Tuesday, April 4, 2006

Wal-Mart, cities, and the poor

   Think about Wal-Mart.  It's been more than a century (perhaps since the Standard Oil monopoly?) since the public policy debate raged so fiercely around one company.  Critics of the largest private employer in the United States complain of the retail giant’s labor practices, its arm-twisting of suppliers, and, perhaps most of all, its effect on land use and community.  Not only does Wal-Mart’s dominance of the retail world make it difficult for smaller, locally-oriented stores to compete, but Wal-Mart’s enormous appetite for land in the exurbs (and woe to a community in which Wal-Mart departs, leaving a giant empty box) makes it a quintessential symbol of suburban sprawl.  The mantra of WakeUpWalMart.com is “The High Cost of Low Price.”
   These are familiar arguments, of course.  What is not always recognized is the simple fact that low prices have a benefit – something with which any American family that happily shops and saves at Wal-Mart would agree.  A recent study by the think tank Global Insight concluded that Wal-Mart is responsible for significant decreases in retail prices.  In the two decades ending in 2004, Wal-Mart alone “saved” consumers about $263 billion, the report concluded, or about $1000 for person in the country (and a total which far exceeded Wal-Mart’s negative effect on national wages).  In an era in which government assistance for the poor -– Temporary Aid for Needy Families, food stamps, and housing subsidies –- is harder to come by, Wal-Mart’s low prices may be serving as a leading source of financial help for poor Americans.
   Wal-Mart announced today that it plans to open more than 50 stores in struggling urban centers.  This appears to be a very welcome change in thinking for “big box” retailers, which historically have preferred the wide open spaces, with ample parking, of the suburbs.  Poorer communities, especially African American neighborhoods, often complain that few big retailers will start a store there; stereotyping may be behind the lack of investment.  I suspect that many struggling Americans in poor urban areas, such as the south side of Chicago, would be thrilled to see Wal-Mart open down the street.  New urbanists should be joyful if Wal-Mart follows through with its announced plan to re-use some vacant urban stores and warehouses.  Environmentalists should be happy with the idea to construct on brownfield sites that others have shunned.  And advocates of local businesses might be assuaged to some extent by the plan to give subsidies to some small retailers near new Wal-Marts in a handful of blighted urban areas.
  Yes, many of Wal-Mart’s practices are very troublesome.  But let’s not demonize a corporation, especially one that holds -– by virtue of its size alone -– an outsized opportunity to help the poor in suburban, rural, and urban America.


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