U.S. Navy Secretary John Phelan recently emphasized that the nation’s shipbuilding industry must significantly raise its wage levels if it seeks to both attract and retain a competent and committed workforce. According to Phelan, this issue is not merely about financial compensation in isolation, but about the broader challenge of maintaining a sustainable pool of skilled labor capable of meeting the specialized demands of ship construction—a vital component of America’s defense readiness. His comments align with a growing consensus among senior Navy officials, maritime experts, and leading figures within the shipbuilding sector, who have increasingly identified inadequate pay as one of the root causes behind stagnation and inefficiency within U.S. shipyards. When compensation fails to reflect the technical complexity, physical difficulty, and safety risks of such work, the industry finds it ever more challenging to recruit individuals with the expertise and dedication required for success.
Speaking at a defense-focused summit in Fort Wayne, Indiana, earlier this week, Secretary Phelan—the Navy’s highest-ranking civilian leader—outlined his view of the critical priorities facing the nation’s maritime industrial base. Among these priorities, he ranked improvements in manufacturing capacity, industrial resilience, and workforce conditions as central pillars of lasting naval readiness. Central to that effort, he explained, is the fair and competitive payment of those workers who transform raw materials into the ships and submarines that safeguard American interests at sea. He insisted that compensation is not a minor operational matter but a strategic concern that directly influences the Navy’s ability to execute its long-term programs.
“When I look across states,” Phelan reportedly said, “the fundamental problem comes down to wages.” He illustrated this point with a compelling comparison: an individual can often earn similar hourly pay working at a Buc-ee’s convenience store or inside an Amazon fulfillment center, both occupations that require far less technical training than shipbuilding. For someone faced with the choice between enduring long hours of welding in confined, physically demanding environments and performing more accessible retail or logistics work for equal pay, the incentive plainly tips toward the easier path. This dynamic, he argued, makes it extraordinarily difficult to persuade workers to choose the skilled trades that underpin the U.S. maritime industry.
While Amazon declined to offer a comment to Business Insider about its compensation practices, a representative for Buc-ee’s defended its pay structure, noting that the company ensures its employees are “well-compensated for their hard work and commitment” as part of an effort to attract and retain exceptional service-oriented talent. Buc-ee’s, however, did not provide a detailed disclosure of its employee salary data. According to Indeed, a major employment and recruitment platform, hourly pay for Buc-ee’s general staff typically ranges between $15 and $25 per hour. Amazon’s own figures, released in September, indicate that the corporation’s U.S. fulfillment and transportation employees now earn an average of over $23 per hour.
At present, the precise relationship between those retail and logistics wages and current shipyard pay remains difficult to quantify. Business Insider attempted to reach out to several labor unions representing shipyard employees, but these organizations declined to comment, citing the considerable variability in wages depending on region, experience level, and specific occupational roles. Nonetheless, the Navy Secretary’s remarks underscore what has long been a structural problem within the American maritime sector: low compensation for highly skilled craftsmanship. Defense analysts and maritime policy specialists have repeatedly warned that such pay disparities weaken the talent pipeline necessary for building, maintaining, and modernizing the Navy’s fleet. The argument is straightforward—when individuals can earn comparable or even better pay in less physically taxing, more comfortable jobs, the pool of potential recruits for demanding industrial trades inevitably shrinks.
Experts have suggested a range of complementary remedies that might accompany wage increases, including improvements in quality of life for shipyard employees, modernization of training and apprenticeship programs, expansion of automation to reduce labor strain, better access to affordable housing near shipyards, and the provision of enhanced workplace benefits. Some progress has been reported: Huntington Ingalls Industries (HII), one of the nation’s foremost defense contractors and shipbuilders, recently announced positive developments in increasing both hiring rates and compensation for experienced workers, a step that leadership views as integral to rebuilding institutional expertise.
Phelan reiterated that the challenge extends beyond recruitment alone. Retaining seasoned personnel over the long term is equally essential to cultivating the deep institutional knowledge on which efficient shipbuilding depends. Reports from the Government Accountability Office, the federal government’s nonpartisan auditing body, confirm that U.S. shipyards continue to experience difficulties replenishing the ranks of highly skilled craftsmen who retire or leave the industry. The problem has become cyclical: fewer experienced workers lead to heavier training demands on new hires, prolonged production schedules, and in many cases, increasing costs.
Companies such as Huntington Ingalls have voiced concern over the decline in the average years of experience among their employees—an erosion that has measurable consequences in daily operations. A less seasoned workforce tends to increase turnover rates, extend the time required for training and certification, and gradually erode the accumulated expertise that distinguishes efficient production lines from struggling ones. This trend, many observers note, can be traced back to the post–Cold War decades, when defense downsizing and reduced naval procurement hollowed out the labor base that once sustained steady production. Rebuilding that human capital now stands as a generational challenge—and, according to Navy leaders, a challenge that cannot be overcome without market-competitive pay.
Ultimately, addressing these workforce challenges has become essential to reducing the chronic delays and cost overruns that have plagued some of the Navy’s most ambitious shipbuilding initiatives. By committing to higher wages and investing in regional training pipelines, HII’s leadership says they are beginning to see tangible progress. During a third-quarter earnings call, company CEO Chris Kastner described the current outlook as one of “cautious optimism,” expressing hope that renewed investment in human capital will continue to restore stability and performance across the enterprise. The lesson, as Phelan and others have made clear, is that the future strength of America’s Navy depends not only on advanced engineering and design but on valuing the skilled hands that bring those designs to life.
Sourse: https://www.businessinsider.com/navy-secretary-says-shipbuilder-pay-needs-to-be-more-competitive-2025-11
