FOR IMMEDIATE RELEASE: April 5, 2006
Wal-Mart’s Claims Of Job Creation, Community Benefit, Don’t Hold Up to Scrutiny
Contact :
Jeff Milchen, co-founder American Independent Business Alliance, 406-582-1255, email: Jeff-at-AMIBA.net
Stacy Mitchell, senior researcher, Institute for Local Self-Reliance, 207-774-6792, email: smitchell-at-ILSR.org
BOZEMAN, MT -- The Wal-Mart Corporation’s massive investment in public relations pros bore fruit this week as news outlets ran headlines like “Wal-Mart to add jobs in struggling areas” and “Wal-Mart to create opportunity zones” in synch with Wal-Mart’s press release, which portrayed its latest push to expand into new markets as benefiting those communities more than its shareholders.
Wal-Mart’s press release claimed, “These new stores are expected to create between 15,000 and 25,000 jobs” and “generate more than $100 million in state and local tax revenue.” Jeff Milchen of the American Independent Business Alliance (AMIBA) challenges those claims. “ Wal-Mart doesn’t create jobs so much as relocate them. And not just to China ,” said Milchen. “Retail spending for basic goods is a relatively fixed pie -- people don’t suddenly buy more toasters or tissue when a new big box store arrives.”
Available studies indicate about 85% of Wal-Mart’s sales depend on taking sales directly from an area's existing retailers. And because Wal-Mart employs fewer people per sales dollar, it may be a net disemployer in many communities.
“Wal-Mart claims it will establish ‘economic opportunity zones’ and help local businesses, but no corporation eliminates opportunities for entrepreneurs like Wal-Mart,” said Milchen. He explained that “Independent local businesses employ an array of supporting services. They hire architects, designers, sign makers and contractors for construction. They contract or employ local accountants, insurance brokers, computer consultants, and attorneys -- all of which Wal-Mart centralizes at corporate headquarters, eliminating jobs and opportunities locally.”
"As small towns and suburbs have been overrun by big-box stores, cities have remained a viable environment for locally-owned small businesses," said Stacy Mitchell, a senior researcher with the Institute for Local Self-Reliance and author of Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America's Independent Businesses (Beacon Press, 2006). "Facing saturated suburbs and stagnant same-store sales growth, Wal-Mart wants to eat the lunch of local retailers in urban neighborhoods. To make its plans more palatable, the company has come up with what is nothing more than a clever PR stunt, claiming that it actually intends to help its competitors grow."
"Big-box stores, with their high car and delivery truck traffic counts, will exacerbate many of the quality-of-life issues already plaguing urban neighborhoods, making revitalization and high-wage job growth even harder to accomplish," Mitchell added.
Milchen also noted that Wal-Mart’s claims about new stores generating tax revenues are misleading, noting, “While gross tax revenues may indeed increase when a new big-box store opens, big-box stores require local infrastructure outlays that likely result in higher taxes or reduced services elsewhere. As with job ‘creation,’ only a net gain is a benefit to communities.”
The AMIBA helps communities form local Independent Business Alliances, which support independent, locally-owned businesses and prevent their displacement by corporate chains. Urban IBAs include St. Louis, MO; Austin, TX; Raleigh, NC and Minneapolis/St. Paul, MN.
For studies on economic impact of Wal-Mart and other “big box” development on communities, see: http://www.newrules.org/retail/walmartstudies.html and http://reclaimdemocracy.org/walmart/big-box_studies_reports.php
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