The Jones Act
- Angelina Molina
- 2 days ago
- 11 min read
By: Angelina Molina
A law that was made applicable in the 1920s no longer meets the needs of the people of Puerto Rico today. The Merchant Marine Act was a sensible declaration and law enacted post- World War I. However now in the turn of the 21st century this law is inadequate for the citizens of Puerto Rico and its effects are used differently than when placed. Puerto Rico, an island that is smaller than the state of Connecticut, is not in an economic position to continue with the Jones Act, nor is it a law that is fair in today's world seeing as other islands are exempted from this act.
Understanding the Merchant Marine Act is to know the premises of what this law entails and what is permissible under the act. The enactment of the law in 1920 was to set America up with a domestic trade economy, establish a naval auxiliary, and give seamen the ability to sue employers in cases of negligence.
The focus of this report is to note that the Jones Act is that ships transporting goods domestically must be ships that are U.S built, U.S flagged, U.S owned, and the crew must be 70% U.S citizens. The commerciality of this act is not in question however given that Puerto Rico ports are U.S owned and Puerto Ricans are United States citizens this should be enough to exempt them from the Jones Act except it is not. Given that exemptions for this act do exist even partial exemptions U.S Virgin Islands, America Samoa, Marina Island and Guam have a partial exemption from this law. Knowing that the Jones Act creates a bigger tax for the citizens of the islands, it has been calculated that “capital goods by the private sector cost 3 percent, more than they would have if the Jones Act did not exist”. With the current political climate of our state, the conversation of re-evaluating the Jones Act is to offer a more updated version to give Puerto Rico a chance for a better economy and way of living. For an island that imports 85% of its food, and there GDP import is 42.83% for 2024 and over 85% of its total imports come from the United States. It is not a substantial way of living considering that 40% of Puerto Ricans live below the federal poverty level. Amending this law isn’t a question of could it make a better life for Puerto Ricans but how, highlight inequalities in the system, showcase the discount for a strong navel control because the U.S has a strong military, how the Jones effects business in the U.S negatively.
Puerto Rico should in parallel be given the same social and economic opportunities as the U.S not a more obstruct version of growth.
Merchant Marine Act is the proper name for the law that includes the Jones Act in which falls under section 46 U.S.C. 55102. To properly conceptualize this law and its application to the people of Puerto Rico and its need for amending, must understand the basic functions of its purpose and how it is regulated in terms of trade. The codes for this law are extensive and being able to understand the dates are tedious due to the amplification of what is covered in the act. When studying the law to have a better overview can be confusing what is applicable and what particularly is covered or falls under the law. The umbrella of the Jones Act is maritime commerce and seamen’s rights. Maritime commerce deals with cargo transported between U.S ports, on U.S vessels which are U.S built, U.S owned, U.S flagged, crewed by U.S citizens. Seamen laws covers the workers who face illnesses or accidents due to the negligence of an employer. The need for amending this law does not come from excluding seamen law but the requirements of the commerce aspect. The higher tax rates does not only apply to United States territory but also states such as Alaska and Hawaii face the same struggles due to the Jones Act. The concern is the pricing that comes from cabotage restrictions that come from the law. Fundamentally, the ineffectiveness of being able to easily transport goods on regular ships or from non-domestic shipping does cost an economic disproportionately for Puerto Rico and the States.
In 1920 when the law was signed it had been post-World War and the predicated effect was to create a powerful national fleet after seeing how the U.S struggled during the great war to transport goods having to rely on foreign aid, support the maritime industry, and ultimately create economic growth in the states by creating more jobs. In spite however majority of the reasons for the creation of this act are largely not needed in today’s world. Due to the commerce restrictions the Jones Act has allowed America to be the most restrictive in trade for domestic ports, meaning that less than 3% of goods are traveled to domestic ports through methods of sea vessels.2 As it stands today, there are no advancements on policy or law regarding the Jones act dealing with shipping, most cases that are tried in state or federal level are due to the injury of seamen workers. The Jones act has had little done to be ratified in recent years as a lot of people's main concerns are national security. Nonetheless this act is disorderly in terms of how its objectives doses not align with the outcomes of the law. Puerto Rico is reliant on shipping goods onto the island as it cannot produce. A stable economic life for Puerto Ricans has been on a decline as of the implication of the Jones Act, in addition to societal issues now in the modern day due to gentrification and exploitation of citizens on the island.
Economic disparities
The politics of the Jones Act is more complicated to explain and is part of the reason that there has not been much push back to amend the law. Convincing others of the Jones act impacts the economic state of Puerto Rico is difficult when one does not understand truly how much Puerto Rico imports. A report by an economic overview found that 85% of its goods4 and is a Caribbean island meaning that it is more prone to drastic weather impacts receiving aid after natural disasters. In order for Puerto Rico to receive aid, it must place very rigid exemptions that cover a very limited time frame to allow foreign ships to assist in bringing the country's aid in any capacity. Prevalent after hurricane Maria when the Jones Acted needed to be waived to allow ships to distribute aid after it had been slowed down due to the Jones Act. An island the size of Puerto Rico cannot stand to receive damages such as “hurricanes Irma and Maria caused billions of dollars in damage to Puerto Rico's infrastructure, housing, and economy”. A country that faces severe challenges in rebuilding its infrastructure while still paying higher prices for daily items is unjust. It has been estimated that shipping cost between the United States and Puerto Rico can be sampled by “20-foot container from Jacksonville, Florida to San Juan was $3,390, or about $3 per nautical mile. The quote for shipping a similar 20-foot container from Veracruz, Mexico to San Juan, a longer journey, was only $1,350, or $0.77 per nautical mile”. The Jones Act is an active deterrer of progress for residents to achieving a seemingly comfortable way of living life when cost of living is high. Due to these cabotage regulation and restriction the islands is receiving costly damages with nothing more than minimum support.
