Tuesday, February 02, 2010

Annual Cost Per Sugar Farm Job Saved = $826,000

A few days ago, I posted about tariffs doubling U.S. sugar prices (see chart above) and how those artificially high prices impose huge economic costs on the U.S. economy ($2.5 billion last year). Thanks to a comment from Ron H., I found a research paper "Employment Changes in U.S. Food Manufacturing: The Impact of Sugar Prices," that was published by the U.S. International Trade Commission in 2006. Here is a summary of the findings:

1. Employment in sugar containing products (SCPs) industries decreased by more than 10,000 jobs between 1997 and 2002 according to the BLS. Approximately 6,400 of these job losses can be attributed to confectionery plant closings and relocations abroad, where high U.S. sugar prices were cited as a significant contributing factor. During the same period, non-SCP food manufacturing employment grew by 31,326.

2. Approximately 987,810 people worked in sugar-using industries as of 2002. In contrast, there are 61,000 full-time equivalent jobs involved in the growing and harvesting of sugarcane and sugar beets. Studies suggest that the U.S. sugar program helps to maintain approximately 2,260 of these sugar industry jobs, many of which are growing and harvesting jobs,
at an annual cost per job saved of $826,000. Therefore, the total economic cost to the U.S. economy of those jobs saved is about $1.9 billion per year.

3. For each one sugar growing and harvesting job saved through high U.S. sugar prices, nearly
three confectionery manufacturing jobs are lost.

4. For the confectionery industry in particular, evidence suggests that sugar costs are a major factor in relocation decisions because high U.S. sugar prices represent a larger share of total production costs than labor. In 2004, the price of U.S refined sugar was 23.5 cents per pound compared to the world price at 10.9 cents.

5. Many U.S. SCP manufacturers have closed or relocated to Canada where sugar prices are less than half of U.S. prices and to Mexico where sugar prices are about two-thirds of U.S. prices.

6. Plant closings and relocations have been accompanied by increasing SCP imports, which have tripled from $6.7 billion in 1990 to $18.7 billion in 2004.

23 Comments:

At 2/02/2010 3:42 PM, Blogger Paul said...

whoa, crop subsidies!! Somebody prepare the fainting couch for Benny.

 
At 2/02/2010 4:08 PM, Anonymous gettingrational said...

Prof. Perry, It looks like Ron H deserves the HT for the link several days ago.

 
At 2/02/2010 4:20 PM, Anonymous morganovich said...

this looks like the study the spanish study of the effects of alternative energy. every job saved/created burns 3-5 others.

this leaves out the horrible externalities of using corn syrup as a sugar substitute. such a high glycemic index sugar is a big contributor to obesity and adult onset diabetes. soda with real sugar in it, while not good for you, is mush better for you than soda with corn syrup.

 
At 2/02/2010 4:55 PM, Anonymous Lyle said...

Actually high fructose corn syrup and sucrose (table sugar) are not that much differnet. HFCS is typicaly 55 to 58% fructose while sucrose is 50% fructose. The remainder is glucose. The sugar tax is also another play to Iowa game because that is how you get nominated to be president, along with corn ethanol. Fructose is the fundamental problem our bodies are not designed to deal with large amounts of fructose, and it is almost as bad for the liver as ethanol. Actually this suggests a new tax on all fructose containing sweeteners to discourage all use of them. Humans existed for a long time without much sucrose until columbus, when the worst slave conditions in history were created in the Caribbean sugar islands. Fructose appears to be as addicting as heroin or morphine, when consumed outside of fruits and vegtables, so if we should legalize and tax opiates and raise the taxes on fructose.

 
At 2/02/2010 4:56 PM, Blogger sethstorm said...

It's the cost of freedom.


Approximately 6,400 of these job losses can be attributed to confectionery plant closings and relocations abroad, where high U.S. sugar prices were cited as a significant contributing factor

Well, if they want to be spiteful and relocate beyond the US's reach, they should not go without punishment for said activity.

 
At 2/02/2010 5:09 PM, Anonymous Anonymous said...

sethstorm,

Remind us all again, how many American jobs have you created?

