That Which is Seen, and That Which Is Not Seen

Echos of Bastiat ring in this article: Congressional miracles

Chicago has been home to many of America’s candy manufacturers, but today they’ve fallen on hard times. In 1970, employment by Chicago’s candy manufacturers totaled 15,000, and now it’s 8,000 and falling. Brach used to employ about 2,300 people; now most of its jobs are in Mexico. Ferrara Pan Candy has also moved much of its production to Mexico. Yes, wages are lower in Mexico, but wages aren’t the only factor in candy manufacturers’ flight from America. After all, Life Savers, which for 90 years manufactured in America, has moved to Canada, where wages are comparable to ours.

One of the ignored stories in the clamor and demagoguery over job losses, not only in the candy industry but in others as well, is the devastating impact of congressionally created “miracles” on our industries. American sugar producers fight tooth and nail to keep foreign sugar imports out of our country. They’ve spent $722,000 in campaign contributions to both Democratic and Republican congressmen to enact sugar import tariffs and quotas.

As a result of their successful effort to get Congress to do their bidding, our domestic sugar prices are about three times higher than the world market price. While that’s a miracle for the sugar industry and its employees, unfortunately, the miracle story doesn’t end there. We all know that for every benefit there’s a cost.

According to the Sugar Users’ Association, an organization that represents companies who use sugar as an input, such as candy manufacturers, the protectionist miracle that Congress has created for the sugar industry has cost anywhere from 7,500 to 10,000 jobs in sugar-using industries due to higher sugar costs. Higher sugar costs make U.S. candy manufacturers less competitive in both domestic and world markets. Life Savers became more competitive simply by moving to Canada — it saved itself a whopping $10 million dollars a year in sugar costs.

This isn’t rocket science, people. Economics is simple cause and effect. When you increase the price of something, someone has to pay it. If you increase the price too much, it is easier for someone to go someplace else to buy it cheaper.

The government rarely accounts for That Which Is Not Seen.

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