congressional Record Volume 142, Number 7 (Monday, January 22, 1996)]
[Senate]
[Pages S280-S281]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

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                  THE JONES ACT SHOULD NOT BE REPEALED

 Mrs. MURRAY. Mr. President, there are proposals afoot--
generated by foreign-flag shipping interests and foreign corporations--
to repeal the Jones Act. This 1920 Act, named for Senator Wesley Jones 
of my State, mandates the use of U.S.-built, U.S.-crewed, U.S.-flagged 
vessels for voyages between two U.S. ports and on our Nation's inland 
waterways. Similar laws have been on the books since the 1790's, and 
nearly 50 nations have similar requirements for shipping in their own 
domestic commerce.
  This law should not be repealed.
  Mr. President, the domestic waterborne trades of the United States 
contribute more than $15 billion to the American economy, including 
more than $4 billion in direct wages to U.S. citizens. The economic 
impact of that income is multiplied by the thousands of additional jobs 
in cabotage-related businesses, the Jones Act employers and employees 
pay $1.4 billion in State and Federal taxes.
  The Jones Act is critical to the State of Washington and other 
coastal and inland waterways' States, and indirectly, it generates 
American jobs, tax revenues, and economic activity, in all 50 States.
  Unlike our international waterborne trades which are also the 
shipping lanes of our trading partners, the Jones Act trades are 
strictly a family trade--the commodities and the vessels move 
exclusively between American ports. So our trading partners have no 
reciprocal economic interest at stake in these trades. Indeed, our 
trading partners understandably have no interest in furthering the 
national interest objectives which the Jones Act is intended to 
enhance--jobs for Americans and a fourth arm of defense in times of 
national emergency.
  It seems to me that it makes no more sense to invite foreign shipping 
interests into our domestic trades, than it does to invite a stranger 
to intervene in a family matter. In either case, there is no necessity 
for doing so, and the results can be disastrous.
  Nevertheless, Mr. President, that is precisely what those who 
advocate repeal of the Jones Act would do, have outsiders intrude in 
the family's business.
  The needless risk of permitting this was recently detailed by Stanley 
H. Barer in his remarks before the American Association of Port 
Authorities.
  Mr. Barer is cochairman and CEO of Totem Resources Corp., a Jones Act 
operator which is headquartered in Seattle, WA, and which runs high-
speed, roll-on, roll-off liner vessels between the lower 48 contiguous 
States and Alaska. At one time, he was also the Merchant Marine Counsel 
to the Senate Committee on Commerce, Science, and Transportation. So 
his considerable knowledge and expertise have been acquired in the real 
world of ocean shipping and regulation. What Mr. Barer had to say to 
the AAPA is, in my view, very instructive and illuminating because it 
offers a realistic view of the worth and importance of the Jones Act to 
our economy and national security.
  Mr. President, I ask that Mr. Barer's remarks be inserted in the 
Record.

                      Remarks of Stanley H. Barer

       Thank you very much. It is a pleasure to be here at this 
     convention. I hope I can set the record straight for you 
     about the U.S. merchant marine and, in particular, the Jones 
     Act.
       The Jones Act requires that America's domestic waterborne 
     trade must be reserved for carriers owned by Americans, 
     aboard vessels that fly the U.S. flag and were built in this 
     country, and that are crewed by American citizens. Reserving 
     U.S. water transport for American companies and crews is what 
     our cabotage system is all about. And it's a pretty easy idea 
     to understand.
       With its extraordinary land mass and diversity, the United 
     States is in substantial part bound together as one nation 
     because of our ability to travel from place to place, thus 
     assuring that all parts and all people of our nation have 
     access to the goods and services that give us the highest 
     standard of living in the world. We would be quite foolish, 
     with a nation of our size, diversity and transportation 
     requirements, to turn our domestic transportation over to the 
     mercy of foreign carriers. Let us never forget that when you 
     talk about the Jones Act, you are talking about 
     transportation services that take place within the United 
     States involving only the movement of goods or people from 
     one part of the country to another.
       This national policy of self-sufficiency in domestic 
     transportation is also reflected in rail, trucking and 
     aviation. It has been a consistent policy of our nation and 
     nearly every other advanced nation on the face of this earth. 
     And, when you think about it, it is not unusual to have such 
     a transportation policy. Under our immigration laws, work in 
     virtually every industry of our country is reserved for our 
     own citizens. It is the rule, not the exception, that nations 
     reserve the job opportunities inside their own borders to 
     their own citizens, so long as their own citizens have the 
     capacity to do the work.
       Thanks to this policy, today the U.S. has a Jones Act fleet 
     of over 44,000 vessels, which provides direct employment for 
     124,000 American workers. And those workers earn more than 
     $3.3 billion in wages a year.
       Opponents of the Jones Act point out that U.S. labor costs 
     on our ships, tugboats, barges and shipyards run two to three 
     times the so-called ``world labor rate.'' This is true. Of 
     course, you could make the same statement about virtually any 
     industry in this country. And, in fact, the merchant 
     seafarers of Sweden, Denmark, Norway, Holland and Japan all 
     earn higher net wages than their American counterparts. Jones 
     Act opponents say that, by bringing foreign ships and foreign 
     crews into our coastal and intercoastal trades we can lower 
     wage operating costs by up to 50 percent.
       Let's look at those world wage rates. Under the 
     International Transport Federation standard, the average wage 
     for the captain of a tanker or large container ship is $12 an 
     hour, and the other officers are just slightly above the U.S. 
     minimum wage of $5.25 an hour. The entire rest of a ship's 
     crew under the ITF guidelines would be paid less than the 
     U.S. minimum wage. And the ITF requires no payments for 
     health, pension or other benefits. Ultimately, I believe, the 
     issue is not whether Jones Act maritime workers carrying our 
     domestic cargo make more than the ``world standard,'' the 
     real issue is whether those workers are being paid a fair 
     American wage, with respect to the other transportation 
     modes.
       Each of our domestic transportation modes--water, rail, 
     trucking and air cargo--employs Americans at American wage 
     levels and none of them faces domestic competition from 
     foreigners. For example, a tanker captain earns about $80,000 
     a year, which is $30,000 less than a pilot flying a domestic 
     cargo plane. A tugboat captain might earn $50,000, about 
     the same as a railroad engineer. A deck hand on a Jones 
     Act ship makes about the same pay as a domestic flight 
     attendant, about 25,000 to 30,000 a year. Compare that to 
     a long-distance, line-haul truck driver, who might make as 
     much as $75,000 a year.
       And it is also important to keep in mind the hours worked 
     by our merchant mariners. While the air cargo pilot averages 
     83 hours in flight time, or about 20 hours a week, a tanker 
     or tugboat captain works at least 12 hours a day and is on 
     duty 24 hours a day on the vessel. This goes on seven days a 
     week, sometimes for weeks and sometimes for months. Our 
     captains on our big roll-on, roll-off liner vessels to Alaska 
     are on their vessels 24 hours a day, seven days a week for 
     months at a time. They are away from their families, and 
     their work is dangerous.
       Now, Jones Act opponents are arguing for getting rid of our 
     domestic maritime workers and bringing in foreign ships with 
     foreign crews. Let's think about what would happen if that 
     came true.
       I assume that the truckers who compete directly against 
     water carriers would come storming to Congress and say: ``You 
     have upset the competitive balance between water, rail, truck 
     and air cargo. We can't compete against the water carriers 
     with our high-priced U.S. truck drivers.'' Truckers will say, 
     to keep the balance fair we need to bring in foreign, below-
     minimum-wage truck drivers. And they would have a good 
     argument--what would Congress say? And if you let the water 
     carriers and truckers use foreign labor, the railroads and 
     then the air cargo carriers are going to demand the same 
     ability.
       At this point, we have thrown hundreds of thousands of 
     Americans out of work. What would happen next? I have an 
     idea.
       Companies outside domestic transportation, companies that 
     compete on a daily basis in the global economy, will demand 
     the right to fire Americans and bring in low-cost, below-
     U.S.-minimum-wage foreign workers. After all, if we are going 
     to do this for domestic transportation, which is currently 
     immune from foreign competition, 

