Tuesday, June 29, 2010

Chicago's Only Wal-Mart Has Improved Its West Side

"Now that it appears Chicago's South Side will be getting a Wal-Mart, what will it mean for that community? The store is scheduled to open in early 2012 at 111th and Doty in Pullman. CBS-TV 2's Jim Williams went to the only current Chicago Walmart on the West side to see how it has affected that neighborhood."  

Watch the video here to see the positive effect Wal-Mart has had on Chicago's west side by creating more than 400 good-paying jobs, making the neighborhood safer, and helping to revitalize the area and bring in new stores including a Menards Home Improvement store, a CVS pharmacy, two new banks and an Aldi Grocery Store.  Area alderwomen Emma Mitts credits Wal-Mart for attracting many new stores to the neighborhood, and says that "traffic is so heavy on the weekends that it's hard to get up and down the strip, and that's a good thing and I'm so grateful for it."

Although Wal-Mart frequently gets blamed for putting local merchants out of business when the open a new store, this story provides some evidence to the contrary - by stabilizing a rough area on Chicago's West Side and attracting thousand of customers for "everyday low prices," at Wal-Mart actually helped to attract new businesses to this Chicago neighborhood, including direct competitors like Menards, CVS and Aldi.  In other words, Wal-Mart provides many significantly "positive externalities" and "spillover benefits" to the communities in which it operates, even though it frequently gets more attention for some of the "negative externalities" and "spillover costs" it might impose. For neighborhoods like the west side of Chicago, it sure looks like the positive externalities (jobs, tax revenues, great safety, more commercial activity, etc.) far outweigh any negative externalities.     

33 Comments:

At 6/29/2010 9:30 PM, Anonymous SuhrMesa said...

Be sure that Obama, Unions and the Left in general are livid. The Left's biggest fear: the crumbling myth that business is evil and government is benevolent. The public pot is boiling and this will not end well for those emotionally invested in the dysfunctional left ideology.

Wal-Mart does not need community organizing. Results speak loud and clear... government, get out of the way.

No more Accept, Cope and Obey from Team Obama.

 
At 6/29/2010 10:14 PM, Anonymous MalR said...

Total BS. Studies conducted by Chicago universities on this one store over many years showed that just as many jobs in the neighborhood were lost as a result of Walmart .

 
At 6/29/2010 10:54 PM, Anonymous Anonymous said...

@MalR it is all well and good to say studies have been conducted showing the opposite ie that WalMart does more harm than good, but why not provide us with the names of the Universities, the researchers and the reports they published? or are these studies just urban myths?

 
At 6/30/2010 1:33 AM, Blogger PeakTrader said...

Even if Walmart destroys 1,000 jobs creating 100 jobs, it frees-up 900 people to do productive work. Also, Walmart drives-down prices and drives-up profits, which benefit society.

However, although Walmart workers are paid well above the minimum wage and above the industry average, perhaps they should receive quarterly or annual bonuses for contributing so much value to society.

 
At 6/30/2010 2:04 AM, Blogger PeakTrader said...

Moreover, it does seems Walmart attracts other "brand name" businesses in the immediate area, and may increase property values (both commercial and residential).

 
At 6/30/2010 4:09 AM, Anonymous Anonymous said...

If one believes in or understands free markets at all, it is irrelevant whether Wal-Mart creates jobs or destroys them.

In fact, their contribution to GDP is enhanced if they not only lower prices but with at least slightly less labor.

 
At 6/30/2010 8:12 AM, Anonymous Anonymous said...

Just read a bunch of competing studies, giving evidence once again that researchers start with a conclusion and work backwards to support it. Some outcomes showed Wally as good, others as bad. I just look at the data.

Wal-Mart is a success in a free market. The Walton is not FORCING anyone to shop there--ppl must like it for a reason (e.g., lower prices must enhance their quality of life, or something).

Similarly, a new Wally-World attracts, what? 1,000 resume for every job? SOMEONE must like working there (indeed, I would guess that comparing WW employees to "average retail" is not fair, given the, uh, proficiency/caliber of WW employee I have observed... Just sayin'.).

