Study claims Chicago Wal-Mart cost area jobs

January 9, 2010 9:47:14 AM PST
A new study out shows the one and only Wal-Mart in the city of Chicago may not be a job-generating machine like many supporters claim. But some question the conclusions reached by local researchers.As early as next week, the City Council is expected to revive the debate over plans for a new Wal-Mart on the South Side. But a conveniently timed study says the retailing giant leaves less of an economic footprint than you may expect.

"Usually by this time of year we have a lot. But, as you can see, it's empty," said Mike Ramirez, thrift store assistant manager.

Mike Ramirez says given the recession, business at his West Side thrift shop should be booming. It's not. And he blames his new neighbor.

"This new Wal-Mart is taking a lot of my customers away," said Ramirez.

The city's one and only Wal-Mart opened in the Austin neighborhood in 2006. A new study study by researchers from Loyola and UIC claims 82 businesses within a four-mile radius of the store have closed, thanks -at least in part- to the mega retailer's presence. That, the study's authors say, has cost the community nearly 300 jobs, about as many as Wal-Mart added.

"The message is Wal-Mart is not a panacea. What Wal-Mart will do is going to change the kind of businesses you have in your area. It will create some jobs but force others out of business or prevent them from opening," said David Merriman, Department of Economics, University of Illinois at Chicago.

Wal-Mart's supporters point to a bevy of new businesses, mostly chains that have opened around the West Side store.

"Wal Mart draws business, they don't run 'em away," said Ald. Emma Mitts. "Not one business, not one has come to me and said 'we're closing because of Wal-Mart.'"

Researchers say many of the stores that fail are mom and pop operations - individually nearly invisible in their loss but collectively part of the fabric of a community.

"I'm pretty sure sooner or later this will close because we're not making what we're supposed to make every day," said Ramirez.

The debate over allowing construction of a new South Side Wal-Mart is expected to center more on organized labor's opposition to the union-free chain than the results of an economic impact study. A spokesman for Wal-Mart says the study was funded by a group with ties to labor. Researchers deny their work was influenced.

Click here to read the study