Saturday, December 27, 2003

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Protectionism never tasted so sour


The Chicago Tribune had another story this week on the outsourcing of American manufacturing jobs. The cause? American protectionism:

BRYAN, Ohio -- Here in what could be called the candy cane capital of the world, residents like to boast that food doesn't get more American than this old-fashioned, red-and-white striped confection.

That's because more than 90 percent of those peppermint canes are consumed within the United States. And nearly all were made domestically as well.

But no more.

In the last three years, nearly half of all U.S. candy cane production has shifted to Mexico, industry experts say.

That's true of the candy cane maker based in this northwest Ohio town, Spangler Candy Co., which recently opened a plant in Juarez that generates half of Spangler's striped treats.

But the story of the Mexican candy cane isn't your typical tale of American manufacturers chasing lower wages. It's more about the cost of sugar than the cost of labor.

Because federal tariffs and subsidies push the price of U.S. sugar far above what it fetches on the world market, candy cane makers such as Spangler are opening factories overseas, where sugar can cost 6 cents a pound compared to 21 cents back home....

Other makers of hard candy have followed a similar pattern, at least in part because hard candy, unlike chocolates which can use corn syrup substitutes, are so sugar-intensive.

In Chicago, for example, Brach's Confections plans to shut its plant in 2004, forcing about 1,000 workers out of their jobs. The Chicago area, the center of the U.S. confection business, has lost an estimated 3,000 candy-related jobs since 1998.