BTW: All you kollidge kidz that oppose WW and make up fancy "studies," here's an idea: go work there, check it out, see why it's popular.

BTW #2: I do not like Wal-Mart. I have visited maybe... 10 times in my life? And actually purchased something maybe... 5 times? I am just a snob that way: it makes me feel cheap and dirty to shop there. As a free citizen, I will go elsewhere to pay for a certain level of quality in my goods and clothing. BUT THAT IS THE BEAUTY OF Wal-Mart *and* AMERICA! I am free to do so!

My disdain for Walton-Mountain does not preclude my admiration for their business. Employing the otherwise unemployable is a good thing (it lessens my demographic's tax burden); lower prices can be a good thing; raising the standard of living for WM shoppers is a good thing; and so on.

As I say, I just look at the data. What kind of person finds Wal-Mart to be "evil" versus how popular--some might say essential--is Wal-Mart to the lives of its employees and shoppers?

Addendum: When I go cheap I go CostCo, Ikea, and Marshalls/TJMaxx--or even the local Job Lots/Odd Lots/Insurance Lots-type store in my area.... That is, when I go cheap I go *really* cheap. Otherwise I save my money for merchandise with some chance of lasting...

Hieronymus

 
At 6/30/2010 8:22 AM, Blogger juandos said...

MaIR says: "Total BS. Studies conducted by Chicago universities blah blah blah"...

Hmmm, these two didn't author said study by chance?

Just asking is all...

 
At 6/30/2010 9:08 AM, Blogger I live here too said...

As a life long Chicagoan I have followed the Walmart debate closely in the local media.
The ONLY reason there has been opposition to walmart is because of the heavy union influence in the local Democratic machine.
The Alderman (aldercreature) which sponsored the "Big Box" ordinance (an anti walmart bill), Joe Moore of the 49th Ward, was almost solely funded by outside the zip code donations from the Service Employees Union, that and his self aggrandizing and pandering attempts to gain a National reputation in furtherance of his political aspirations. Please note, the 49th Ward in Chicago has no big box stores, nor any available plot for a big box store. Conversely the 49th Ward is bordered by the suburbs of Evanston, Lincolnwood, and Skokie-all of which do indeed have these merchants-and the corresponding jobs and tax receipts the stores-Target, Best Buy, Walmart, Home Depot, Loews and Menards generate.

AS to the "studies", they are acknowledged to be faulty in that they/it did not look at the net job creation generated outside of the Walmart itself. The studies authors are also suspect as to their neutrality in methodology and conclusions.
http://www.suntimes.com/news/commentary/2361156,CST-EDT-edit07.article
"The study's anti-Wal-Mart conclusions don't add up.

On Thursday, the City Council Zoning Committee, short on votes, once again deferred a vote on a massive development on the Far South Side that would include Chicago's second Wal-Mart, giving Chicagoans more time to analyze this study, as well as all things Wal-Mart.

First, let's take a careful look -- and quickly dismiss -- this flawed study by researchers at Loyola University Chicago and the University of Illinois at Chicago.

Though pegged as the first urban analysis of Wal-Mart's impact on local businesses and jobs, the study turns out to be little more than a cheap shot at Wal-Mart.

The underlying data are weak, even if the researchers' forceful conclusions are not.

In other words, their conclusions are no conclusions at all.

The researchers found that the Austin Wal-Mart basically has been a "wash" in terms of job creation. The jobs created by Wal-Mart, they concluded, were erased by the loss of an equal number of jobs at nearby businesses that closed after Wal-Mart opened in September 2006.

Too bad the researchers didn't count the jobs at the new businesses that opened after Wal-Mart's arrival on the West Side. There are roughly 22, according to the local alderman, Emma Mitts, including Menards, Food 4 Less, Aldi, two bank branches, CVS and Burlington Coat Factory. That information wasn't available, the researchers say.

Too bad they also didn't factor in other reasons, unrelated to Wal-Mart, nearby businesses closed. Nor did they compare West Side business closure rates with rates in other similar communities. Again, that information wasn't available.

