Finally, a Federal Jobs Program

Food Label Updates

The Food and Drug Administration announced this week that they were seeking to update the standard nutrition label found on most food products sold in the United States.  It is expected that this effort will cost the manufacturers of food products some $2 billion, as well as a couple of hundred million more for the government’s costs.

My first thought was, ‘what’s the point?’ The changes are incremental, although some of them (like using larger type for the number of calories) are obvious enhancements.  But why couldn’t manufacturers make tweaks like that for themselves?

Because it’s a Federally-required label, you idiot, and it has to fit the Federally-required format.  Tweaks are illegal, resulting in fines, and maybe criminal prosecution.

And why is the Federal government formatting food labels?

I don’t specifically recall.  The news reports on this noted that the standard nutrition label has been around for about 20 years.  What did we have before then?

Well… we had nutrition labels that generally provided the same information, perhaps not to the same detail, but covered the basics.  Formats varied from one manufacturer to another, but were generally consistent (how many ways can you list calories and nutrients?).

Somehow, we survived: I don’t recall any sort of crisis that led to the FDA mandating formats for food labels.  They just sort of appeared, quietly, in the 1990s.

But maybe I shouldn’t rail at this latest bureaucratic exercise.  $2 billion will provide tens of thousands of jobs, and most of the cost will be covered by the private sector.  And those people will spend on goods and services, creating still more jobs and stimulating growth.

Yeah, right.

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Some of the reports on the new nutrition labels noted that for a cost of $2 billion, a benefit of $20 billion will accrue to consumers, or about $65 per capita.

OK: where do I go to collect my $65?  Because I can’t see how a reformatted label is going to actually save me anything.

3 thoughts on “Finally, a Federal Jobs Program”

  1. I don’t expect any benefits at all, and few if any jobs to be created, except if there are losses to the companies who have to trash old packaging and order new packaging. If companies are given time to transition into the new packaging, using up the vast majority of the “old” packaging, which ought to be quite possible given the “just in time” nature of much manufacturing, the actual benefit to the economy will be minuscule, essentially a setup cost for the new font and format and any marginal costs for the new packaging over the old packaging.

    We see the information on packaging change about every six months, as the weight of the package changes. This is a change on that order of magnitude.

  2. $2 billion is nothing in the greater picture of the economy. Let us presume that one makes $10 an hour. When you count the employer’s share of Social Security and Medicare taxes, that’s $22,500 per year for a full-time employee. This would pay for just about 84,000 man-years of work, presuming no profit for the person hiring the workers. The question that you have to ask is, “Over what time frame?”

    A confusing thing about how the government estimates benefits is that it is usually over a five to ten year period of time, and sometimes even longer.

  3. Of course, I’m being facetious, particularly about the $65 per capita ‘benefit.’

    But my bigger point is that government regulations in fact represent a significant, if not the largest, Federal jobs program. The update to nutrition labels is but one of a galaxy of Federal regulatory initiatives, which cost billions of dollars and create millions of jobs, to little practical effect. And if we stopped doing it, we’d have yet more hordes of unemployed.

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