What Illinois Can Learn from Texas About Wal-Mart

After opening its first Chicago store on the city's west side in 2006, Wal-Mart has unsuccessfuly attempted to open a second store on Chicago's south side in one of two locations - Pullman and Chathman - which would bring groceries, clothing, retail merchandise, and jobs to a part of the city that is desperate for all of those.  What's standing in the way of economic development, life, hope and jobs for the south side neighborhoods of Chicago?  Organized labor and their political Democratic enablers. 

A recent study reportedly shows that the west side Chicago Wal-Mart created about 300 jobs, but contibuted to a job loss of about 300 from businesses on the west side that closed after Wal-Mart opened in 2006.  But the Chicago Sun-Times presents some pretty devastating criticism in an editoral titled "Anti-Wal-Mart study just doesn't add up":

"Too bad the researchers didn't count the jobs at the new businesses that opened after Wal-Mart's arrival on the West Side. There are roughly 22, according to the local alderman, Emma Mitts, including Menards, Food 4 Less, Aldi, two bank branches, CVS and Burlington Coat Factory. That information wasn't available, the researchers say.

Too bad they also didn't factor in other reasons, unrelated to Wal-Mart, nearby businesses closed. Nor did they compare West Side business closure rates with rates in other similar communities. Again, that information wasn't available. Without this key data, this research is only a starting point -- and nothing close to a definite statement about Wal-Mart's economic impact."

It's worth noting that those lost [approximately 300] jobs paid low wages, an average of $9.02 an hour in 2008, according to the study. That compares with the Chicago Wal-Mart's reported full-time average wage of $11.77."

MP: Even if there was no net gain in jobs from the Chicago Wal-Mart, the cost savings to area shoppers could have been significant from having access to Wal-Mart - an estimated $2,500 annual savings per household in 2006 according to this study.  Additionaly, the state of Illinois experienced significant job losses in general in the three years following the opening of the Chicago Wal-Mart in 2006 (see chart above).  In fact, the number of jobs in Illinois was the same in January of this year as in January of 100, so it's hard to blame Illinois's (and presumably Chicago's) stagnant economy on Wal-Mart.    

And it could certainly be correlation and not causality, but it's interesting to note that one of the states that has seen the most robust job growth over the last decade or more - Texas (see chart above) - has also been one of the states where Wal-Mart has expanded the most, suggesting that more Wal-Mart stores can be consistent with more, not fewer, jobs.  Especially in "right-to-work" states like Texas, where organized labor has less political clout to stop new Wal-Marts, like they do in Illinois.   

See this Dallas News article about Wal-Mart in Texas, where it employs 144,470 workers and had $35 billion of sales in 2009 - to put that amount in perspective, it's more than the Gross State Product of entire states like Vermont, Wyoming, North Dakota, Montana, Alaska, or South Dakota.