Without this key data, this research is only a starting point -- and nothing close to a definite statement about Wal-Mart's economic impact. "

 
At 6/30/2010 10:53 AM, Blogger Jason said...

I have no studies to quote. I have no facts to share. I only have my mind and an ability to think. And for full disclosure, I despise Walmart, not for it's anti-union stance, but for it's overall philosophy and what it's done to it's supply base. I digress...

The claims of 400 jobs created are wrong. This isn't some commune where everyone farmed and made their own clothing - this is Chicago. Big box retailing is a zero sum game in a developed area like Chicago. Everyone shopped somewhere. Until walmart moved in, they shopped somewhere else. And worked somewhere else. Now they shop where they live and *may* work where they live. This argument applies to all the other stores in the area as well.

I believe some jobs have been created, but not nearly the number published.

And what kind of jobs are these? Overwhelming majority minimum wage part time work positions? Is this a success story? Really?

The real benefits here are more competition for workers, which will raise the wage floor, and more distributed shopping for chicago citizens, which is very liberating for folks who may have had to take a bus to get groceries.

 
At 6/30/2010 11:33 AM, Blogger Free2Choose said...

"I have no studies to quote. I have no facts to share...I believe..."

Classic...this is the typical approach to most issues by those on the left. Ideology trumps fact. My worldview supercedes statistical evidence to the contrary. I think therefore it is true that_______. pfft! gimme a break.

 
At 6/30/2010 11:34 AM, Blogger Free2Choose said...

This comment has been removed by the author.

 
At 6/30/2010 11:50 AM, Blogger Walt G. said...

I tend to ignore all arguments that begin with "those on the left." Unless someone is left handed, very few people fit the labels that are attributed to them. Even people on the left, whatever that is, can have views on the right. Only politicians who can't win otherwise cater to such extremist viewpoints.

 
At 6/30/2010 12:09 PM, Blogger Jason said...

@walt: Couldn't agree more. Ignorance comes in all forms these days.

@free2choose: I am actually quite conservative. Regardless, feel free to refute my logic. And while you're at it, explain how adding a Walmart in Chicago creates shoppers. Since to add jobs you would need to increase demand, hence, increase shoppers...

 
At 6/30/2010 1:57 PM, Anonymous Barry Duffman said...

Why does shopping have to be a zero-sum game? Maybe some people couldn't afford to buy some items before, and now they can. Maybe the lower prices allow some people to buy more goods than before.

 
At 6/30/2010 2:11 PM, Blogger sethstorm said...

This comment has been removed by the author.

 
At 6/30/2010 2:15 PM, Blogger sethstorm said...

If there's land in the Chicago metro area more deserving of a Wal-Mart, it would be here in Harvey, Illinois. A nice, clean slate to show whether Bentonville can succeed, or fall flat on its face.

Even if Walmart destroys 1,000 jobs creating 100 jobs, it frees-up 900 people to do productive work.

The problem with that is the 5:1 applicant-to-opportunity ratio that exists today. You are not freeing them to pursue another opportunity, you are merely using unemployment as a part of office politics.




the crumbling myth that business is evil and government is benevolent.

If you want to see business doing evil, I'd suggest you head for Appalachian coal country. More likely than not, they corrupted the government.




Results speak loud and clear...

...that business wants to co-opt government. Been there, seen it happen twice over, and do not care to see it again.

Should anyone who demonizes the unemployed get elected to Congress, any vacation dollars I have from gainful employment will not go to their state. If I am employed early enough, I may donate to their opponent. That is how bad things are.

 
At 6/30/2010 2:31 PM, Blogger PeakTrader said...

Seth, Walmart frees people out of bondage, and creates capital so those free people can borrow at low rates to start their own businesses and hire people.

Of course, we could put people back into bondage digging holes and filling them up repeatedly.

 
At 6/30/2010 2:38 PM, Blogger sethstorm said...


Similarly, a new Wally-World attracts, what? 1,000 resume for every job? SOMEONE must like working there

Those people aren't applying there because they like the place, but that it is the only choice that is open to them. Save your snark about your theoretical choices.


