PALOUSITICS EXCLUSIVE - Wal-Mart: What's Next? Part Three

This is Part Three of a series of articles that will explore what happens when a Wal-Mart Supercenter comes to town.

The information contained below is being made publicly available on the web for the first time.

I've always dreamed that one day the opponents of Wal-Mart in Pullman will make a factual argument to support their case, rather than resort to "special-interest propaganda," "symbolism over substance," "pejorative labels," and "playing on the average citizen's distrust of corporate America," as detailed by Richard Carson. I'm still waiting.

"Progressive" Amir Hassan writes in today's Summer Watermelon:

Likewise, small businesses find themselves unable to compete with Wal-Mart’s rock-bottom prices. A Pullman Supercenter will choke and kill much of our beloved local commerce.

I suppose one can't argue with a self-styled "expert" on Pullman economics who is also a Rhetoric and Composition grad student from Seattle who uses apocryphal stories and far-left websites to support his arguments. Nevertheless, let's take a look at some hard data anyway.

The Simeon Partnership, an economic and public policy consulting firm in Bainbridge Island, WA, prepared a study in 2005 of long-term economic impacts of the Wal-Mart that opened in the small coastal Washington city of Aberdeen back in 1994. The study examined impacts on local businesses, as well as tax revenue and worker wages. The brief summarizing the study can be downloaded here.

Some highlights:

“Not one business went out of business because of Wal-Mart,” says Michael Tracy. He should know. Tracy heads up the Grays Harbor Economic Development Council. His organization has tried to identify and help businesses affected by Wal-Mart’s decision to locate in Aberdeen in 1994.

“Understand,” says Tracy, “there was high unemployment at the time and businesses were going out of business right and left. But, not because of Wal-Mart.” Wal-Mart slowed the flow of people leaving Grays Harbor to do their shopping in Olympia, he says.

Aberdeen and Grays Harbor County had real gains of 13 percent and 7 percent, respectively in taxable retail sales from retail trade from 1995 through 2003.

“The threat to locally owned businesses is not Wal-Mart,” Tipton says, “it’s I-5 to Tumwater, Lacey and Portland. Wal-Mart has slowed [Aberdeen’s retail sales leakage] considerably.” When local shoppers stay in town to buy their basics at Wal-Mart, he says, they are more likely to look locally first for their other needs and to comparison shop at home, given the opportunity.

Wal-Mart captured an increasing share of a increasing retail sales base in Aberdeen and Grays Harbor County between 1995 and 2002. As Figure 3 shows, taxable retail sales from retail trade in Aberdeen and Grays Harbor County kept pace with inflation even without Wal-Mart over this period, demonstrating that Wal-Mart not only increased its market share, it helped grow the size of pie.

...the city’s revenues have grown in all categories since 1994. Sales and Use Taxes have been a good source of revenue growth – up 9 percent after inflation from 1994 through 2003 – but the big growth category for the city’s general services has been Business and Utility Taxes, which was up 16 percent after inflation. These are taxes levied by the city on various special services like water, sewer and garbage.

Adjusted for inflation, Wal-Mart’s sales tax contribution to the city grew 89 percent from 1996 to 2002. At the same time Wal-Mart’s share of city sales taxes paid doubled as its tax contributions grew well ahead of overall city sales tax growth.

Total wages in Grays Harbor County paid by stores in the general merchandise category, like Wal-Mart, grew from $4.6 million in 1993 to $6.5 million in 1994 the year Wal-Mart opened – a 39 percent increase after inflation. And, average general merchandise employment went from 345 to 477 jobs.

On average general merchandise stores in Grays Harbor County paid their employees about $13,263 annually in 1993 before Wal-Mart came to town. By 2003 this average annual wage had grown to $21,432. Even after adjusting for inflation, general merchandise workers experienced 21 percent growth in their real average wages.

Tuesday: We'll take a look at what happened over in Sequim, after much controversy in opening a Wal-Mart Supercenter there.

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