FWIW

As anyone in Austin knows, Wal-Mart has planned an unusually big box on the edge of a residential neighborhood, and this has generated considerable controversy. (We call this litotes.) Being a researcher, I wanted to see whether assertions made by critics of the current plan had something significant to back them up. For me, an article in a peer-reviewed journal is the gold standard, so that's what I was looking for. I also looked at web sources, studies cited by various sides, and arguments made by advocates. I only spent a few hours on the task, so this is my highly personal take on just a few hour perusal of that research. YMMV.

There are two major issues about the current Wal-Mart plan: traffic, more general impact on neighborhood.

The first is traffic, and that one I stopped researching pretty quickly, as everything I looked at suggested that the ANA newsletter has it dead to rights. I didn't come across anything that caused me to doubt that analysis, and much to support it.

The plan will not result in 900 trucks a day unloading, nor will it result in hundreds of 18 wheelers on Mo-Pac, but, assuming the same number of cars as other Wal-Marts, it is likely to result in approximately 20,000 cars a day visiting that location. (Since this is an unusually big location, I wasn't clear if that number is conservative--my hunch is that people should assume that Wal-Mart expects the number of cars for which they are providing parking.)

The current plan is inadequate in regard to public transportation (for which, I have heard anecdotally, Wal-Mart is notorious). The (already barely adequate) roads in the immediate vicinity will almost certainly be overwhelmed, so there will, necessarily, be some kind of spillover effect on other potentially arterial roads like Foster, Shoal Creek, Cullen, but it's hard to say just how bad that will be.

The second issue is, generally, effect on the neighborhood. Within that general category, there have been three main accusations: that crime would increase; that small businesses would be hurt; that Austin would have to pick up a tab. My research suggests the first claim is neither verified nor falsified (but my brief research has made me pretty skeptical); the second is true (admitted even by defenders of Wal-Mart); and the third is supported by very good research (and not refuted by defenders of Wal-Mart).

Here's the science, as they say:

A study of crime at Wal-Mart v. Target (as reported in news outlets): www.walmartcrimereport.com/report.pdf
See also: http://www.wakeupwalmart.com/press/20060511.html

Personally, I wasn't wild about this study for several reasons. It depends upon news reports (rather than crime stats compiled by the Feds, for instance), and does not control for fairly important variables (like crime in the city being studied). It was better than the only other thing I found on the topic, though, which was an undergraduate thesis. I couldn't find any articles in refereed (scholarly) journals on the issue of Wal-Mart and crime (but maybe I wasn't using the right search terms or databases). I didn't expect to find studies of Wal-Mart specifically, but I did think there would be studies of the impact of 24 hour stores and crime.

I did notice that several of the anti-Wal-Mart sites did not claim an increase in crime, so I'm not sure what to make of that. (My intuition is that, if they could make an even plausible case for an increase, they would, but there are various reasons I might be wrong about that.)

General Impact of Wal-Mart on Communities:

The wikipedia entry "Criticism of Wal-Mart," especially the section "Economic Impact" summarizes the issues. It has some good sources, although very few of the scholarly studies. Still and all, it seemed to me pretty good.

If you have access to CQ Researcher, the relevant report is "Big Box Stores." It presents both sides of the issue very well. I highly recommend it. (If you have access to the UT Library databases, you can find it under "Databases and Indexes" and then under "CQ Researcher.")

A frequently cited study is:

Dube, Arindrajit and Ken Jacobs. "Hidden Cost Of Wal-Mart Jobs: Use of Safety Net Programs by Wal-Mart Workers in California" also at: http://www.dsausa.org/lowwage/walmart/2004/walmart%20study.html

This study concludes that Wal-Mart pays very low wages and "At these low-wages, many Wal-Mart workers rely on public safety net programs— such as food stamps, Medicare, and subsidized housing—to make ends meet. The presence of Wal-Mart stores in California thus creates a hidden cost to the state’s taxpayers."

Although I wasn't wild about the fact that this was not published in a peer-reviewed journal, I couldn't find any obvious faults in the methodology. (But, I didn't recalculate their numbers, and statistical analysis is not my long suit.) Perhaps more important, other studies come to same conclusions. Probably most important, the most damning evidence on that point is from Wal-Mart itself--look at the figures that Wal-Mart releases about their pay and number of employees who have benefits, and then try to figure out how their employees are supporting a family. Even Wal-Mart does not claim that they provide a wage that could support a family, and they're open about being opposed to providing benefits for employees. (The defense is that low wages and no benefits are offset by low prices, but, until doctors and pharmacies start accepting low prices as payment, that doesn't really answer the question.)

Stephan J. Goetz, Hema Swaminathan, "Wal-Mart and County-Wide Poverty" SOCIAL SCIENCE QUARTERLY, Volume 87, Number 2, June 2006.