Employing the otherwise unemployable is a good thing

Except when it is a high-churn job. Never mind that the "good conditions" reported there are more common with the concept of a Potemkin Village versus reality. That is, any "good conditions" are the exception, not the rule.

How about just making it harder to refuse/act on bad faith towards that group of people? The unemployed are more than just a pulse and a body that deserves all drudgery that they get.

 
At 6/30/2010 3:39 PM, Blogger Free2Choose said...

This comment has been removed by the author.

 
At 6/30/2010 3:48 PM, Blogger Free2Choose said...

"And while you're at it, explain how adding a Walmart in Chicago creates shoppers."

I don't recall reading anywhere that Wal Mart creates shoppers so I won't attempt to refute the statement. They can, however, effectively raise the income level of all consumers. They do this by leveraging their buying power and supply chain/network efficiencies to lower the cost of many or most of the goods that consumers purchase on a daily basis.

Income, as you may or may not recall, is a determinant of Demand. The money that Wal Mart shoppers didn't jack off at Wal Mart, because they paid a lower price for their soap and Circus Peanuts candies, can now go towards purchasing a new set of wheels or the latest "Butthole Surfers*" CD. Thus Wal Mart can raise Demand without "creating shoppers."

*Not sure if the Butthole Surfers are still around but, you get what I'm saying

 
At 6/30/2010 4:13 PM, Anonymous Lyle said...

If one compares a Super Center to the C-Store for food the Super Center is a full line grocery including produce. This results in at least the possiblity of more health eating than from a C-store where its starch, starch, high fructose corn syrup, and salt. Also superwalmarts carry frozen fish so that there is another healthly food choice. There have been many comments about how full line grocery stores avoid the inner city, and as a result the food choices available there are more fast food oriented. Give people a choice and we can see how the want to eat, if its fast food, fine, but they had a choice.

 
At 6/30/2010 4:27 PM, Anonymous grant said...

Sethstorm:
"Should anyone who demonizes the the unemployed get elected to government"
NO!! Because it was the policies of the previous republican Bush government that caused the unemployment.

 
At 6/30/2010 4:54 PM, Blogger Jason said...

@free: I get what your trying to say. But spending less or differently will not create jobs in the way the original post presented. If the money saved is pooled and invested, then it may create jobs, possibly...eventually...somewhere.

The point I am making is that a walmart on the west side of Chicago will result In less jobs elsewhere in Chicago because the number of shoppers in Chicago is fixed and the amount of money they spend will be the same (or to your point LESS). Spending the same amount of money differently on consumer staples is not really demand.

Unless this walmart is the most amazing walmart, pulling in shoppers from all over the world, creating hotel jobs and restaurant revenue in their wake, it is zero sum.

 
At 6/30/2010 6:11 PM, Blogger Jet Beagle said...

Jason: "because the number of shoppers in Chicago is fixed and the amount of money they spend will be the same (or to your point LESS). Spending the same amount of money differently on consumer staples is not really demand."

Not sure I understand your economic reasoning, Jason.

First, the number of shoppers in Chicago is not fixed. If the Chicago economy does not provide - and the Chicago lawmakers do not allow - efficient retailers, the consumers of Chicago will shop elsewhere. Some will eventually move to communities with efficient retailers. On the other hand, providing efficent retailers in Chicago will increase the number of non-Chicago residents who shop in Chicago.

Second, I'm not sure your concept of demand is the same as the one I'm familiar with. The demand for goods varies with price. Lower prices and the demand increases.

Third, with respect to employment, all consumer demand is not equal. Walmart enables consumers to reduce their spending for non-labor-intensive goods such as packaged food and clothes. The freed up disposable income is available not just for other non-labor-intensive goods. That income is also available for labor-intensive services such as hair styling, house painting, plumbing repairs, restaurants, and night clubs.

 
At 6/30/2010 9:47 PM, Blogger PeakTrader said...

Jason, Walmart induces demand through lower prices and lower interest rates. More goods and capital per person raise living standards. No one is forced to supply Walmart.

