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U.S. President Joe Biden walks during his visit in Philly Shipyard in Philadelphia, Pennsylvania, U.S., July 20, 2023. REUTERS/Evelyn Hockstein

U.S. President Joe Biden walks during his visit in Philly Shipyard in Philadelphia, Pennsylvania, U.S., July 20, 2023. REUTERS/Evelyn Hockstein

Union Fights Back On Proposal To Import Foreign Labor Into US Merchant Marine

John Konrad
Total Views: 6241
December 13, 2023

by Captain John Konrad (gCaptain) A pivotal debate is unfolding, one that carries the potential to redefine the trajectory of the U.S. Merchant Marine. Central to this discourse are two divergent perspectives, championed by prominent industry figures. Adam Vokac, President of the Marine Engineers’ Beneficial Association Union (MEBA), and Sam Norton, CEO of Overseas Shipping Group (OSG), have stepped into the spotlight with their responses to my editorial that shed light on the deepening crewing crisis afflicting the U.S. maritime sector and the paucity of union pressure applied during what is arguably the most pro-union administration since FDR. The catalyst for this intense debate was a suggestion made by Norton in an interview with Tradewinds, advocating for the integration of foreign labor into the U.S. Merchant Marine, a proposal that has sparked a vigorous and consequential debate about the future direction of this vital industry.

Related Editorial: U.S. Shipping CEO Calls for Foreign Seafarers Amidst US Merchant Marine Pay and Crewing Crisis

“As loyal Americans who work every day in service to the United States Merchant Marine, we are deeply insulted by the remarks made by Sam Norton suggesting that the industry’s solution to address crewing shortages is to hire and replace them with foreign workers, plain and simple. Opening the door for non-U.S. citizens to work aboard U.S. vessels does nothing to solve the root cause of the problem,” said Vokac in a statement released today. “In fact, it would be the final nail in the coffin of the U.S. Merchant Marine.”

Washington, DC – As loyal Americans who work every day in service to the United States Merchant Marine, we are deeply insulted by the remarks made by Sam Norton suggesting that the industry’s solution to address crewing shortages is to hire and replace them with foreign workers, plain and simple. Opening the door for non-U.S. citizens to work aboard U.S. vessels does nothing to solve the root cause of the problem.

In fact, it would be the final nail in the coffin of the U.S. Merchant Marine — what self-respecting
American college graduate would choose to work in this industry fully knowing your best-case return
would be third-world wages and benefits? Mr. Norton’s ambitions would only suppress industry wages and the quality of work while driving away any hope of recruiting and retaining aspiring cadets and seamen who want to pursue a lifelong, prosperous career in shipping.

It is ironic that Mr. Norton, whose company receives tens of millions of American taxpayer dollars
annually to ship cargo for the United States military, wants to benefit from government support while
simultaneously exploiting cheap, foreign labor and further degrading our nation’s fourth arm of
defense. In fact, by the end of 2021, Mr. Norton personally received over $2.3 million in annual
compensation while his highest-paid mariners earn only a fraction of that number. Instead of looking to circumvent the employment of American labor, Mr. Norton would be better served using his time more wisely making his company a desirable place to work by improving the wages, retirement, and quality of life for the mariners that make his company profitable.”

Statement sent to gCaptain by Adam Vokac, President Marine Engineers’ Beneficial Association (MEBA) Union

Vokac’s strong response reflects a deep-seated concern for the integrity and future of American maritime labor. His opposition to Sam Norton’s proposal to solve the crewing shortage with immigration reform stems from a fundamental belief in protecting and prioritizing American jobs. Vokac sees this approach as a direct threat to the U.S. Merchant Marine, potentially leading to a decline in wages and working conditions that would make the sector unattractive to American workers, particularly recent maritime academy graduates. He argues that the industry should focus on making itself a more desirable place to work for Americans by improving wages, retirement plans, and overall quality of life at sea. Vokac’s perspective resonates with a broader theme of national pride and the responsibility of industries that benefit from the heavy investment of taxpayer dollars intended to back a strong domestic workforce.

M.E.B.A. union president Adam Vokac met with President Joe Biden in Baltimore to discuss the pursuit of policies to strengthen and increase the number of U.S.-flag ships. (2021 Photo via M.E.B.A.)

