New Study Suggests Wal-Mart's Economic Impact a Wash for Urban Communities

By Kevin Robinson in News on Jan 11, 2010 3:40PM

A new study recently released by researchers [via] at the University of Illinois at Chicago and Loyola University Chicago shows that the opening of a Walmart in Chicago's Austin neighborhood has not increased retail activity or employment opportunities in the area. Walmart's expansion into urban areas has been controversial, and it's renewed attempts to open a second store on the city's South side has been surrounded with charges that the mega-retailer destroys small business and drives down wages. Supporters claim that there is an employment crisis in the black community and Walmart will bring hundreds of jobs to a neighborhood that desperately needs them. "What we're seeing here is that placing a Walmart in an urban setting is basically a wash in terms of sales revenue for the city and jobs for local residents," study co-author David Merriman, head of the UIC department of economics and professor of public administration said. "This means that communities around the city shouldn't see Walmart or other big-box retailers as a panacea for local economic problems." 37th Ward Alderman Emma Mitts disagreed with the study, saying on WTTW's Chicago Tonight that "people see what they want to see," and that she hadn't heard anyone in her community complaining.

Unfortunately for Chicagoans, especially those in communities blighted by chronic joblessness, the leadership and insight required to maintain an economic engine capable of sustaining jobs in our neighborhoods is tragically absent from the so-called Walmart debate. Ironically, most everyone agrees that jobs are critical to the social and economic stability of everyday Chicagoans. And while an argument that treads issues of race and class rages over what may or may not be 300 new jobs on the South side of Chicago, a better opportunity for higher-paying jobs and a larger economic impact region-wide is passing Chicago by. A study done for the Alliance for American Manufacturing demonstrates that roughly 18,000 new jobs would be created for every $1 billion in new infrastructure spending on the nation’s transportation, energy, water systems, and public schools. That comes at a cost of about $55,000 per job. And an in-depth look at manufacturing in Indiana showed that a state-wide manufacturing workforce of nearly 575,000 supported another 1,194,787 jobs through the multiplier-effect. What does any of this have to do with jobs on the South Side of Chicago? If supporters of good jobs in Chicago continue to let Walmart weigh them down as an issue, the city (and its citizens) will miss out on opportunities to bring high-wage jobs, and the subsequent jobs they can support, into our communities.

You can download the full study here as a Word document.