[[Page S281]]
     why shouldn't we do this for those American companies who face foreign 
     competition for their products and services every day in the 
     marketplace?
       I want to point out a few more things about what Jones Act 
     opponents are proposing.
       Their draft legislation assumes that the foreign workers 
     brought into our maritime coastal trades will pay no federal 
     or state income taxes, nor will the owners of those vessels 
     under foreign flag pay any U.S. taxes. And that would be the 
     case.
       As I read the proposal, these companies under foreign flag 
     and their crew members are not only exempt from U.S. taxes 
     and U.S. minimum wage laws, but also the National Labor 
     Relations Act, federal hours-of-service regulations, child 
     labor laws, Coast Guard safety regulations, the U.S. civil 
     rights laws, our national laws relating to health insurance, 
     pensions and other benefits, and all other state and federal 
     legal requirements.
       Jones Act opponents say these foreign vessels and crew 
     members should meet ``international standards.'' Does that 
     mean that the navigation and safety crew members must be able 
     to speak English, so they can communicate with environmental 
     and rescue workers, or Coast Guard authorities? I guess not.
       And nothing in the proposal talks about how our nation 
     would deal with all those Americans left unemployed by the 
     repeal of the Jones Act, or how we would compensate American 
     vessel owners whose investment in modern, U.S.-built ships 
     would be destroyed.
       Let me tell you a little about my own situation. I am 
     management. I am an owner. I risked capital to be in this 
     business. I have negotiated with labor unions. My company has 
     more than 2,000 employees whose fathers and grandfathers and 
     uncles have all worked for our tug and barge company over the 
     106 years it has been in business.
       We don't want to fire these people. Who wants us to do 
     this? Is this what America is about?
       If we can do this in the transportation sector, I guess we 
     can do it anywhere--manufacturing, communications, health 
     care, education, and I guess we could even fire all of our 
     government workers and bring in low-cost people to work in 
     government and man our armed forces. I submit this is not a 
     sound idea.
       I was very curious as to who was financing these people who 
     are calling for repeal of the Jones Act, and who was 
     supporting them. I was pleased that not one of our customers 
     in Alaska or the West Coast was among their supporters. But I 
     did find that over 90 percent of those supporting him were 
     trade associations representing wheat or grain producers. I 
     would just like to note that, while Jones Act carriers 
     receive not a dollar in federal subsidies or handouts, $5.5 
     billion in federal subsidies goes to wheat and feed-grain 
     farmers each year. I am not here to argue against the farm 
     program but I think it should be recognized that the people 
     who want to get rid of U.S. citizens in domestic transport 
     are the same people who are taking $5.5 billion dollars a 
     year for their own industry from the taxpayers, but they are 
     not advocating that foreign grain companies and foreign grain 
     workers come in and take over their jobs and companies in the 
     United States. All these farm executives and their corporate 
     staffs and trade organizations and employees make good wages. 
     I think that's fine--I am not against that. I am not even 
     against the farm program. But I do have a problem with that 
     industry trying to destroy my industry without first getting 
     their own financial house in order.
  So, please, in considering these public policy issues, think about 
those you represent--the taxpaying American citizens. If you do that, I 
think you will have no trouble telling the Jones Act Reform Committee 
that they should go out of business rather that telling my industry 
that we should go out of business.

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