Navy Secretary warns workers can make more at Amazon instead of building America’s warships: ‘It’s hard to get that person to want to do that job’

U.S. Navy Secretary John Phelan warns that reviving the $37.3 billion U.S. shipbuilding industry and expanding capacity is being hampered primarily by low wages that make welding and shipyard work uncompetitive with air‑conditioned retail and fulfillment jobs, undermining recruitment despite policy efforts to boost output. The sector, which supports about 110,000 workers, has declined amid shifting government priorities and subsidy cuts and now faces intense competition from Asian yards—China’s largest state shipbuilder moved more tonnage in 2024 than the U.S. has since World War II. With broader blue‑collar labor shortages across manufacturing, trucking and emergency services and large numbers of open skilled positions (Ford cites 5,000 open mechanics), Phelan’s comments—and job listings showing shipyard pay roughly $21–30/hour versus comparable $15–25/hour at Buc‑ee’s or ~$23/hour at Amazon—underscore that without higher pay or improved job appeal the Navy’s shipbuilding expansion will be difficult to achieve.

Analysis

At his February confirmation hearing Navy Secretary John Phelan said he was handed a "shipbuilding, shipbuilding, shipbuilding" mandate and has spent the past seven months cutting inefficiencies and encouraging competition to expand capacity; he is the first Navy Secretary in 15 years without military experience. Speaking at a defense conference, Phelan identified low wages as a primary barrier to recruiting welders and shipyard workers, arguing that competing private-sector roles offer similar pay in more attractive conditions.

The article provides concrete wage comparators that underscore this challenge: a Chesapeake Shipbuilding "fabricator and fitter" listing shows $21–$30/hour, Buc-ee’s averages $15–$25/hour, and Amazon fulfillment/transport roles average about $23/hour, while Ford reports 5,000 open mechanic positions that can pay up to $120,000 after training. Pew Research data cited indicate slightly more than half of blue-collar workers view their jobs as "just a job" and only 25% are satisfied with pay, suggesting persistent recruitment and retention difficulties absent higher compensation or improved job appeal.

The shipbuilding sector contributes $37.3 billion to GDP and supports roughly 110,000 workers but has been in long-term decline due to shifting priorities, subsidy eliminations and Asian competition; the Center for Strategic and International Studies notes China’s largest state shipbuilder moved more tonnage in 2024 than the U.S. has since WWII. Without credible plans to raise pay or materially improve recruitment, the Navy’s expansion faces capacity and cost headwinds that could delay deliveries or increase program budgets.

Key Decisions for Investors

• Temporarily limit incremental exposure to pure-play U.S. shipbuilding contractors until the Navy or Congress specifies funding or wage-incentive measures that would materially improve recruitment and capacity
• Monitor near-term signals — Navy procurement announcements, Congressional appropriations, or firm-level wage increases — and add exposure only if there is clear commitment to elevated labor compensation or effective retention programs
• Favor defense suppliers and contractors with diversified manufacturing footprints or demonstrated ability to pay market-competitive wages that reduce single-point labor risk
• Track blue-collar hiring indicators and posted wage data (e.g., fabricator $21–$30/hr; Amazon ~$23/hr; Buc-ee’s $15–$25/hr) as a real-time gauge of upward wage pressure that could compress contractor margins or require higher program budgets