Political adversaries
The politics of the Jones Act is more complicated to explain and is part of the reason that there has not been minimal push back to amending the law. Many people do not agree that the Jones act impacts on economic state of Puerto Rico but that would be speaking of interest. As it stands today, Puerto Rico has no vote in congress, meaning there is no active voice fighting for equality, or making the daily issues of these residents heard. Meaning that Puerto Rico faces serious political barriers that include limited congressional representation for Puerto Rico and concentrated lobbying7. The inequality of the Jones Act shouldn’t be lost as a majority of other island territories are exempted from this act and if not, a partial exemption exists, and Puerto Rico is not given either option. Alaska and Hawaii are faced with the same issues of submitting to pure American domestic shipping. The economic tension of this act is felt drastically. Residents of the two states have found that “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”8. Not only is the economics on this law found controversial and detrimental to these states and Puerto Rico economy, but the politics in this act have prevented any amendments on the shipping to be passed. Citizens as well as firms have speculated that the law lack of apprehension on amending is due to “protecting a few powerful players from competition moves legislators more than economic freedom”
Seamen polices and its backfire effects on the Jones Act
The main issues on getting people to understand how deeply the Jone Act effects its citizens is because it also deals with American trade and the protection of the blue-collar seamen workers. Having a law that many citizens do not see being in practice every day such as traffic laws, food regulation, transportation people do not think it has direct effect, and to that extent many believe that amending the Jones Act would take away the rights of the seamen being able to sue the extensive corporations that they work under. This act is the most extensive for the workers in this industry, “The Jones Act allows seamen to seek compensation if they are injured or die at sea. In the case of death, a personal representative may seek compensation on their behalf. In any of these cases, the party may bring a civil lawsuit against the seaman’s employer - Negligence can include unsafe instructions, unsafe work conditions, faulty equipment, failure to provide medical treatment, and more”.
Now it is important to note that amending the law does not call for a complete riddance of the statutes that cover seamen's rights as many believe considerably maritime sailors and seamen are the biggest beneficiaries of this law as for them it does create jobs, and it gives sailors practice commandeering big marine vessels. Amending the law would only affect seamen's directly through a difference in workforce ability.
By this the workers of these cargo ships would become more complicated. Loosing up on domestic trade would allow for international companies to transport direct to the island. Relatively this would call for less demand for U.S seamen workers. However, their rights would always stay established and in amending the law it would draw a clearer distinction between giving Puerto Rico an exemption, outlining the clauses of the exemption, and direct law for the seamen's protection.
Jones Act societal effect in Puerto Rico
The way of life between Puerto Rico and the Continental United States is different in numerous ways. A law that cannot benefit all citizens equally cannot be a law that should continue to be present. In recent years the Jones Act has gotten an increase in attention in the media. Past 20 years Puerto Rico has experienced gentrification to a massive degree. Not only on gentrification, but the income and sales tax in Puerto Rico is much larger compared to those in the States. The economic difference created by this act also trickles into social issues and injustices for the residents of Puerto Rico. In this research it is found that the “distribute the income created in an equitable manner. Puerto Rico has a higher rate of income inequality than any other U.S. jurisdiction, with a 2021 GINI index rate of .545 compared with the national average of .482”.
A society with bad economic standing can’t uplift themselves. When a large of crucial infrastructure material are unable to enter Puerto Rico, it sets back their growth as a society. Found in a PBS report “CNN reported that goods entering Puerto Rico are piling up at the ports, and the island’s damaged infrastructure is to blame. Fuel shortages, damaged roads and debris are preventing truckers from showing up to work, so ships carrying supplies are waiting to enter the port of San Juan.”
How amending the Jones Act will work
The most formative way to help Puerto Rico and make this law fair for all the islands is to amend the law to include Puerto Rico for an exemption from the act. Seeing as almost all other islands have an exemption or even a partial exemption and do not face similar challenges as Puerto Rico. Re writing the Merchant Marine Act to properly announce the territories that are exempted from the act will be able to create a more understandable and justified policy. As the current policy stands, it is set to establish a strong national security, seamen protection, and boost U.S domestic trade. However, this law creates a complicated dynamic between seamen's rights and domestic trade that hinders public opinion on modifying the law. Outlining that the distinction of Puerto Rico receiving an exemption would greatly impact the traction of why rewriting this law would work. As an impact from the Merchant Marine Act Puerto has faced higher shipping cost, a deduction of economic competitiveness due to the reliance on U.S imports, increased consumer 1. This law was enacted a century ago and ultimately does not apply to today modern world and certainly no longer fits the demanded and necessitates of the Puerto Rican public.
Bibliography
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