The alternative is shopping at Kmart, Target, a mom and pop store, etc. You don't seem critical about those stores, which are less efficient at providing goods and capital for the masses.

 
At 7/01/2010 7:00 AM, Blogger Free2Choose said...

"The demand for goods varies with price. Lower prices and the demand increases."

Jet - close but a finer point may be needed to clarify. Lower price for any given good will increase the Quantities demanded for that good. But broad price decreases effectively raise incomes, there by boosting Demand.

Peak Trader makes a good point. By Jason's reasoning, only businesses which have no direct competitors should be allowed a chance to enter the market. Otherwise, they take jobs from other competitors without raising the standard of living or social welfare of consumers. According to this logic, there would only be Burger King but not McDonalds to provide burgers. Only Ford but not Chevy to provide cars. What Jason neglects is that when competitors enter the market and are able to provide a good more efficiently, they force down prices and push out less-efficient competitors. This is good for consumers (via lower prices) and for the overall efficiency of the economy. Those competitors who do not make the best burgers or cars, will have to find other, more valuable uses for their productive resources. Thus, Wal Mart indirectly promotes economic expansion and job growth.

 
At 7/01/2010 7:03 AM, Blogger juandos said...

sethstorm claims: "Those people aren't applying there because they like the place, but that it is the only choice that is open to them. Save your snark about your theoretical choices"...

Obviously the following from the WSJ is about sethstorm and his like minded ilk: Are You Smarter Than a Fifth Grader?

Self-identified liberals and Democrats do badly on questions of basic economics

 
At 7/01/2010 7:57 AM, Blogger Jet Beagle said...

Free2Choose: "Jet - close but a finer point may be needed to clarify."

It's not close. The law of demand is very simple: the higher the price of a good, the less people will demand of that good. Conversely, the lower the price of a good, the more people will demand of that good.

Free2Choose: "But broad price decreases effectively raise incomes, there by boosting Demand."

Are you referring to Aggregate Demand when you use the capitalized term "Demand"? My comment was about microeconomics definition of demand, not the macroeconomics definition of Aggregate Demand.

I agree with your argument. In fact, I made the point that lowering the prices of packaged goods and clothing enabled Chicago consumers to spend more of their disposable income on other goods and services. I think it is true that changing the prices of packaged goods and clothing - as Walmart has done - will alter the demand curves for many other goods, including services.

 
At 7/01/2010 8:25 AM, Anonymous Anonymous said...

@juandos

Thanks for gettting to Sethstorm's (sorry to say it) idiotic comment.

sethstorm said...
T
"Those people aren't applying there because they like the place, but that it is the only choice that is open to them."

EXACTLY! So, w/o WW--even you can see it, apparently--are UN.EM.PLOYABLE.

If you were not a hypocrite, you would bow down and kiss Wal-Mart's AZZ for its progressive social action--hiring those ignored by other employers!

How can you even type what you do? Do you REALLY not understand what you say?

Hieronymus

 
At 7/01/2010 8:54 AM, Blogger Free2Choose said...

"the less people will demand of that good. Conversely, the lower the price of a good, the more people will demand of that good."

I am sure your intent and analysis was spot on to begin with. I was simply making distinction between quantities demanded (movement along the curve) vs a real increase in Demand (a shift in the curve). You are correct...I was talking about aggregate demand.

 
At 7/01/2010 10:20 AM, Blogger Jet Beagle said...

Free2Choose: "I was simply making distinction between quantities demanded (movement along the curve) vs a real increase in Demand (a shift in the curve)."

You are correct. I wasn't careful enough in my original wording. "Increase in quantity demanded" due to a price change is not exactly the same thing as "increase in demand" due to a curve shift.

 
At 7/01/2010 6:01 PM, Blogger sethstorm said...


Obviously the following from the WSJ is about

Except that you quoted a test of ideological conformance. Of course, someone who does not agree is going to do poorly.


If you were not a hypocrite, you would bow down and kiss Wal-Mart's AZZ for its progressive social action--hiring those ignored by other employers!

By your logic, coal mining operations like those run by Massey are as progressive.

 

Post a Comment

Links to this post:

Create a Link

<< Home