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Q: Walmart Creates jobs? or Raises unemployement? ( Answered,   4 Comments )
Subject: Walmart Creates jobs? or Raises unemployement?
Category: Reference, Education and News
Asked by: kansasman-ga
List Price: $2.00
Posted: 21 Sep 2004 19:20 PDT
Expires: 21 Oct 2004 19:20 PDT
Question ID: 404475
is the statement for every 2 jobs walmart creates, 3 existing
community jobs are lost accurate? Where are the studies?
Subject: Re: Walmart Creates jobs? or Raises unemployement?
Answered By: denco-ga on 21 Sep 2004 22:24 PDT
Howdy kansasman-ga,

My first reaction was the same as my friend and colleague, pinkfreud.

Initial queries started to confirm that feeling, but sometimes, some of
these statements do have legitimate sources.

The main source of the statement seems to be from the late Donella (Dana)
Meadows, founder of the Sustainability Institute.  She is often referenced
as the author of the study that produced this information, but instead, she
is the one referencing it.  From the Sustainability Institute web site.

"A Massachusetts study says a typical Wal-Mart adds 140 jobs and destroys
230 higher-paying jobs."

She references the same Massachusetts report again here.

"A Massachusetts study says that a typical discount superstore creates 140
jobs and destroys 230 higher-paying jobs."

Note the above numbers produce an approximate 2 to 3 ratio.

In this last reference, she adds: "The Wal-Mart decision in Greenfield,
Massachusetts was a protracted struggle, involving two town-wide referenda.
One key event was an independent study, which Wal-Mart agreed to pay for."

However, I have been unable to find the above referenced Massachusetts study,
and I don't think the Greenfield study is the one referenced.  More on that

The trail next leads us to the lengthily named and lengthy 250 page "Shils
Report," published on February 7, 1997, and entitled "Measuring the Economic
and Sociological Impact of the Mega-Retail Discount Chains on Small Enterprise
in Urban, Suburban and Rural Communities."  You can read the whole thing on
the LawMall web site.

"The Report details the effect which the mega-chains and 'Big Boxes' have
had on competing small businesses ..."

In Chapter 1 of the report, we get lead on further.

"In studies, such as one completed in the Lake Placid, New York area, the
conclusion was reached that in exchange for 1 new part-time job in a mega-
discount chain, about [1 1/2] full-time jobs were eliminated in smaller
stores. ... This was also observed by the author after interviews with
surviving small retailers in areas invaded by the major chains."

The authors of the above study are no pikers.  The LawMall web sites has
them as "Edward B. Shils, with Ph.D., J.D. and LL.M. degrees, is the study
director, and ... George W. Taylor[,] Emeritus Professor of Entrepreneurial
Studies, and the Director Emeritus of the Wharton Entrepreneurial Center
of The Wharton School, University of Pennsylvania."  Not shabby!

Again, note that this gives the 2 to 3 ratio commonly referenced.

More on the Lake Placid study, referenced in the "Shil Report," can be found
on the Sprawl-Busters web site.

" ...
Wal-Mart Research
Residents for Responsible Growth
Lake Placid
General info on Wal-Mart and examples of impact on local town
18 [pages]
... "

I could not find an online copy of the Lake Placid report, but have no
doubt, considering its use in the "Shil Report," that it is the "real"

Now, are they accurate numbers?  In the Lake Placid situation, I have no
reason to not believe the numbers quoted.  It does appear that the numbers
also depend on the the location of the store.

Another page on the Sprawl-Busters web site has these numbers from the 1999
"Kilmarnock. Va. Another Wal-Mart Impact Study."

"Muller calculates that Wal-Mart would create 246 mostly part-time jobs,
and would destroy 248 jobs at other businesses."

The above provides a 1 to 1.008 ratio, but a net loss of jobs is a net loss
of jobs.

Back to the Greenfield study, paid for by Wal-Mart.  The GreenSense web site
has excerpts from "The Hometown Advantage - How to Defend Your Main Street
Against Chain Stores ... and Why It Matters" by Stacy Mitchell.

"One study paid for by Wal-Mart concluded ... 177 new jobs expected to be
gained by the addition of Wal-Mart would be off-set by losses of 148 jobs
at other businesses.
Another study, which examined the impact of a proposed Wal-Mart in North Elba,
New York, found ... 134 jobs promised by Wal-Mart would cause 112 job losses
elsewhere, leaving the town with a net gain of only 22 jobs. ..."

These last two referenced studies indicate a gain in jobs instead of a loss.

Without seeing the original studies and the math behind them, I would take
all of the above numbers with a grain of salt.  I would also like to see
the long term effects on employment in those communities before drawing
any major conclusions.

If you need any clarification, feel free to ask.

Search strategy:

Google search on: 2 3 jobs walmart lost

Google search on: "Donella Meadows" Walmart OR "Wal-Mart" Massachusetts

Google search on: "Residents for Responsible Growth" "Lake Placid"

Looking Forward, denco-ga - Google Answers Researcher
Subject: Re: Walmart Creates jobs? or Raises unemployement?
From: pinkfreud-ga on 21 Sep 2004 20:05 PDT
That statement is all over the Web, often prefaced by "studies show
that..." or "research shows that..."

I'm skeptical. If studies show that this is true, isn't it odd that
none of these anti-Wal-mart sites are republishing or linking to the
alleged studies?
Subject: Re: Walmart Creates jobs? or Raises unemployement?
From: neilzero-ga on 22 Sep 2004 01:52 PDT
I love shopping at Walmart, but logic suggests a net loss of jobs in
the USA. Doing an unbiased long term study is difficult, and not
likely. I'm having trouble identifing why a new Walmart super store
would cause increased long term net employment in the area.
 I sometimes premis that big is bad, and very big is dangerous. Let's
give reporting/estimating options to businesses that gross less than
ten million per year, and tax the biggest corporations more heavily
than the small and medium.   Neil
Subject: Re: Walmart Creates jobs? or Raises unemployement?
From: scalemodeller-ga on 22 Sep 2004 03:08 PDT
I'm sure that Wal-Mart does take over and eliminate existing jobs when
they come in. I saw 3 retail stores vanish in my hometown in the late
seventies when the Wal-Mart was built. But also with the new influx of
shoppers from all around that area of the state gas stations and fast
food stores flourished. Also the population grew and with it
subdivisions and the other businesses needed to support life. Have
these periferal additions been considered, which take months and years
to develop, in the surveys?
Covington, Ga
Subject: Re: Walmart Creates jobs? or Raises unemployement?
From: scubajim-ga on 22 Sep 2004 10:31 PDT
The thing I have a problem with Walmart is that we give tax breaks to
them for opening a store.  If Walmart wants to open a store, fine, but
we shouldn't give them preferential tax treatment.  That smacks of
polititians being bought off. (no proof or claims that they are)  If I
want to open a small store the state or city won't give me tax breaks.
 They have a lot more resources than the small business owner and can
get loans etc. that the small business owner cannot.  Let them do
that, not get preferential government treatment.

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