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defense industry

The U.S. Navy Needs More Ships. Shipyard Workers Are Winning Bigger Paychecks.

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Higher pay can make Navy shipyard jobs more competitive, but it is not yet proof that more ships will be built. Reports in 2026 describe substantial union wage increases at three major yards—NASSCO in San Diego, Bath Iron Works in Maine and Ingalls Shipbuilding in Mississippi. Those agreements address a real workforce constraint, while ship production also depends on training, working conditions, facilities and other capacity limits.

Why shipyard pay matters to Navy shipbuilding

Building complex warships requires skilled tradespeople, including welders and electricians. Shipyards compete with other employers for those workers, and the jobs can involve tight, uncomfortable spaces. The 2026 report says attrition is particularly high among early-career workers, making recruitment and retention central concerns for the yards.

John Phelan, identified in the report as Navy secretary until late April 2026, argued that wages are a major part of the problem. He said, “I think this is really an issue of wages, to be honest,” and contrasted shipyard work with jobs at convenience stores or Amazon. His view helps explain the case for raises; it is not a measurement showing that pay alone determines whether workers stay.

Pay is one part of the employment offer. The report also points to healthcare, retirement, flexibility, working conditions and leave, as well as practical issues such as commuting. At NASSCO, it describes a difficult commute for some workers. A stronger wage offer may help, but those other factors can shape whether a job is attractive and sustainable.

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What the reported agreements include

The following terms were reported in 2026 copies of a story attributed to Business Insider. Those copies reproduce the same reporting, rather than independently confirming one another, and signed agreement texts were not available in the cited accounts. Treat the figures as reported contract details, not independently verified contract language.

Shipyard and location Reported wage schedule Other reported details
General Dynamics NASSCO, San Diego 10% in year one, 5% in year two and 4% in year three. Reported to cover more than 800 workers; retirement benefits, floating time off and worker protections also changed.
Bath Iron Works, Maine 17% in the first year, followed by 4% in each of the next four years. Reported to cover more than 4,500 workers and to improve retirement benefits.
Ingalls Shipbuilding, Mississippi An immediate base-wage increase of at least 18%; total wage growth reported at 35% to 47% through 2031. The reports describe the figures for union-represented workers but provide no comparable detail here on other provisions.

The schedules are not directly comparable: they cover different periods and the reports do not present identical details about all contract provisions. The Ingalls figures, in particular, distinguish an immediate increase to base wages from total growth through 2031; the latter should not be read as a single one-time raise.

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Raises address a bottleneck, not the whole production problem

The agreements can improve the competition for experienced workers if the reported terms make shipyard jobs more attractive. But a contract announcement cannot by itself show that fewer workers will leave, that hiring will accelerate, or that a yard will deliver ships sooner. The 2026 accounts do not establish those outcomes.

The scale of the experience challenge is illustrated by a comparison attributed to HII senior vice president of government relations Tom Moore: an HII electrical supervisor averaged more than 20 years of experience in the mid-1990s, compared with about four and a half years as of February 2025, described in the report as “February last year.” Moore called that loss “a lot of lost experience.” This is a comparison about the average experience of an electrical supervisor, not a workforce-wide statistic for every shipyard or a measure of what these new contracts have changed.

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Other responses described in the report include targeted hiring, expanded training, transportation support, infrastructure investment and automation. These efforts address different constraints: wages affect the hiring offer, training develops skills, transportation can make a workplace more accessible, and facilities and automation can affect how work is organized. None is interchangeable with the others.

Acting Navy Secretary Hung Cao said the Navy needed to get the industrial base moving and protect workers. IAM Eastern Territory Coordinator George Edwards said he believed the contract wins would help bring the industry back to where it needed to be. Those comments express the hopes of officials and labor leadership; they are not evidence that production has already increased.

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The meaningful test is whether yards can turn improved employment terms and other workforce measures into a more stable, capable labor force—and whether that capacity translates into better shipbuilding performance. Useful indicators would include reported hiring and retention, worker experience, and delivery performance over time. The accounts covering the agreements do not yet provide a measured before-and-after result for those indicators.

The broader policy challenge is not new: Navy shipbuilding ambitions depend in part on the capacity of the industrial base. A Congressional Research Service report provides historical context on the relationship between fleet plans and shipbuilding capacity, but it predates these 2026 labor agreements and cannot verify their terms or effects: Congressional Research Service, Navy Force Structure and Shipbuilding Plans.

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