 
At 2/02/2010 5:16 PM, Anonymous Anonymous said...

... until columbus, when the worst slave conditions in history ...

That statement simply demonstrates how little you know about history. There were more sub-Saharan Africans sold into slavery to the Islamic Middle East than there were sold into the Caribbean. Islamic slavery also lasted longer. Funny thing though, when the slave trade ended in the New World there were still plenty of ex-slaves around, what happened to the ex-slaves of the Islamic Middle East?

 
At 2/02/2010 5:19 PM, Blogger sethstorm said...

Anonymous said...

Remind us all again, how many American jobs have you created?

Not my worry. I don't make it a point of being the Almighty and Unquestionable in business.

 
At 2/02/2010 5:36 PM, Anonymous Benny The Man said...

I once computed that the feds give--bail out-- farmers to the tune of $18,000 per ag worker, every year. $60 billion a year, and rising every year.

Given what ag workers make, this roughly works out to free labor for our ag sector.

What a bucnh of mollycoddled, knock-kneed weakling parasites we have created in rural America.

 
At 2/02/2010 5:36 PM, Blogger juandos said...

"I don't make it a point of being the Almighty and Unquestionable in business"...

Talk about a massive load of Bravo-Sierra in that line, well there you go, hubris at work...

"For each one sugar growing and harvesting job saved through high U.S. sugar prices, nearly three confectionery manufacturing jobs are lost"...

Wouldn't it be great if that's all government jobs cost the private sector?

 
At 2/02/2010 6:58 PM, Blogger sethstorm said...

juandos said at 5:36pm...
Well, you might discount it as BS, but that doesn't mean that it is. Explain that one, as business is willing to be retaliatory if they aren't treated as if they were the Almighty and Unquestionable.

 
At 2/02/2010 8:14 PM, Anonymous Anonymous said...

... if they aren't treated as if they were the Almighty and Unquestionable.

How dare anyone pretend to your throne. You are freakin' delusional. No one owes you anything. Instead of constantly whining that US corporations owe you a living why don't you get off your fat entitled ass and start your own business. Come on! There are millions of Americans waiting for you to step up. Show us all how a real "patriot" does it. Loser.

 
At 2/02/2010 8:20 PM, Blogger QT said...

sethstorm,

"Explain that one, as business is willing to be retaliatory if they aren't treated as if they were the Almighty and Unquestionable."

Sorry, seth, but this looks very much like corporate bashing. Just what evidence do you offer for the "almighty and the unquestionable".

Time to return to the subject at hand: sugar. Do you support the U.S. sugar lobby? All else is diverting but irrelevant.

 
At 2/02/2010 8:35 PM, Blogger sethstorm said...


1. Employment in sugar containing products (SCPs) industries decreased by more than 10,000 jobs between 1997 and 2002 according to the BLS. Approximately 6,400 of these job losses can be attributed to confectionery plant closings and relocations abroad, where high U.S. sugar prices were cited as a significant contributing factor.

QT:
This is what I quoted to explain where I went with the discussion. It is not an "across-the-board corp bashing" that you might suggest. It is targeted to those who think that moving themselves out of the regulatory grasp of the US is any good.

Honest businesses with respect to those who consume sugar as part of their business production(or any other business for that matter) have nothing to fear.


There are millions of Americans waiting for you to step up. Show us all how a real "patriot" does it.

If they're doing everything in their way to not hire US workers, why should I have enough confidence to start a business(much less one that deals with a lot of inputs of sugar)? I'd be dealing with the rules of the US while there would be people for whom can simply sidestep them. It wouldn't matter if I made a safe, wholesome and profitable product.

 
At 2/02/2010 8:49 PM, Anonymous Anonymous said...

U.S. corporations fleeing the Obamanation for Canada??? Bastards! Someone should build a wall. I here they have one in Germany that they aren't using anymore. Hurry, sethstorm, you can probably pick it up cheap.

 
At 2/02/2010 10:21 PM, Anonymous Lyle said...

