Why we need more ships

There are two problems facing the economy right now: unemployment and the deficit. Meanwhile, both the Navy and experts at the Department of Defense maintain that we need at least 313 [1] ships for our navy to remain the most powerful in the world, compared to the current total of 286. As the main focus of our geopolitics shifts to the Indian Ocean and the South China Sea, one thing becomes apparent: we need more ships. Thankfully, we now have an opportunity to kill three birds with one stone.

Even with recent advances in technology, shipbuilding remains a labor-intensive industry. For example Ingalls Shipbuilding, a mid-size shipyard in Mississippi, is the largest private employer in the state, employing over eleven thousand workers. [2] Like most other heavy manufacturing industries, shipbuilding creates additional jobs as local services, like restaurants and gas stations, needed to support the shipyards. In the case of Seaspan Marine corp., in British Columbia, the construction of a shipyard that employed 1,000 residents created an additional 3,000 jobs nearby. [3]

Despite the common perception that heavy industry jobs are low paying and require no expertise, modern shipbuilding requires mostly skilled workers, such as shipwrights, electricians, and millwrights, which all require years of training and are highly transferable trades. The industry also requires highly skilled workers, such as marine and computer engineers and health officers.
However, much of the benefit of shipbuilding is very indirect. Ships require an enormous supply chain of parts, most of which are located in the United States. Thus shipbuilding creates enormous amounts of jobs in a way that few other industries can. [4]

The benefits to national security of more warships are obvious. Nevertheless, merchant vessels are also required for our security. In a future major conflict, which most experts expect to be naval, losses to US merchant shipping would be severe, and there is no guarantee that foreign shipyards will be willing to rebuild American shipping. Also, in a conflict ships in the United States Merchant Marine can be called up to transport troops and supplies. Further, technologies developed in merchant shipyards can and do transfer to improving military ships (such as high speed ferry technology being used in the Independence class Littoral Combat Ships), and merchant shipyards can be repurposed for building, refitting and repairing navy ships.

How this creates jobs and would increase national security seems clear. Reducing the deficit, however, is not quite as clear. The addition of a great number of jobs means a great amount of tax receipts. Although the expense required to build shipyards and ships will be great, the tax revenues will eventually surpass the initial investment.

There are several possibly criticisms of such a policy, namely that shipbuilding can be replaced by other heavy industries that the US already dominates, and that foreign shipyards, namely those in Korea (who produce the majority of merchant vessels) will undercut American shipbuilding.
What sets shipbuilding apart from other heavy industries like automobiles and aviation is that while the US currently dominates most other industries with little threat from foreign nations, shipbuilding is one of the few industries where the US lags. GM and Boeing are still the largest companies in their field, but only one American-flagged vessel has been laid down in the past decade. Since this industry is so critical to our national security and our prosperity (90% of trade travels by sea) we must keep it strong. Also, the complexity of ships means that their parts chains are larger than those for other industries, spreading the benefits further.

While it is true that most merchant ships are now built in Korea, there is little reason this has to be the case. America has a long history of shipbuilding, and currently has several massive shipyards, albeit for military vessels. All that is required is an influx of capital from the federal government.
Thus, I propose two fairly simple things: provide funds and incentives for the construction of merchant shipyards on American soil and give shipbuilders an incentive (both monetary and in the form of guaranteed protection from US Navy warships) to register their ships under the American Flag.

Citations1 http://www.military.com/forums/0,15240,187044,00.html Navy Surface Force in Deep Trouble
2 http://www.huntingtoningalls.com/is/about_us/about_us.html Ingalls Shipbuilding
3 http://www.vancouversun.com/life/Shipbuilding+boom+creates+demand+qualified+workers/5718883/story.html Shipbuilding boom creates demand for qualified workers, The Vancouver Sun, 16 November, 2011
4 http://www.boilermakers.org/resources/commentary/V41N3 We Must Build More Navy Ships