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"One of the most significant contributors to the high cost of living in Hawaii is the Merchant Marine Act of 1920 (also known as the Jones Act), which prevents foreign-flagged ships from carrying cargo between two American ports (a practice known as cabotage)."
Basically a tax on Hawaii due to inefficient shipping costs...
From wikipedia: Hawaii - Wikipedia, the free encyclopedia"One of the most significant contributors to the high cost of living in Hawaii is the Merchant Marine Act of 1920 (also known as the Jones Act), which prevents foreign-flagged ships from carrying cargo between two American ports (a practice known as cabotage)." Basically a tax on Hawaii due to inefficient shipping costs...
Yes, and no. The Jones Act does not single out Hawai'i, as all US ports are treated the same. And the stated purpose is to protect the American ship-building and maritime industries, which otherwise would almost certainly disappear. In the global market for maritime shipping, the US simply cannot compete.
And this obviously has big national defense implications. Personally I find the prospect of, say, Chinese shipping companies controlling the traffic to and from Hawai'i to be frightening. Then we'd be vulnerable to every gust of political wind, and our economy and well-being could easily be hijacked.
And given that we're at the end of such a long supply chain, it can be argued that we are the biggest beneficiaries of the Jones Act, and that the higher shipping costs we pay are necessary to keep American companies in the picture.
I agree it has merit, but seems Hawaii and Alaska should get some relief for something the entire nation enjoys. Also this:
From wikipedia: Hawaii - Wikipedia, the free encyclopedia
"because of the Jones Act, foreign ships inbound with those goods cannot stop in Honolulu, offload Hawaii-bound goods, load mainland-bound Hawaii-manufactured goods, and continue to West Coast ports. Instead, they must proceed directly to the West Coast, where distributors break bulk and send Hawaiian-bound Asian-manufactured goods back west across the ocean by U.S.-flagged ships. Hawaiian consumers ultimately bear the expense of transporting goods again across the Pacific on U.S.-flagged ships subject to the extremely high operating costs imposed by the Seamen's Act."
Probably also explains lack of water travel options between Hawaii and elsewhere as well. Maybe part of the anger/resentment of rich/tourists in Hawaii (while justified in some cases), could be put on disproportionately supporting the US merchant fleet:
"In 1997, a Hawaii government official named Gene Ward asserted that Hawaii residents pay an additional $1 billion per year in higher prices because of the Jones Act. This amounts to approximately $3,000 for every household in Hawaii."
"One of the most significant contributors to the high cost of living in Hawaii is the Merchant Marine Act of 1920 (also known as the Jones Act), which prevents foreign-flagged ships from carrying cargo between two American ports (a practice known as cabotage)."
Basically a tax on Hawaii due to inefficient shipping costs...
There are a lot of pros and cons regarding the Jones Act - but, my biggest disagreement is the statement it is one of the most significant contributors to the high cost of living.
By far and away, the highest contributor is low wages.
The price of goods in Hawaii from my experience is comparable to the San Francisco Bay Area (at least in Oahu - the outer islands is another story). There are some big variances like Milk and Electric, but I'd bet 90% of the items at Safeway are comparable to a SF Safeway. The prices at Sears is the same as on the mainland. Rent is similar in Hawaii to SF. I actually think the price disparities from 15 years ago are closing quite a lot.
However, with our goods and services comparable to Bay Area - our wages are often 50%+ less than what one would earn on the Mainland. That is causing the huge cost of living difference.
Here is an example: The average teacher salary in San Francisco is over $60,000/year. The absolute highest paid, most experienced teachers with a Phd, don't make $60,000 yearly in Hawaii.
The simple reason shipping costs to Hawai'i are high is due to the fact that shipping to Hawai'i is a one-way trip. Containers come to Hawai'i full and generally return to the mainland empty. There is no absolutely no revenue accrued when shipping empty containers.
And if it were any cheaper to live in Hawaii, do you think you could stand living like sardines with the, oh say, about 20 million more folks who would try to move over here and compete for the few jobs there are as it is?
That means it's harder to get some of the things you like. Things are more expensive to ship and slower to arrive by Courier. Courier service overnight means 2 days here. Even if there are a few stores on Oahu that carry what you want, that doesn't mean that they'll have it in stock on a given day.
Hmm many issues at play. Just wanted to have a discussion as I bumped across this issue while researching Hawaii. I had never heard it brought up in discussions or forums, and it was intriguing that protectionism seems to play a part in driving up the cost of living for Hawaii residents.
I hear you that Hawaii and Cali prices are similar in most respects, but maybe they shouldn't be. Wouldn't Hawaii be a natural port of call for shipping given its location to Asia? (The US military seems to think so). And thus be able derive cost benefit from that status?
Why should Hawaii's solution be to provide New York style wages to support potentially self induced cost inflation? I don't see how it could be a major job center and still maintain an island paradise feel.
So maybe it wouldn't solve all woes like real estate and carpetbaggers, but bringing down the cost of goods would be a good way to provide a better life for the population.
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