There is a protest today in Los Angeles against the construction of a new Wal-mart in Chinatown. The store would be part of a mixed use development near a transit station on a lot that has sat vacant for some time.
I am no fan of Wal-mart. Among other things, I wish that those who attempt to bring a class action suit against Wal-mart (WMT) pay discrimination had prevailed in the Supreme Court case of Wal-mart vs Dukes. Nevertheless, it also concerns me that Los Angeles has had essentially no job growth in two decades, and that urban redevelopment is very difficult to do here. According to the leading scholar on the economics of Wal-mart, Emek Besker, Wal-mart creates more jobs than it destroys (BTW, I don’t think Emek is a particular fan of Wal-mart either). It also allows households to buy goods at low prices. On balance, I think the construction of the Wal-mart in Chinatown will be good for that particular neighborhood and the city.
One of the arguments advanced against Wal-mart is that it hurts small business. I particularly hear this from fellow liberals, who love to extol the virtue of small business. Yet, according to Kelly Edminston at the KC Fed, job quality is much worse at small business than large firms. The average wage at a small firm (< 100 workers)was $15.69 an hour in 2004; for large firms (>500 workers) it was $27.05. Moreover, small businesses paid 1/4 of their labor force less than $8 per hour; for large businesses it was 3 percent of their labor force.
Meanwhile, no one lobbies harder against the minimum wage than small business trade associations. The National Federation of Independent Business was also the lead plaintiff against the Affordable Care Act. So to those liberals who extol small business: what’s the deal?
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Thank you for some perspective. Also not a fan of what wmt does to our economy in some ways. Low wages and benefits, importing goods, converting main st into big-box.
But, they are really just similar or better at these things than most anyone else. Do we really think the clerk at the local hardware store or pharmacy has great benefits? Wouldn’t the local pet store or sporting goods store demand low prices from suppliers if they had enough power? Does any business welcome unions?
I chafe when cities issue blanket “no wmt” proclamations like the mayor of Boston has pretty much done. It’s mostly just pandering.