The news yesterday that the Chicago City Council zoning committee unanimously approved plans for a Wal-Mart on the city’s South Side read like a press release straight form the Mayor's office. Most publications, including the esteemed Chicago Tribune and New York Times only included the view from the Mayor's pro-Wal-Mart stance.
We heard what the Mayor had to say, or rather what Wal-Mart told the Mayor they estimate the deal would deliver: "Wal-Mart said it was planning several dozen stores in Chicago that would add 12,000 jobs over five years, and more than $500 million in sales taxes and property taxes for the city, according to the company’s estimates."
What is the local business community saying?
Wal-Mart will not bring jobs to Chicago. Let me repeat that: Wal-Mart will not bring jobs to Chicago.
The opening of a monstrous big-box can feel momentarily like a major infusion of jobs. But as they put pressure on smaller retailers, through the sheer scale of their operation, those small businesses disappear. And with them disappears not only their lower wage jobs - their cashiers and sales associates - but the critical middle-class jobs they helped support: local accountants, bookkeepers, graphic designers, soon find themselves without work, post Wal-Mart.
This rippling effect (well documented in critically-acclaimed books such as Stacy Mitchell's The Big Box Swindle), means that at the same time a new Wal-Mart lowers the total number of jobs in a community, it can also depress overall wages. We know also that major big-box outlets can in fact cost local governments more in the long run, as families who live on Wal-Mart's lack-of-benefits plan find themselves relying more on government services.
Read on, for a list of the many economical, political and social cons of this deal, as outlined by Megan Wade Antieau, Local First Chicago boardmember.
But wait, Daley insists the deal is "a win situation for everyone": "To me, it's a win situation for everyone. Those who criticized it, made recommendations. They heard from them. They heard from everyone. But the big thing was people. People want jobs."
The proof is in the numbers. Did the West Site Wal-Mart store opened in 2006 bring more jobs and wealth to Chicago?
According to Al Norman's post published by the Huffington Post, a recent study from Loyola University and the University of Illinois at Chicago showed there is no evidence that the 2006 Wal-Mark improved economic activity or employment in the area, and what the "weight of evidence" shows is a break-even, a displacement of jobs in the small business sector which then get balanced by new Wal-Mart jobs.
The study, The Impact of an Urban Wal-Mart Store on Area Businesses: An Evaluation of One Chicago Neighborhood's Experience, found that Wal-Mart's opening in Chicago has produced a loss of 300 full-time jobs. Researchers concluded that the probability of a local retailer going out of business during the study period was significantly higher for establishments close to Wal-Mart's location. The loss of jobs in the trade areas near Wal-Mart just about balanced out any 'new' jobs attributable to Wal-Mart. "These estimates support the contention that urban Wal-Mart stores absorb retail sales from other city stores without significantly expanding the market," the researchers said.
"What we're seeing here is that placing a Wal-Mart in an urban setting is basically a 'wash' in terms of sales revenue for the city and jobs for local residents," explained study co-author David Merriman, head of UIC's economics department. "This means that communities around the city should not see Wal-Mart, and other big-box retailers, as a panacea to local economic struggles."
Overall, researchers concluded, "the weight of evidence suggests that the Wal-Mart opening on the West Side led to the displacement of a range of businesses. There is no evidence that Wal-Mart sparked any significant net growth in economic activity or employment in the area."
Here are 12 other studies showing the same effects.
I'm dying to hear - What do YOU think? Comment here or join the conversation on the Local First Chicago Facebook Page.