Walmart Fails to Create Jobs in Chicago

Does Walmart add to homeowners' quality of life when it moves in to a new urban neighborhood? Not necessarily, so says a recent study.

Some might welcome having the same opportunity suburbanites do to buy fishing gear, a new printer and cheap socks all in one place. But those looking to Walmart to create jobs or stimulate other local businesses -- the kinds of things that add to the quality of life for local residents -- are out of luck.

According to a study from the University of Illinois at Chicago and Loyola University Chicago, Walmart's only Chicago store has done nothing for local employment or local business. The study could have implications for other urban areas pondering a Walmart store for their communities.
The mega-mart opened its Austin outlet on the western border of Chicago back in September 2006, and emphasized the benefits to the local economy by way of job creation. The study refutes this notion.

The 67-page report, titled "The Impact of an Urban WalMart Store on Area Businesses: An Evaluation of One Chicago Neighborhood's Experience," found that the equivalent of 300 jobs were lost as a result of the store's opening, just about as many as Walmart initially added to the community.

Telephone surveys for the study were conducted once before the store opened and twice afterward. The last one, conducted from March through November 2008, found that 82 of the 306 businesses originally surveyed, or 27%, had gone out of business during the study period.

This seems to disprove the notion that Walmart and other big-box retailers try to promote– that they have a positive effect on the areas they enter via job creation and increased traffic to its surrounding businesses.

"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," said David Merriman, a professor of public administration at UIC and one of six co-authors of the study. "This means that communities around the city shouldn't see Walmart or other big-box retailers as a panacea for local economic problems."

Back in the middle of December, Mayor Richard Daley voiced his support for Walmart's desire to expand into a second location, at 83rd Street and South Stewart Avenue in the city's Chatham neighborhood. He cited the potential of new jobs as a reason why the community, its aldermen and unions should approve the new store.

The City Council recently postponed decisions that would give Walmart the Okay to open its doors at this and four other locations the company has been considering. Part of the issue involves Walmart accepting the living wage ordinance, which would require all retailers that receive city subsidies and employ more than 50 people to pay workers at least $11.03 per hour.

Walmart points out that the study was supported by a grant from the Woods Fund of Chicago, whose self-stated goal is "to increase opportunities for less advantaged people and communities in the metropolitan area, including the opportunity to shape decisions affecting them."

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