Vokac makes a sturdy point and his concerns are not unfounded. This year, in a move to tackle an acute mariner shortage accentuated by the rapid retirement of boomers, Canada signed an unprecedented agreement with the Philippines, allowing Filipino merchant mariners to serve on Canadian-flagged vessels in the Great Lakes. An influx of labor accustomed to lower wages will improve the bottom lines of shipping companies and, as Norton points out in his interview, could reinvigorate the unions with new membership but would likely keep wages for existing MEBA suppressed below the rate of inflation.

And that’s the critical point. Few have agreed that this plan will depress American wages in absolute terms. The question is, will an influx of labor from overseas freeze wages at current rates and lower them relative to inflation and related industries?

Adam Vokac’s statement also highlights the stark contrast in compensation within the maritime industry, particularly focusing on Sam Norton’s substantial earnings as the CEO of Overseas Shipping Group. Vokac underscores the fact that while Norton received over $2.3 million in annual compensation by the end of 2021, his mariners, who mostly are not union members, earn only a fraction of this amount. This disparity becomes even more pronounced considering the challenging and often perilous conditions under which these mariners operate, including recent trips to the shores of war-torn Israel.

Vokac’s emphasis on Norton’s earnings is not just a critique of the wage gap but also a call to reevaluate the distribution of profits within the industry. It raises critical questions about the priorities of maritime companies and the value placed on the skilled labor of mariners who are essential to the functioning and success of such enterprises.

Norton’s Response

Sam Norton, Chief Executive Officer and President of OSG

“The suggestion that US mariners are under-compensated and that simply raising wages will solve all problems fails to address the core issues head-on,” said Norton in a statement published to LinkedIn. “The issue is far more complex.”

The mariner shortage is a crisis demanding solutions. Cooperation among all stakeholders to accelerate these solutions is necessary. The suggestion that US mariners are under-compensated and that simply raising wages will solve all problems fails to address the core issues head-on. The issue is far more complex.

The idea of sponsoring qualified foreign mariners for citizenship is but one idea amongst many intended to address the current labor shortage. The concept is to develop and implement a targeted visa program, offering a fast track to citizenship, for individuals with specialized skill sets to bridge the gap between current shortfalls and the development of long-term US merchant maritime needs. Immigration as an option is not proposed as a means to use foreign labor to depress wages and benefits or to supplant the existing workforce. Recipients of any such visa would receive wages and benefits as they exist on US flag vessels.

The broad vision is for an expanded and effective US flag fleet supporting economic and national security. More ships and more jobs in the long run – that should be the focus in preserving the future of US maritime.  Exploring all options to achieve this vision should be a priority.

Statement by Sam Norton, President and CEO at Overseas Shipholding Group, posted via LinkedIn

On the other hand, Sam Norton’s response to the crisis highlights a more pragmatic and immediate approach to the mariner shortage. Norton doesn’t dismiss the issue of fair compensation but suggests that the problem is more complex and cannot be resolved solely by increasing wages. His proposal to sponsor qualified foreign mariners for citizenship as part of a targeted visa program is presented as a temporary solution to bridge the current labor gap. Norton emphasizes that this is not an attempt to replace the American workforce or suppress wages, but he claims it’s a necessary step to address the urgent need for skilled mariners. He envisions a future where an expanded U.S. flag fleet leads to more ships and jobs, thereby strengthening the economic and national security of the United States.

Norton makes valid points but he fails to respond to the core of the editorial. That is the fact that wages for US Merchant Mariners have been stagnant for decades particularly in the senior officer ranks. He does not mention rising inflation or the fact that other unionized segments of the transportation industry – notably trucking and aviation – are respond to economic conditions with large increases in pay. He says that recipients of visas would receive wages and benefits as they exist on US flag vessels but ignores the obvious truth that doing so would help his company – which has has greatly benefited from inflationary pressures with shares rising over sixty percent this year – keep wages suppressed at currently low levels.

This debate touches on several critical issues: the balance between protecting domestic labor and addressing immediate labor shortages, the role of government and industry in supporting national industries, and the long-term strategic planning necessary for the growth and sustainability of the U.S. maritime sector. Vokac’s focus on bolstering American labor aligns with a broader narrative of national self-reliance, while Norton’s approach reflects a globalized perspective on labor and the need for flexible, short-term solutions to immediate challenges.

