Getting people to dedicate their workdays to welding at a shipyard, when they could make comparable earnings serving customers at an air-conditioned Buc-ee’s, presents a significant challenge to revitalizing the nation's struggling $37 billion shipbuilding sector.
TL;DR
- Navy Secretary John Phelan cites low wages as a major challenge for the U.S. shipbuilding sector.
- Shipyard workers can earn comparable wages at places like Buc-ee’s or Amazon, making recruitment difficult.
- The U.S. shipbuilding sector faces competition from Asian nations and a general lack of job satisfaction.
- Many manual labor jobs, including shipbuilding, struggle with recruitment and retaining younger workers.
That's the prevailing idea, according to U.S. Navy Secretary John Phelan. During his confirmation hearing in February, he stated that President Donald Trump had given him a directive of “shipbuilding, shipbuilding, shipbuilding”.
Over the last seven months, Phelan has prepared the way for greater shipbuilding capabilities, utilizing his business expertise (he's the first Navy Secretary in 15 years without military experience) to reduce waste and foster rivalry. Nevertheless, the Navy's meager pay remains an obstacle, he stated at a defense forum this week in Fort Wayne, Indiana.
“I think this is really an issue of wages, to be honest, when I look at it across states,” Phelan said, noting employees can earn a similar wage working at Amazon or Buc-ee’s mega gas stations. When folks are aware of what else is out there to make the same income, “it’s hard to get that person to want to do that job.”
This sector, which provides more $37.3 billion to the national GDP and employs 110,000 individuals, as reported by the U.S. Department of Transportation’s Maritime Administration, has seen a downward trend for some time. Factors contributing to this issue include changing government focuses, the discontinuation of shipbuilding grants under the Reagan administration, and rivalry from Asian nations. China's foremost state-controlled shipbuilding company has constructed more built more ships in 2024 by tonnage than the entire U.S. Output since the conclusion of World War II, according to The Center for Strategic and International Studies, a non-partisan research organization.
However, shipbuilding, much like other manual labor professions in the United States, faces a crisis of personal satisfaction, particularly concerning younger staff members. A little over fifty percent of manual laborers, encompassing those in production, extraction, and building trades, report their jobs as “just a job to get you by”—twice the proportion of other employees who expressed similar sentiments, as indicated by a March study from Pew Research Center. Furthermore, a mere 25% of manual laborers reported contentment with their compensation, in contrast to just under one-third of other workers.
To be sure, some Gen Zers have increasingly turned to the trades as a possible alternative to the large debt loads and AI job-related risks that they see as being associated with the traditional four-year college degree. Yet, the number of interested young people still pales in comparison to open positions.
Leaders of companies employing many blue-collar workers, such as Ford CEO Jim Farley, who bluntly said “We are in trouble in our country”, have also recently highlighted the challenges of recruitment and keeping employees. In a podcast released last week, Farley mentioned that Ford currently has 5,000 vacant mechanic roles, with some offering salaries up to $120,000 post-training. Furthermore, Farley noted that there are a million unfilled jobs not only in manufacturing but also in emergency services, trucking, and various trades.
It’s unclear exactly how much shipbuilders earn as salaries vary, but a listing for a “fabricator and fitter” at Chesapeake Shipbuilding Corp. Was listed with a salary of between $21 and $30 an hour, according to jobs platform Indeed. Buc-ee’s workers make an average of $15 and $25 per hour, and Amazon workers in fulfillment and transportation make an average of $23 per hour, according to Indeed.