Recruiting technically skilled workers is crucial to revitalizing America’s lagging shipbuilding industry, but that won’t happen if welders and electricians aren’t paid more than an employee at a fast-food restaurant, industry watchers told lawmakers on Capitol Hill.
The hearing was held in the wake of an executive order from President Trump designed to rebuild and bolster the country’s domestic shipyard industrial base, citing in particular concerns that China is far outpacing the U.S. in the sector. Mr. Trump ordered a governmentwide 45-day review on ways to revamp the American maritime industry. “We used to make so many ships. We don’t make them anymore very much, but we’re going to make them very fast, very soon,” he said.
The presidential proclamation could run into a hard dose of reality.
Eric Labs, a naval analyst at the Congressional Budget Office, told a congressional hearing Tuesday that pay raises for shipyard workers are necessary.
“You could drive by a Subway [sandwich shop] advertising a position that pays $18 an hour plus benefits, and the shipyards are paying $20 or $21 an hour,” Mr. Labs said. “But shipyard work is hot, it’s cold, it’s dirty and it’s unpleasant.”
Rep. Trent Kelly, the Mississippi Republican who chaired the hearing by the House Armed Services subcommittee on seapower and projection forces, said the U.S. couldn’t fulfill its historic obligation as a seapower unless it rapidly expands the nation’s fleet of warships and the crews to sail them.
The Congressional Budget Office this year said that, based on production trend lines, the Navy would need to spend more than $40 billion annually for 30 years to meet its proposed plans to expand its battle force fleet. The Military Times recently reported that the fleet has 295 battle force ships and that the number is expected to drop to 283 ships by 2027 as older ships are taken out of service.
Congress has set a requirement for 381 warships based on the most recent Battle Force Ship Assessment and Requirement report from 2023. The most recent 30-year shipbuilding plan lays out a path in which the U.S. won’t meet that mark until 2050, Mr. Kelly said.
He said Mr. Trump’s executive order, which shines new attention on the shortfalls, was badly needed.
“These problems are why I am so excited about the president’s plan to ‘stand up’ a dedicated shipbuilding office in the White House,” he said. “This is a critical step toward ensuring that shipbuilding remains a national priority and that we take a ‘whole-of-government’ approach to strengthening our industrial base.”
Economists say the U.S. lacks the skilled, low-cost workforce and the maritime port infrastructure to support a world-class shipbuilding sector. Mr. Labs said the pay contrast between a shipyard employee and a retail worker may become more stark.
“It’s not just wages, although I think wages are important, especially for entry-level workers,” he testified. “But so are other things like improving their quality of life … and improving benefits of various kinds.”
Mr. Labs cited the lack of affordable housing near shipyards as one of the challenges of beefing up the workforce.
Analysts with the Congressional Budget Office and the General Accountability Office have scrutinized cost overruns and “extreme” increases in unit costs for many shipbuilding programs, Mr. Kelly said.
A concerted focus on reviving American shipbuilding may prove prohibitively expensive.
“If this trend continues, we may not be able to recapitalize our fleet without sacrificing other budget priorities,” he said. “We need more than just small adjustments. We need a bold and comprehensive commitment to rebuilding our shipbuilding industrial base.”
Rep. Rob Wittman, Virginia Republican, said the problem of the nation’s shrinking number of shipyards isn’t a state secret.
“The names have changed, but the song remains the same. It’s been the same for the last two decades,” Mr. Wittman said. “We know what we need to do. We just can’t seem to find a way to get it done.”
Rep. Donald Norcross, New Jersey Democrat, said the lack of skilled workers at shipyards can be solved relatively easily by paying workers more.
“Give the workers value that we care about what they do and pay them the right amount of money. It really is that simple,” Mr. Norcross said. “You can get the people if you treat them well and you pay them.”
Ronald O’Rourke, a naval analyst with the Congressional Research Service, suggested creating a shipbuilding “lessons learned” center to reduce the tendency to repeat the same construction mistakes. He noted that he suggested the idea at least 10 years ago.
“I’ve observed on many occasions over the years where the Navy appears to not really ‘learned the lesson’ but simply notes it and then eventually forgets it, only to have it rediscovered the hard way years later,” Mr. O’Rourke testified.
The Government Accountability Office recommended that the Navy further develop the functional design of its new Constellation-class guided missile frigates before beginning construction of the second warship since the first is already underway.
“We know that the Navy and the builder are doing significant work now to really mature that design. It’s that key that commercial shipbuilders follow,” said Shelby Oakley, director of contracting and national security acquisitions at the GAO. “When they start ‘bending metal’ and start construction, they know what they expect to get and when they are going to get it.”
Any expanding U.S. shipbuilding industry will have to contend with subsidized rivals in China and other countries in an industry where playing catch-up is particularly difficult, said Timothy Taylor, author of the “Conversable Economist” blog and managing editor of the Journal of Economic Perspectives.
“I struggle to imagine the U.S. economy becoming an important global ship-building nation,” he wrote this year.
“In a big-picture sense, the country would need to develop the domestic expertise to drive down the cost of building large ocean-going vessels by, say, 75%. This would involve a building managerial and corporate expertise, along with worker expertise, and developing the supply chains of specialized products to support this effort.”
“But a more basic starting point [is] — imagine the problems in a U.S. context of acquiring land and permitting by the ocean or a large enough river to make launching hundreds of ocean-going ships possible.”
