Public Advocate, Hunter College release compilation of 50 studies on Wal-Mart’s Economic Impact
Public Advocate Bill de Blasio and the Hunter College Center for Community Planning and Development today released “Wal-Mart’s Economic Footprint” a comprehensive review of over fifty studies on Wal-Mart’s economic impact across the country.
The joint review of key research papers from the past seven years indicates that the opening of a Wal-Mart in New York City would likely eliminate more jobs than it creates, result in the loss of independently owned small businesses, and create an increased burden on taxpayers.
“The history of the last decade tells us that Wal-Mart stands to be our City’s Trojan Horse,” said Public Advocate Bill de Blasio. “Wal-Mart’s record of driving small businesses out of town and paying below-poverty line wages to its employees will only exacerbate the current decline of New York City’s middle class. We must do everything we can to spur job creation in New York City, but that does not include opening our doors to a proven job-killer.”
“Studies from all across the country show that Wal-Mart's arrival does not bring the increase in jobs and retail spending that the company promises,” said Brian Paul, Center Fellow and Masters of Urban Planning Candidate at Hunter College. “Instead, Wal-Mart captures spending from existing stores, driving them out of business and replacing existing retail jobs with lower-paying Wal-Mart jobs. This is not only about one store in East New York. Wal-Mart is planning a massive expansion into urban markets. Allowing one Wal-Mart to enter New York may open the floodgates and devastate small businesses in neighborhood retail districts throughout the city.”
The findings from this review include the following:
1. Wal-Mart’s Economic Impacts: Net Loss of Jobs, Fewer Small Businesses
The value of Wal-Mart to the economy will likely be less than the value of the jobs and businesses it replaces. A study looking at the estimating the future impact of Wal-Mart on the grocery industry in California found that, “the full economic impact of those lost wages and benefits throughout southern California could approach $2.8 billion per year.”
Chain stores, like Wal-Mart send most of their revenues out of the community, while local businesses keep more consumer dollars in local economy: for every $100 spent in locally owned businesses, $68 stayed in the local economy while chain stores only left $43 to re-circulate
locally.
2. Wal-Mart’s Costs to Taxpayers
Wal-Mart has thousands of associates who qualify for Medicaid and other publicly subsidized care, leaving taxpayers to foot the bill. For instance in Ohio Wal-Mart has more associates and associate dependents on Medicaid than any other employer, costing taxpayers $44.8 million in 2009.
3. Wal-Mart’s low paying jobs contribute to the decline of the Middle Class
Wal-Mart’s 2010 health care offerings have a high annual deductible of $4,400 which means a family would have to spend $5,102 of their own money on health care before Wal-Mart’s insurance pays anything. Based on the average salary of a Wal-Mart employee this payment represents almost 25% of their annual income.
The full report is available here...