Tuesday, June 21, 2016

Protectionism and HB-1 Visas

Donald Trump has rankled Silicon Valley talked about closing our borders to foreign talent. Does labor protectionism work?

It does for oceangoing ship's officers, job descriptions which requires  a license. The barriers to entry are set fairly high. Getting the basic license for oceangoing ships (Third Mate or Third Engineer) requires six years of work experience in entry level and semi-skilled shipboard jobs; four to six years in shipboard Navy service; an engineering degree; or four years of maritime college. Interestingly, I have not met an American engineer who has gotten a license from a non-maritime college.

In addition to the USMMA, six state maritime colleges make it their bread and butter to educate and train future ship's officers. To respond to changing times, these state colleges have expanded their scope of degrees to include related fields like marine biology and operations engineering. Each of these has a required regimental system, a requirement for federal funding. The rigidity of the regimental systems vary by college; for example, all require uniforms for class, but others add more intensity: The Maritime College of New York, for example, hired an administrator who had experience at both Guantanamo Bay and a federal prison in South Carolina. This lead to an online discussion on GCaptain about the reasons behind and merits of the regimental systems for students not in ROTC. Summed up as follows:

Why do they still have the regiment?
      Ship's officers need discipline when handling lives and millions of dollars of cargo.
The airline industry doesn't do it.
       You're at sea for weeks at a time.
Field engineers and wildcats don't do it either.
        OK....it helps weed people out and thus protects my income.

Officers of American ships, government or private, are required to be US citizens. With these requirements; and with demand created by the Jones Act, our maritime cabotage law similar to those for airlines and trucking; wages tend to be higher than on foreign ships. And American shipping companies were able to dominate the world market after World War Two... at least during the time they were able to acquire the best government surplus vessels. Today, American overseas commercial shipping is a shadow of its former self. Yet for decades, hardworking Americans have been able to benefit from "protectionist" policies.

Coming back to land, it has been argued that the HB-1 Visa program holds down wages of engineers and other technical staffers; who must go into management or entrepreneurship to get ahead. But alongside the well-educated worker-bees (In Korea, I met a man whose son was waiting for an HB-1 Visa) are the potential job creators of the future, who can't afford an EB-5 Investor's Visa. In shipping, the jobs protected are at the operational level. Strategy and ideas are implemented in the office and at the executive level. It would be difficult to work in the global economy while functioning in an isolationist vacuum, but as the experience in the American maritime industry shows, "protectionist" policies can protect middle-class jobs.