Earlier this month, Jack Roney, an economist for the American Sugar Alliance (ASA), travelled to the U.S. International Trade Commission (ITC) to testify, in person, about the economic impact of restricting subsidized foreign sugar imports.
Large candy companies, which want subsidized sugar imports to flood the U.S. market and replace domestic supplies, didn’t send a representative to testify. Instead, they submitted a paper more than a week later.
Big Candy’s written arguments for outsourcing America’s sugar industry went something like this: U.S. sugar policy makes sugar prices high, which has led to massive job loss by U.S. manufacturers of sweetened foods since 1997.
Sounds damning. But, there’s a few holes in that argument worth noting.
First, food manufacturers are paying less for sugar today than they did 20 years ago, not more – 28.5 cents per pound in Feb. 2016 vs 29 cents in Feb. 1997, according to USDA data.
Are food makers saying lower sugar prices have led to job loss? Seems a bit nonsensical. In fact, you’d expect lower ingredient costs to lead to expansion, which is exactly what has been happening in the candy industry in recent years.
ASA has diligently kept a running list of the more than 100 reports of job growth in the candy sector over the last 5 years, and we’ve published it online for easy access to all.
Second, aren’t manufacturing jobs in general down sharply since 1997? Yes, they are.
Overall manufacturing employment is down by one-third since then, according the Bureau of Labor Statistics, as American manufacturers automated and relocated for cheap labor, lower taxes and reduced regulatory burdens.
In other words, the few confectioners that fled the country weren’t alone, and candy makers experienced less contraction than other U.S. manufacturers over the same period.
And if you use more timely and relevant data for the analysis – for example, the 2007 Census instead of the 1997 Census – you’d see almost no job loss in major sugar-containing product categories, such as chocolate, candy, cookies, cakes and ice cream.
Finally, the job categories profiled in the confectioners’ ITC analysis seemed suspect to us – almost as if things were included to make the numbers sound far worse.
Here’s what we mean: More than 23,000 of the 123,000 jobs lost in that analysis come from soft drink and ice manufacturing. High fructose corn syrup, not sugar, sweetens the vast majority of soft drinks. And there’s no sugar in ice, just 100 percent H20.
Of course, sugar isn’t exactly a major ingredient in pasta, pickled vegetables, frozen fruit, or roasted nuts either – all of which were also included in Big Candy’s critique of America’s no-cost sugar policy.