[Vision2020] Council Must Reject Rezone

deaconjames at verizon.net deaconjames at verizon.net
Tue May 9 15:16:49 PDT 2006


Here is another quote from the same study, one that is more in line with what I've been talking about:

"The earnings declines associated with Wal-Mart do not necessarily imply that Wal-Mart stores worsen the economic fortunes of residents of the markets that these stores enter. Wal-Mart entry may also result in lower prices that increase purchasing power, and if prices are lowered not just at Wal-Mart, but elsewhere as well, the gains to consumers may be widespread."

The study was looking at retail employment only, not the effect on the region as a whole. 

Take care,

Deacon

P.S. I'm curious why you trimmed quotes like this: "There is some evidence that payrolls per worker also decline, by about 3.5 percent, but this conclusion is less robust." Your final quote looked something like this: "Payroll per employee declines by about 3.5 percent." That's a bit of a change, eh?



From: Andreas Schou <ophite at gmail.com>
Date: Tue May 09 16:53:04 CDT 2006
To: "deaconjames at verizon.net" <deaconjames at verizon.net>
Cc: vision2020 at moscow.com
Subject: Re: [Vision2020] Council Must Reject Rezone

> If someone spends $10 on a toaster instead of $20, they have $10 extra dollars to spend
> on something else they otherwise would not have been able to purchase. That may be a
> book, internet service, lunch at a restaurant, or stocks. Whatever it is, it is something
> they otherwise would not have. Therefore, by buying that toaster at WalMart, they increased > their  disposable  income by $10. When you spread that effect  across the region, and you
> get increased  personal income, and that is a good thing.

That's a great argument. It makes a lot of sense. It's also wrong.
>From a study commissioned by Wal-Mart:


This is not true. This study, commissioned by Wal-Mart, provides a
thumbnail sketch of Wal-Mart's aggregate effects on employment. In
short: in the retail sector, on average, Wal-Mart stores reduce
employment by two to four percent. Payroll per employee declines by
about 3.5 percent. Retail earnings fall. Overall, there is some
evidence that Wal-Mart stores increase total employment by about two
percent, though not all evidence supports this conclusion. There is
strong evidence that total payrolls per person decline by about five
percent in the aggregate, implying that residents of local labor
markets earn less following the opening of Wal-Mart stores.

Particularly interesting is the conclusion the study makes about the
South -- a conclusion which they connect to state right-to-work laws.
In the South, they conclude, Wal-Mart causes substantial damage to
retail employment, total employment, and total payrolls per person.

http://www.globalinsight.com/publicDownload/genericContent/neumark.pdf

-- ACS



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