Walter E. Williams

In Marcus Cook Connelly's spiritual play, "Green Pastures," God lamented to the Angel Gabriel, "Every time Ah passes a miracle, Ah has to pass fo' or five mo' to ketch up wid it," and adding, "Even bein God ain't no bed of roses." That's something our congressmen should think about when they set out to create miracles.

George Will wrote an insightful article in the Feb. 12 Washington Post titled, "Sweet and Sour Subsidies." He might have just as well titled it, "Shooting Ourselves in the Foot."

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.

You might ask: "How come sugar's cheaper in Canada? Are they a free trade country?" The answer is a big fat no. It's just that they don't have much, if any, of a sugar industry, and hence there's little pressure on the Canadian Parliament to enact protectionist measures.


Walter E. Williams

Dr. Williams serves on the faculty of George Mason University as John M. Olin Distinguished Professor of Economics and is the author of 'Race and Economics: How Much Can Be Blamed on Discrimination?' and 'Up from the Projects: An Autobiography.'
 
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