My source is the book a Splendid Exchange a book on the history of trade. Note that those sold to islamic states were soldiers over time they rose to power (see the Mamluks in Egypt). In the sugar islands the fate was a rapid death. Note that US conditions were far far better than the carribean, due to not growing sugar. A much higher percentage of US slaves had children than the carribean ones, so that today 1/3 of the descendents of slaves are in the us with less than 10% of the slaves being brought to the US. The sugar islands wanted young males and between the chopping grinding and boiling worked them to death (the islands where pure monoculture with food being imported from elsewhere including the US, land was to valuable to be used for anything but sugar.
So while the number enslaved might have been greater in islam and was definitly greater in Rome, the conditions were far better for the slaves.

 
At 2/02/2010 11:17 PM, Blogger QT said...

Sethstorm,

If these businesses are coming to Canada, they are not really escaping regulation or taxation...MX is another story. Labour & plant are pretty similar between the U.S. and Canada, so low sugar prices would offer a comparative advantage...wouldn't they?

Can't really see why high sugar prices and blocking Brazilian ethanol really are great choices for the U.S.? Seems more like a special interest group gaming the system.

 
At 2/02/2010 11:34 PM, Anonymous Lyle said...

Qt it is all pandering to Iowa, and its cacusus. Everyone who wants to be president has to be nice to Iowa, so that you have measures that favor corn consumption being pushed. What would happen if the first event in the primary season were the Alaska cacuses? What would be the favored good.

 
At 2/03/2010 12:34 AM, Anonymous Anonymous said...

Note that those sold to islamic states were soldiers over time they rose to power (see the Mamluks in Egypt).

The Marmelukes were a small select group of slaves mostly from what is now Turkey and Eastern Europe. There were millions of Africans sold into slavery in the Islamic Middle East and enslaved by muslims in parts of sub-Saharan Africa. The condition of their slavery was extremely brutal and their lives were very short. I suggest you read more than one book. Try Murray Gordon's, Slavery in the Arab World And don't forget the enslavement of Hindu's during the muslim conquest of India.

 
At 2/03/2010 7:31 AM, Blogger juandos said...

Excuse me if I don't take your word for this having happened sethstorm: "Explain that one, as business is willing to be retaliatory if they aren't treated as if they were the Almighty and Unquestionable"...

The fact that companies relocate outside of the US in order to continue to make a profit seems to be (though I could be wrong about this) YOUR personal stumbling block...

Businesses are NOT in business (regardless of what some of their advertising might say) just to give people jobs...

sethstorm consider these two postings, the first one from 2003 and the second one from 2009:

From CNET: Who wins in offshoring?

From TPM: Senate Loosens Ban on Offshore Companies with Federal Contracts: (or) Please Piss Us Off Some More, You Bastards

 
At 2/03/2010 8:41 AM, Blogger Paul said...

"I'd be dealing with the rules of the US while there would be people for whom can simply sidestep them. It wouldn't matter if I made a safe, wholesome and profitable product."


Yeah, that's what's stopping you...

 
At 2/03/2010 10:55 AM, Anonymous Anonymous said...

"We need to stand up to the special interests, bring Republicans and Democrats together, and pass the farm bill immediately," Barack Obama declared last November.

[...]

John McCain is the only one of the three remaining major-party presidential candidates who takes a stand against this regressive, market-distorting, trade-disrupting scam. The Arizona senator, who has long opposed agricultural subsidies, recently told voters (in Iowa, no less) that if he were president he'd veto the farm bill because "the subsidies are unnecessary."

Reason

 
At 2/08/2010 6:40 AM, Blogger davidbaer said...

Think about this.
If you really did find a working formula that made you, say $1,000 a week online on average and it kept producing income no matter what, would you want to sell that idea to a bunch of noobs for $47 a pop and expect to retire on the proceeds? No way, man! It does not compute. It does not add up. And it does not make any sense to do that. I certainly don’t go shouting from the rooftops how I make my money online. Hell, I don’t want the competition taking a slice of my pie and neither would anyone who really does make good cash online.

www.onlineuniversalwork.com

 

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