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Commentary

A Case Against the Case Against Walmart


     
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As people crowded into local D.C. grocery stores last weekend, gobbling up a limited supply of water and canned goods in preparation for Hurricane Irene, some may have found themselves pining for the open aisles, vast selection, and efficient check-out operation offered by Walmart.

These shoppers may get their wish in time for next year’s hurricane season, as the retail giant has announced plans to open four stores in the District starting in 2012.

A coalition of labor unions and advocacy groups calling itself “Living Wages, Healthy Communities” has staked out opposition to this plan, arguing that the big-box behemoth claims jobs, reduces wages and destroys communities. Research suggests that these claims are little more than myths.

That people want jobs at Walmart is obvious—new Walmarts in cities like Cleveland, Oakland, Calif., and Glendale, Ariz., have received thousands of applications for hundreds of jobs. But does Walmart displace as many or more jobs than it creates? Studies show that the effect of Walmart on retail employment is, at worst, ambiguous. The economist Emek Basker estimated that new Walmarts cause net job creation in the retail sector, albeit with slight job losses in wholesale. Another study estimated that each new Walmart job displaces 1.4 retail jobs, but still creates enough new labor in other sectors that its overall effect is neutral.

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Art Carden is a Research Fellow at the Independent Institute in Oakland, California, and Assistant Professor of Economics at Samford University.
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