The U.S. Navy’s May 2026 shipbuilding strategy, endorsed by Acting Secretary of the Navy Hung Cao, frequently emphasizes “innovation.” This term is applied to several key initiatives, including the Columbia-class submarine, medium landing ship acquisition strategies, and modernized management of public shipyards. Additionally, the plan notes that wage increases at Electric Boat and Newport News Shipbuilding have helped these facilities meet their 2025 hiring targets and reduce attrition by two to five percent.
While increased funding addresses the visible symptoms of shipyard worker shortages, it falls short of a long-term, innovative solution. The industry still faces a deficit of 174,000 workers. Current wage hikes primarily benefit those already employed within the shipyard ecosystem, failing to reach the broader pool of potential candidates who cannot afford to forgo income during unpaid training periods. To reach workers currently employed in other sectors—such as retail—the Navy requires a new model: an intermediary capable of providing compensation during the transitional training period between jobs.
The Navy could bridge this gap by prioritizing programs that successfully attract new entrants, redirecting recruitment funds to provide stipends for trainees, and empowering each shipbuilding region to appoint an accountable intermediary to manage localized training efforts.
Beyond the Shipyard Perimeter
The necessity for shipyard labor is undeniable. In April, the Government Accountability Office informed a House panel that none of the seven yards responsible for Navy shipbuilding are currently positioned to meet delivery goals, citing workforce shortages and infrastructure limitations as primary obstacles.
While the Pentagon’s acquisition and sustainment office has made strides through regional Talent Pipeline Programs—placing over 15,000 workers with more than 500 suppliers since 2021—and the Southeastern New England Defense Industry Alliance’s training of 10,000 individuals, more work remains. Legacy institutions like Newport News’s Apprentice School have provided steady training since 1919, but the scale of the current demand requires more aggressive outreach.
Major contractors are currently prioritizing experienced tradespeople over entry-level recruits. For example, Huntington Ingalls Industries shifted its focus toward hiring experienced workers in early 2025. With first-year attrition rates across the yards reaching 50 to 60 percent, it is a rational, albeit short-sighted, business move for large yards to bid for established talent while neglecting the entry-level pipeline. This leaves the bottom end of the labor market largely untapped.
The Opportunity for Career Transition
A significant wage gap exists between retail and industrial roles. In May 2025, Bureau of Labor Statistics data showed median pay for cashiers and fast-food workers hovering around $32,000 to $33,000. In contrast, entry-level welders at Newport News can now earn near $57,000 following recent wage adjustments. While the long-term earning potential is high, the immediate barrier is the loss of income during the training phase. A worker living paycheck-to-paycheck cannot easily transition to a new career if they must choose between attending classes and maintaining their current employment.
A solution would involve offering flexible training, such as early-morning sessions that allow workers to attend classes before their regular shifts. However, because many community colleges are funded based on student headcounts, there is little institutional incentive to offer specialized, low-enrollment schedules for working adults.
The Navy’s current spending also shares this limitation. While hundreds of millions are spent on submarine recruiting campaigns and classroom seats, very little is directed toward the financial stability of the trainee. Even the most comprehensive existing programs often leave students to cover essential living expenses that a regular paycheck would otherwise provide.
The Need for a Regional Intermediary
A functional model for workforce transition requires a “regional intermediary” to manage the risk and logistics of paid training. This entity—which could be a supplier association, a chamber of commerce, or a specialized non-profit—would act as the bridge between employers (specifically smaller second- and third-tier suppliers) and working adults. The intermediary would manage short-term, paid training programs that conclude with guaranteed placement and agreed-upon wages.
While historical data from programs like WorkAdvance shows that targeted sector training can significantly increase earnings, many of these programs focus on the unemployed or the youth. The Navy’s specific challenge is the “career switcher”—the adult who must leave a stable, albeit lower-paying, job to pursue a higher-paying industrial career. No large-scale program has yet successfully mastered the recruitment and support of this demographic.
Funding the Transition
New initiatives like “Workforce Pell” can cover tuition, but they do not address the “wage gap” during training. The Navy has the opportunity to implement a “wage bridge.” For example, providing approximately $11,000 to cover fifteen weeks of training would be a highly efficient use of funds. Given that the Navy’s submarine recruiting campaign spent roughly $100 million in a single year to produce approximately 9,700 hires, redirecting a portion of that budget toward direct trainee stipends would be a more effective investment in long-term retention.
To ensure accountability, these “wage bridges” should be tied to strict performance metrics: a high percentage of program completion, successful job placement, and verifiable increases in worker earnings.
Strategic Implementation
The Department of the Navy can drive this change through three primary actions:
1. **Enhanced Data Reporting:** Require all Navy-funded workforce programs to report the prior-year and post-program earnings of participants. This would allow the Navy to distinguish between programs that simply “poach” existing welders and those that successfully recruit from lower-wage sectors.
2. **The Wage Bridge:** Implement direct financial support for trainees to offset the loss of income during the transition period, treating it as a recruitment investment rather than a marketing expense.
3. **Regional Empowerment:** Allow each shipbuilding region to designate its own intermediary to serve both the major yards and their smaller suppliers. This ensures that the solution is tailored to local economic and educational ecosystems.
For decades, the Navy’s training systems have catered to those already looking for industrial work. To solve the current shortage, the Navy must reach the workers who are not currently in the market—the retail employees and service workers forty miles away—and provide them with a viable, supported path into the shipbuilding industry.
Michael Gilroy is vice president for workforce development at the Center for Regional Economic Competitiveness in Arlington, Virginia, where he supports the Department of Defense’s manufacturing workforce programs. A retired Army officer and graduate of the Naval War College, he previously directed workforce programs at both the Departments of Labor and Defense.
Image: Wendy Hallmark via Naval Sea Systems Command.
