Wal-Mart Again

prelude to an ass-kicking

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Originally published in New Ground 128, January — February, 2010.

by Bob Roman

As New Ground went to press, a proposed compromise that would have allowed Wal-Mart to build additional stores in Chicago bit the dust. The compromise ordinance would have required a “living wage” of $11.03 an hour for retailers that employ more than 50 and benefit, directly or indirectly, from a city subsidy.

According to the Sun-Times, Wal-Mart would not agree, claiming the proposed compromise was “at the expense of Chicago’s working families, not on their behalf.” The Illinois Retail Merchants Association chimed in with “A job killer”, and the Chicagoland Chamber of Commerce called it ten times worse than the vetoed big-box living wage ordinance.

So it’s all about jobs, yes? No. The quality of jobs in the city is a major concern, but it’s also about the very nature of the city: how we get around, how we shop, how and where the money flows. Politicians in favor of Wal-Mart coming to town wrap themselves in the flag of jobs, but in fact Wal-Mart, and other businesses, would be perfectly happy to do business using no employees at all. Consider the “big box” stores that encourage you to ring up your own purchases, or the shabby trick (most popular among manufacturers) of staffing your enterprise almost entirely with “temps.” It’s not about jobs.

Coincident with this latest skirmish, Loyola University’s Center for Urban Research and Learning (www.luc.edu/curl) finally completed and released a three year study on the effect on employment and business by Chicago’s one and only Wal-Mart on the west side. The basic finding was that opening that Wal-Mart had no net effect on employment; the area lost as many jobs through business closings as were created by the new store. For certain kinds of retail stores, there was a measurable distance effect. Closer stores were more likely to go out of business. For others, distance was not a variable. These observations were also broadly consistent with other studies done on the question.

The basic tool used was a survey of surrounding retail businesses over a three year period from the 2006 opening of the Wal-Mart. But the study also looked at sales tax receipts and data on retail employment from the Illinois Department of Employment Security, and these were consistent with the effects observed in the survey data.

The CURL study is available on their web site and it’s worth a read in its entirety. It does provide useful information for countering the jobs spin, even though the official position of the report is agnostic regarding whether Wal-Mart (or any other “big box” retail establishment) is a good idea for any given neighborhood.

Even discounting an official agnosticism (in other words, know your enemy), it’s worth asking just what is a Wal-Mart good for? The “jobs” mantra is a tired attempt at populism that the business community uses every time it wants a handout or evades responsibility. But the prospect of a Wal-Mart in these neighborhoods does have some popular support; the aldermen pushing for more Wal-Marts are not noted for being risk-takers. If a Wal-Mart is generally neutral at best for employment and toxic for much of a neighborhood’s retail businesses, there must be some positive economic consequences nonetheless. Otherwise the popular support for such stores would be far more ephemeral than it is. The interesting question is just who are the local beneficiaries? Possibly it’s time to start looking at things like non-commercial property values, and more subtle things like the sequence of effects.

Many of the aldermen opposing more Wal-Marts are also not known for being risk takers. Let’s return to the Sun-Times for a quote from Alderman Burke, a leader of the opposition, that says it all: “People look at the way the union movement got involved in the last election and nobody’s looking for that to occur again.” Not again, eh? This is clearly Burke’s attempt at minimizing and dividing Labor’s participation in the next municipal election, a return to business as usual. Given that Labor’s effort was expensive in money and labor; given the political capital expended to reach only an approximate consensus on candidates; given the way projects are regarded as expendable if they don’t directly help to organize workers: Well, it could happen. Unfortunately.