Walmart and Urban Areas: $100 and You're Feet are Still Wet

I’m opening with a quote from the ever observant Terry Pratchett in the fantasy book Men at Arms, which goes back to shoes again:

“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while a poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

This was the Captain Samuel Vimes ‘Boots’ theory of socio-economic unfairness.”

What does this have to do with Walmart moving in to a poor urban area of Chicago? There are plenty of people there who fit well within “Vimes ‘Boots’ theory of socio-economic unfairness.” The residents of the area have no other choice than to buy cheap goods that wear out quickly, people whose immediate needs trump sustainably or long term goals. Walmart is attempting to maintain its Monopoly by moving from a rural setting where they counted on many people wanting many disposable things to an urban area where people have no choice but to buy the least expensive, and often least durable option. And it will ultimately wind up like a cheap shoe for the community.

A University of Illinois, Chicago study of a Walmart that moved into a poor urban area looked at its impact on local businesses employment and government revenue, out to see whether or not a community welcoming Walmart is actually getting the employment and revenue the store promises. It found that:

"stores near Walmart were more likely to go out of business, eliminating the equivalent of about 300 full-time jobs -- about as many as Walmart initially added to the area."

Walmart essentially boosts jobs for the community initially, but then ultimately closes down the competition, making not change in job numbers. The community let in Walmart because it needed jobs immediately, but ultimately gained nothing in terms of employment. The head of the study states that:

"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," Merriman said. "This means that communities around the city shouldn't see Walmart or other big-box retailers as a panacea for local economic problems"

Although the study points out that the retailers that were still in business after the introduction of Walmart retained their current wages and employment, 82 of the 306 businesses studied went out of business in the 8 spanning months. What the study doesn't mention are the wages and employment of the companies that did stay in business, it could be that they were paying lower prices already and that the 82 that went out of business paid more to their workers.
If Walmart is basically an employment shuffle, causing employment for some in the community and unemployment for others, could it be considered a downward shuffle. In the long run it may start costing the community, Walmart jobs pay poorly and have few options for advancement, the other business may eventually have to cut jobs or wages in order to compete, creating a poorer community as a whole which will be even more inclined to buy things at Walmart. The study is from 2008, I wonder what the neighborhood is like now.
The link is here