Not A Black Swan Event

SINGAPORE (July 2, 2022) – Military Sealift Command mariner Joe Marges, from Guam, assigned to the Emory S Land-class submarine tender USS Frank Cable (AS 40), heaves line as Frank Cable departs Singapore July 2, 2022. Frank Cable is currently on patrol conducting expeditionary maintenance and logistics to support national security in the U.S. 7th Fleet area of operations. (U.S. Navy photo by Mass Communication Specialist 2nd Class Kaitlyn E. Eads/Released)

Both statements overlook that today’s crewing crisis is not a sudden, unpredictable event. It has been a looming issue – precipitated by the retirement of the baby boomer generation – extensively recorded for more than a decade. Seven years ago, when Norton assumed leadership at OSG, the US Maritime Administration spotlighted the problem, following MARAD’s 2016 emergency Maritime Workforce Working Group report initiated by Commandant Mark Buzby who, like Paul Revere, toured the country sounding the alarm. Buzby also provided solutions in a detailed report to Congress but very few of his suggestions have been adopted by shipping executives and union leaders.

Related Article: SOS – Are Boomers To Blame For The Shipping And Supply Chain Crisis?

Both shipping companies and unions could have slowly raised wages over the past twenty years, fought the US Coast Guard and US Maritime Administration policies that have caused the Hawsepipe (the once popular route crewmembers without college degrees took to advance into the officer ranks) to close, improved working conditions aboard ships, halted sexual harassment, provided shoreside opportunities for captains and invested in media and communication tools needed to encourage America’s youth to join the profession. Countless voices sounded the alarm over the past decade but very little was done. Now that an emergency is upon us – at a time when the US Merchant Marine is faced with a geopolitical crisis and massive sealift efforts to help Ukraine and Israel – hitting the easy button on foreign labor like Canada just did seems like a rational option.

Norton’s statement is highly rational and well laid out until you put it in the context of a long-in-coming and well-documented problem. His argument that OSG is willing to pay American wages also sounds rational to those who think American mariners are overpaid compared to other deep-sea labor like US Navy officers or highly educated and specialized foreign flag crew. That was certainly the case in previous decades but is no longer a valid argument. Norton does not need to lower wages to increase profits he simply needs to keep wages at current levels while inflation and geopolitical tensions – dangerous tensions that some OSG mariners, like those who recently docked in Israel – are exposed to at much higher degrees of danger than most other seafarers – push freight rates and profits higher.

Is The Problem More Complicated Than Pay?

Norton is correct about one thing, the issue is far more complex than stagnant wages. It also encompasses executive compensation, high levels of inflation, an aging fleet of US-flagged ships that result in higher workloads for crews, and a precipitous increase in life-threatening dangers today – and tomorrow’s – US Merchant Mariners face. It also doesn’t account for the stress and pressures all of these problems put on families as mariners face danger while they are increasingly asked to work overtime.

Pay won’t solve all those problems but increasing wages to match inflation is a low hurdle, especially considering that inflation, while diminishing the real value of wages, has paradoxically lessened the relative burden of corporate debt, increased freight rates, and bolstered profits and share prices.

What will solve the problem is upward mobility. Many mariners contemplating a departure from the field are driven by the disproportionate investment required for career advancement – notably in terms of the rapidly increasing financial cost of attending a maritime academy and the time commitment required for Chief Mate upgrade license courses. The rapidly escalating expense of higher education, the constriction of traditional pathways like the hawsepipe, and the extensive training necessary to ascend to senior officer roles are significantly out of balance with the incremental pay rises offered for promotion to chief mate or master. This disparity is compounded by the additional responsibilities and workload that accompany such promotions, making the prospect less appealing.

In stark contrast, shoreside transportation jobs are more effectively adapting to the economic climate, with compensation packages that not only keep pace with inflation but also offer clearer and more accessible career progression. This is even more pronounced for engineers who are in great need as America near-shores and reindustrializes. This discrepancy is further highlighted by the stagnation of maritime union contracts, which fail to reflect the current economic realities.

Greatly increasing pay may not solve the problem but matching inflation and the wage increases of shoreside industries is a clear and present necessity.

Future Mariners Do Not Care About Award Dinners

Midshipmen listen to instructions from Petty Officer 1st Class Eric Pease, electrician’s mate, while on Yard Patrol Craft 696 in the Chesapeake Bay. US Navy Photo

Norton’s response and my own editorial all overlooked one crucial aspect Vokac highlights in his statement: the perspectives and informational needs of today’s youth contemplating careers in the maritime industry. As the father of a high school senior, I witnessed firsthand how this generation, arguably the most well-informed in history, engages with career choices. My son, like many of his peers, heavily relies on digital platforms like YouTube and TikTok for insights. In his research on aviation, he encounters a plethora of content – enthusiastic pilots extolling the virtues of their profession, influential union leaders, and CEOs, even high-profile government figures like Secretary Pete Buttigieg, all sharing predominantly positive narratives about the aviation industry. When he researches the US maritime industry on YouTube he finds very little.

