Have you played the game Two Truths and a Lie? Well Wal Mart just played us when they began using their slogan in late 2007: “Save money. Live better.” It’s true that you save money shopping there, but there’s a truth and a lie in the 2nd half of the slogan. It’s true that major Wal-Mart investors and the six members of the Walton family (heirs who have the same net worth as the bottom 1/3 of Americans) will continue to live better, but there are few beyond these people.
The Institute for Local Self-Reliance is an invaluable resource to understand why supporting independent businesses is important if we want to live better as citizens of a community. There was a study reported back on January 2007 that examined 3,094 counties across the U.S. between 1977 – 2002, tracking the arrival of new Wal-Mart stores.
The study, conducted by Univ. of California economist David Neumark, found that opening a Wal-Mart store led to a net loss of 150 retail jobs on average, suggesting that a new Wal-Mart job replaces approximately 1.4 workers at other stores
(The Effects of Wal-Mart on Local Labor Markets)
Many independent retailers close down once a new Wal-Mart moves in their county. This is like a bully in a playground not allowing any other kids to play around the area they claim. Aside from job loss there’s other downsides of opening a Wal-Mart in your community:
In addition to incurring new costs, cities that approve big-box development often experience a decline in property and sales tax revenue from existing neighborhood and downtown business districts, as well as older shopping centers. As these areas lose sales and experience vacancies, the value of property declines and with it, the property tax revenue. Sales tax revenue also falls. One study of 116 cities in California found that, in all but two cases, the presence of a big-box store did not correspond to increased sales tax revenue. (Bay Area Economic Forum, Supercenters and the Transformation of the Bay Area Grocery Industry: Issues, Trends, and Impacts, 2004, 74-81)
Unfortunately wherever you buy your home here in the Bay Area, there’s probably a big-box nearby. Just the past year a new Target opened an exit away from where I live. Less sales and property tax revenue from businesses means less money for public services like schools! But let’s not forget how even a slight shift in your spending behavior will generate more funds for your local economy, paving the way for a brighter future.