Wal-Mart at the gates

Chris, excellent point "whatever gives the most to consumers for the same cost should be viewed as superior."

Now, what are the costs? If I underwrite local employers health care costs with my tax dollars at a per worker per year cost of $100 (let's say) and I underwrite a Wal-mart employee at $750 per annum, does the $5 I save at Wal-mart count? It does if I'm a Wal-mart employee that might not pay any net taxes to the state - but it does matter to those of us that do pony up.

Let me extend the same tortured example ;-). Now, what if the charitable giving of the local buisness was $10 per employee per annum vs. a Wal-mart $0.10 per annum. Local is looking better.

One last extrapolation before bedtime. What if between their own business and that $30 the local folk churns back into the local economy, the "average" job retention was 2.5 years vs. 6 months for Wal-mart - saving 5 times the tax expense of possible unemployment, job placement or other services?

Folks use the same kind of "extended and extrapolated" costs estimation for automobiles or coal-fired electricity or any number of economic activities where the "true" cost is aggressively pushed off on the private sector via government subsidies.

So, as facile as it sounds "low cost good". Now, what does an item "really" cost at Wal-mart vs COSTCO vs Target vs my local Tru-Valu vs Southern Seasons vs Mom & Pop?

Ya know, I can sit here and answer every charge against Wal-Mart as either "ya got me there, but it's still outweighed by the good" or "you're misinformed."

But maybe folks in town need to stop and think about things a bit. There's gonna be a second Wal-Mart for Chapel Hill and Carrboro residents to shop at very shortly. For the second time, it will be in another county -- indicating that municipality planners have not learned from the missed opportunity of New Hope Commons.

The towns and county's position will not prevent the Wal-Mart from coming just down the road. It will not change the economic impact (I say good, you say bad) of that coming. So why act like a little kid and just cover our ears and say "lalala I'm not listening?" It just doesn't make sense.

If Chapel Hill honest to gosh doesn't like Wal-Mart, why doesn't it try to affect change where it can, rather than where it can't?

Find ways to make local businesses more profitable, via tax incentives or easier-to-get permits for things like serving wine and alcohol outside. I'm pretty sure that Carrboro has the highest municipal property tax in the state, and Chapel Hill would do well to listen to the businesses a bit more and put in some convenient parking and work on crime a bit (there was an armed robbery just last week if I'm not mistaken).

Carping up and down about how evil "big box stores" are doesn't do anything. It makes me unhappy (due to the anti-business attitude) and it makes you unhappy (Wal-Mart's coming here anyways) and there's no tax revenue to show for it.

So I say to you, fellow residents and elected officials of Chapel Hill, Carrboro, and Orange County -- Either do something or be quiet.

While I disagree with the route the towns have taken thus far, it can't be changed to any effect at this point, and we all just want the area to be better than it was before. I, and I imagine many more qualified economists in town than myself, would be happy to sit down with officials and try to figure out a better game plan than the do nothing and grumble approach.

My contact information is at http://www.dailytarheel.com, and there is a very qualified Business School and Economics Department right here in town. I suggest using them.

Chris, I don't see other folks carping as a "la la la" or an either/or proposition.

I agree we can do much more to improve local business and job growth - without sacrificing some of our key "Chapel Hill" values. A good start would be an economic development office covering all of our Town. While Downtown is important in many ways, it isn't the whole commercial game - we need to stop obsessing exclusively on it and broaden our efforts to the other economic "hotspots" in Town. Trading required parking allotments for higher commercial development density at Eastgate/Ramsgate/Chapel Hill North/University Mall is an example of an innovative technique (at least for Chapel Hill) of encouraging business - done correctly (and with proper transportation planning) we can reduce traffic while increasing customer throughput. Jobs growth needs to get some focus. For too long we've relied on UNC to be the "local" jobs growth engine. Downtown, I think (maybe 'cause I work there), is an attractive place to work. We should leverage that attractiveness to bring in more jobs. Speaking of Downtown, the Lot #5 development still demonstrates some weak economic thinking on economic balance - placing boutique shopping over a signature business. I prefer a grocery store - that should attract walking folk from nearby neighborhoods and balance out the Downtown economic ecology.

So, yep, there's a lot that could be done other than "la la la".

Will, thank you for putting your ideas out there! To continue your thinking further, how about an conscious economic development strategy for the town to increase the commercial tax base by some % of our town budget over some period of time, translate that into square footage, define where we want that growth and what it should look like, and make a commitment to facilitate timely approval of projects that explicitly meet this criteria? Right now I am not sure that most of us (and I am including myself as among those needing some education on this matter) even understand what one million, or five million or 25 million dollars of new or redeveloped commercial development translates to in terms of square footage, or in terms of dollars in the tax coffers, or in terms of overall economic impact in salaries, local spending, number of police officers we can hire, impact on the school budget and so forth. If we understood more about what that kind of development equals in terms of benefits and liabilities to our community, we could have a more affirmative economic strategy, rather than what some perceive as a more defensive strategy.

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"Now, what are the costs? If I underwrite local employers health care costs with my tax dollars at a per worker per year cost of $100 (let's say) and I underwrite a Wal-mart employee at $750 per annum, does the $5 I save at Wal-mart count? It does if I'm a Wal-mart employee that might not pay any net taxes to the state - but it does matter to those of us that do pony up."

Are there any independent studies that say retail workers in locally-owned companies use only $100 in taxpayer funded services per year? Can you provide the citation for that number?

Don't forget to also include the spillover savings you receive into that calculation as well.

According to research from the independent research firm Global Insight (about as close to an unbiased source as you will find in this debate), Wal-Mart's overall impact on the US economy saves the average family over $2,300 per year.

From the Global Insight research:

"the expansion of Wal-Mart over the 1985 to 2004 period can be associated with a cumulative decline of 9.1% in food-at-home prices, a 4.2% decline in commodities (goods) prices, and a 3.1% decline in overall consumer prices as measured by the Consumer Price Index-All Items, which includes both goods and services.

The main driver of this impact was a 0.75% improvement in the overall efficiency of the economy. Increased capital intensity and lower import prices were secondary drivers. The 3.1% decline in the price level was partially offset by a 2.2% decline in nominal wages, so that the net effect was to increase real disposable income by 0.9% by 2004."

Interesting editorial today in the NY Times today about Maryland's successful passage of a law requiring Wal-Mart and other large employers to spend a certain % on health insurance or make a payment to the state's Medicaid fund.