This starkly contrasts with the scarcity and tone of content available on the U.S. Merchant Marine. The limited number of shipping videos my son finds are often overshadowed by extensive lists of (mostly) legitimate grievances on social media platforms such as Reddit, Instagram, and the gCaptain forum not to mention the paucity of deep-sea job listings from entities like OSG and MEBA who don’t invest much in marketing. These grievances paint a less-than-favorable picture of the maritime industry.

This discrepancy in online representation is not just a matter of perception; it has real implications for attracting young talent to the maritime sector. While aviation leverages digital media to create an appealing and engaging image, the maritime industry seems to lag, failing to communicate its value and opportunities to the new generation effectively. Therefore, to remain competitive and relevant in the eyes of potential recruits, the maritime industry must adopt a more proactive and positive digital media strategy that accurately reflects the opportunities and advantages of a maritime career. This approach is essential for attracting fresh talent and ensuring the long-term sustainability and growth of the industry.”

The youth this industry wants to attract are well-researched and intelligent. They want to see well-compensated and happy captains on YouTube that they can look up to as role models. They want to see industry leaders who show them a clear path to the top and solid compensation for those willing to put in the work. Today it’s difficult for them to find much from industry leaders beyond self-congratulatory posts on LinkedIn from one of the industry’s dozen black-tie award dinners. Young adults don’t care about industry awards. They want to see more industry leaders like Dr. Sal Mercogliano and Captain Kate McCue speaking honestly on YouTube.

Many overseas companies like Maersk, are capitalizing on the potential of marketing through YouTube videos featuring insights officers like Captain Thomas but I haven’t seen any videos from MEBA Chief Engineers of OSG Captains. The small number of U.S. Merchant Marine officers who share positive videos online, such as Madeleine Wolczko on Instagram and Joe Franta on YouTube, could significantly enhance the quality and reach of their content with support from unions in acquiring professional video equipment, hiring editors, and advertising their work on industry websites. This strategy represents an inexpensive but highly valuable opportunity that both Norton and Vocak are overlooking.

Norton aptly identifies that the challenge extends beyond merely increasing wages, pointing out the multifaceted nature of the issue. He rightly emphasizes the urgency of finding immediate solutions rather than deferring action to a future date, such as five years hence when my son will be graduating from college. Today’s well-informed generation closely looks for industry trends, especially the significance of wages keeping up with inflation. They understand the divergence in corporate wealth and wages. Although pay and advancement opportunities are not their only considerations, these factors are crucial prerequisites for attracting their attention.

Without fair wage increases and clear paths to advancement, marketing won’t matter. They will vote with their feet.

Conclusion

In this compelling debate that could chart a new course for the U.S. Merchant Marine, the contrasting stances of Adam Vokac and Sam Norton embody the multifaceted challenges facing this crucial industry. Vokac’s ardent defense of American maritime labor against the backdrop of Norton’s pragmatic yet controversial proposal for foreign labor integration marks a defining moment for the sector. The dialogue transcends mere policy discussion, touching on deeper themes of national identity, economic equity, and the valor of those who brave the seas under the Stars and Stripes.

Vokac’s impassioned plea for prioritizing American mariners and Norton’s strategic vision for immediate labor shortage solutions reflect the broader dilemma of balancing domestic workforce protection with the industry’s urgent needs. Both perspectives bring to light the stark realities of a long-ignored crisis. The maritime industry, vital to both economic stability and national security, now finds itself at a critical juncture, demanding decisive action and visionary leadership.

This discourse reveals that the problem extends beyond stagnant wages; it encompasses a wide array of issues including executive compensation, inflation’s impact, the aging U.S. fleet, increasing workloads, and the increasing dangers faced by mariners. These factors, combined with the mounting pressure on seafarers’ families, paint a picture of an industry at a crossroads.

Increasing US Merchant Marine pay to match inflation – not to mention the increasing dangers and workloads at sea – won’t solve these problems but it certainly couldn’t hurt retention and would still be far behind recent increases in unionized aviation and truck wages. Wages that match inflation appear to be a reasonable ask for unions or anyone who has looked at the financial statements and recent stock performance of American shipping companies like Matson (up 56% this year), Tidewater (up 82%) and Overseas Shipping Group (up 64%).

Related Editorial: U.S. Shipping CEO Calls for Foreign Seafarers Amidst US Merchant Marine Pay and Crewing Crisis

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