Q – Reading about these cruise lines that register out of the United States and pay no taxes? Are they really non-American companies and why are we supporting them with our business. What is really going on here?
A – If you look at the five largest cruise lines operating in the United States, you will find that they are all registered in foreign countries including the Bahamas, Panama, and Liberia. By “foreign-flagging”, cruise lines avoid paying the kinds of taxes they would pay if they were US-based corporations. They also do not have to observe our labor laws or even many of our domestic safety requirements. The practice is referred to as “flags of convenience.”
The hard truth is that cruise labor is much like migrant labor – unless it continues, prices for the product will soar. The Hotel and Tour industries wonder why their major competitor is allowed to skirt so many US laws in order to maintain the present pricing levels. James Walker, a prominent maritime attorney, writing for CNN.com, claims that cleaners aboard Royal Caribbean ships are paid “as little as $156.25 a week with no prospect of tips”. If the larger cruise ships were registered in the United States, employed unionized labor, and followed current US labor laws, the entire pricing model of the cruise industry would collapse and, it is likely, so would large portions of the industry.