Stephan Goetz is co-author of two of the most thorough articles on the topic. This one concludes that Wal-Mart is not always bad, but, on the whole:

"After carefully and comprehensively accounting for other local determinants of changes in poverty, we find that the presence of Wal-Mart was unequivocally associated with smaller reductions in family-poverty rates in U.S. counties during the 1990s relative to places that had no stores. This was true not only in terms of existing stores in a county in 1987, but also an independent outcome of new stores built between 1987 and 1998. The question of whether the cost of relatively higher poverty in a county is offset by the benefits of lower prices and wider choices available to consumers associated with a Wal-Mart store cannot be answered here. However, if Wal-Mart does contribute to a higher poverty rate, then it is not bearing the full economic and social costs of its business practices. Instead, Wal-Mart transfers income from the working poor and from taxpayers, though welfare programs directed at the poor, to stockholders and the heirs of the Wal-Mart fortune, as well as to consumers. These transfers are in addition to the public infrastructure subsidies often provided by local communities. Regardless of the distributional effects, the empirical evidence shows that the Wal-Mart business model extracts cumulative rents that exceed those earned by owners of other corporations, including Microsoft and Home Depot. In conclusion, the costs to communities in terms of labor displacement and higher poverty need to be weighed against the benefits of lower prices and greater shopping convenience. Similarly, once local businesses have been driven out, the possibility of monopolies or oligopolies emerging in retailing (both on the input and the output side) needs to be considered carefully by public policymakers."

(Both of those studies are available at http://www.wakeupwalmart.com/research/
although they were not performed by that organization)

Personally, the article I recommend most is:

Irwin, Elena G. and Jill Clark. "Wall Street vs. Main Street: What are the Benefits and Costs of Wal-Mart to Local Communities?" Choices 2nd Quarter 2006 (21:2): 117-122. (available through http://www.choicesmagazine.org).

Conclusion:

"Consumers have benefited from Wal-Mart's tremendous cost efficiencies in the form of greatly reduced retail prices, which generate substantial savings to U.S. customers annually. However, evidence also shows that Wal-Mart does not bear the full economic and social costs of its business practices. As a result, the benefits and costs are unevenly distributed across individuals. Those who are employed in non-retail sectors of the economy reap substantial benefits from lower prices and absorb some of the potential costs if tax revenues are needed to cover increased social costs. Those employed in the retail sector absorb the additional cost of lower wages, fewer benefits and a potentially shrinking employment base" (119).

My take on the whole issue

Having looked over the various arguments, I've come to these conclusions (again, I emphasize, YMMV):

1) the opening of a Wal-Mart means the closing of a significant number of small businesses (even the defenders of Wal-Mart grant this, but argue that it doesn't really matter).
2) if those businesses are supporting families or giving a "living wage" (that is, they provide full-time employment with benefits), then Wal-Mart replaces good jobs with bad ones.
3) Wal-Mart costs a community a lot, indirectly in terms of infrastructure (especially transportation, costs of providing the benefits that Wal-Mart intentionally ducks through keeping people to part-time employment, and so on) and often directly in terms of subsidies.
4) the community benefits to the extent that they get a lot of part-time, low-wage, no-benefit jobs and lower prices. If all of Wal-Mart's employees are married to people who have jobs with good wages and benefits, then this is a significant benefit to a community (but, as far as I can figure, iff).
5) however, those lower prices are achieved through forcing supplying businesses to shift to lower wages (and the claims of union-busting are very well-supported), so that the impact of a single Wal-Mart reaches far beyond the community in which it is located. In other words, for Wal-Mart to have an overall beneficial impact on the economy, two conditions have to prevail:
a) Wal-Mart's employees be married to people with jobs that have good wages and benefit packages, AND
b) the people working for the companies that supply Wal-Mart must be married to people with good wages and benefit packages.
5) Wal-Mart strives for a monopolistic business model, so, it's deeply opposed to the free market model of capitalism. That's a fairly important point, and it's one that's often missed. Defenders of Wal-Mart sometimes try to spin the opposition as simply coming from an anti-business contingent, but it's worth remembering that a lot of the hostility to Wal-Mart is from businesses. If you believe that capitalism is the best economic system because it fosters competition, then you have to be really troubled by Wal-Mart. That's why some of the really critical articles about Wal-Mart are in business magazines (see, for instance, http://www.fastcompany.com/magazine/77/walmart.html).
6) there isn't any really good evidence as to whether Wal-Mart increases crime, nor whether a 24-hour retailer increases crime (although I did run across quite a few scholarly pieces that argued that mixed living/retail plans do reduce crime).

This research did change my view on this whole issue. I've never been a huge supporter of Wal-Mart (I assume I've shopped there at some point, but I don't remember when), but I'd always had the attitude that, since we're in a capitalistic system, and since some people do shop at Wal-Mart, NIMBY is a perfectly valid response. The weird thing about doing this research is that it persuaded me that it's precisely from the viewpoint of capitalism that Wal-Mart is most destructive. Wal-Mart undermines the free market. Wal-Mart benefits the community only to the extent that other businesses behave better than they do--giving better wages and benefits. That means that this really is not just about whether there is a Wal-Mart within a mile of my home, or whether this Wal-Mart is 24 hour, or two story, or how much parking they have. It means that this is about whether Wal-Mart provides a living wage with benefits to its employees, and whether it allows its suppliers to do so with theirs.