OK, I realize it’s the Wall Street Journal and not the Main Street Journal. And that the paper’s focus is on Big Business not Family Farms. But the editorialized notion in a recent article that it’s “cheaper sugar” that’s sending “candy makers abroad” is a chocolate-covered absurdity.
When Ronald Reagan was elected president the typical candy bar cost 35-cents and had about 2-cents worth of refined sugar in it. The cost of refined sugar at the time was around 25-cents per pound.
Today, your typical candy bar still has about 2-cents worth of sugar in it and refined sugar still costs around 25-cents per pound.
Yet the cost of that same candy bar is now $1.39.
And we’re supposed to buy the notion that it’s the cost of domestic sugar that’s driving candy makers overseas? Gimme a break.
Even the article itself belies the lie of the story’s proposition. Indeed, Alexandra Wexler notes that one candy company, Jelly Belly, moved operations to Thailand for “access to cheaper sugar, labor and other raw materials.”
Labor. And other raw materials. Not just cheaper sugar. And probably not primarily cheaper sugar.
But the most damning indictment of the premise of the story was this line:
“Financial pressures have grown because rising costs for labor, utilities, packaging, freight and health care in the U.S. make it impossible to lower candy prices when the cost of sugar drops, some candy makers said.”
Indeed, while sugar makes for a convenient scapegoat, the real villains – since sugar costs about the same as 35 years ago – are huge increases in the costs of labor, utilities, packaging, freight and health care…which is only going to get worse as ObamaCare continues to take root.
Indeed, if candy makers are moving operations overseas, it’s not because of a negligible difference between U.S. and world sugar prices – especially after factoring in shipping and refining costs for imported raw sugar – but the massive difference in the cost of – repeat after me – labor, utilities, packaging, freight and health care.
If you really want to keep domestic manufacturing here in the United States – not just for candy makers, but all manner of products – the solution is to give manufacturers some relief in the areas of – hello? – labor, utilities, packaging, freight and health care, not destroy the domestic sugar producing industry.