Liberals and Walmart (WMT)

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?

About Richard K. Green 103 Articles

Affiliation: University of Southern California

Richard K. Green, Ph.D., is the Director of the USC Lusk Center for Real Estate. He holds the Lusk Chair in Real Estate and is Professor in the School of Policy, Planning, and Development and the Marshall School of Business at the University of Southern California.

Prior to joining the USC faculty, Dr. Green spent four years as the Oliver T. Carr, Jr., Chair of Real Estate Finance at The George Washington University School of Business. He was Director of the Center for Washington Area Studies and the Center for Real Estate and Urban Studies at that institution. Dr. Green also taught real estate finance and economics courses for 12 years at the University of Wisconsin-Madison, where he was Wangard Faculty Scholar and Chair of Real Estate and Urban Land Economics. He also has been principal economist and director of financial strategy and policy analysis at Freddie Mac.

His research addresses housing markets, housing policy, tax policy, transportation, mortgage finance and urban growth. He is a member of two academic journal editorial boards, and a reviewer for several others.

His work is published in a number of journals including the American Economic Review, Journal of Economic Perspectives, Journal of Real Estate Finance and Economics, Journal of Urban Economics, Land Economics, Regional Science and Urban Economics, Real Estate Economics, Housing Policy Debate, Journal of Housing Economics, and Urban Studies.

His book with Stephen Malpezzi, A Primer on U.S. Housing Markets and Housing Policy, is used at universities throughout the country. His work has been cited or he has been quoted in the New York Times, The Wall Street Journal, The Washington Post, the Christian Science Monitor, the Los Angeles Times, Newsweek and the Economist, as well as other outlets.

Dr. Green earned his Ph.D. and M.S. in economics from the University of Wisconsin-Madison. He earned his A.B. in economics from Harvard University.

Visit: Real Estate and Urban Economics Blog

1 Comment on Liberals and Walmart (WMT)

  1. 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.

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