I’m currently reading the book “Big Box Swindle” by Stacy Mitchell, who wrote our cover story this week. The book argues that much of what we believe about big-box development—that it creates jobs, wealth, tax dollars—are myths. Indeed, studies show that big boxes often simply shift dollars from smaller businesses to the corporate giants, many of which pay lower taxes thanks to incentives. That shift ultimately hurts the local economy instead of boosting it.
Thanks to deep pockets, a new big box can afford to undercut competition, until smaller businesses go bust. So even as the big box “creates jobs,” those independent business jobs are lost. Likewise, the dollars that were reinvested by small business owners in the community are also lost. After all, local businesses keep their profits in local banks, and they use local attorneys, accountants, designers and consultants. The big-box retailers send their profits back to corporate headquarters.
Small businesses tend to pay employees more than the big-box retailers and they tend to keep their employees longer. Mitchell documents practices by big-box retailers designed to discourage long-term employment—people who stay for too long get raises and cost more, bumping up the store’s payroll budget, which can affect the manager’s bonus.
The explosion in big-box retail is a huge driver in the migration of good-paying industrial jobs overseas—Mitchell documents case-after-case of garment and industrial workers in overseas factories making cents-per-hour to create items Americans buy in big-box stores. The result: American manufacturers literally can’t meet the demands of Wal-Mart and Target for lower prices every year—if they insist on keeping their American factories open.
Companies like Levi-Strauss and Black and Decker no longer make any products in the U.S.—not because of union demands or lazy American workers, but because the big boxes demand pricing that can only be supported on the backs of cents-per-hour wage laborers. If Black and Decker won’t do it, then Home Depot will sell their own brand of drill made in China or Czech Republic.
The result? Manufacturing jobs in the U.S. are replaced with service jobs that pay considerably less. Families that would have been middle-class in textiles or industrials are now the working poor. Where are the service jobs? In the suburbs, where public transportation doesn’t reach. So people making poverty wages have to buy and maintain cars.
How could big-box retail be such a big part of the structural problems facing this country? Because they’ve absolutely exploded over the past 20 years—so much so that the scope is difficult to fathom.
Wal-Mart (and Sam’s Club) had 1,500 old-school stores in 1988 when they opened their first SuperCenter; they’re at 8,000 today … including 2,630 SuperCenters with automotive, groceries and home & garden sections. In 2009, almost no Americans live more than 60 miles from a Wal-Mart.
Lowe’s shifted to warehouse-style retailing in 1989, opening their first big-box store that year—20 years later it has over 1,600 stores. Best Buy opened their first superstore in 1983 and switched to the current “grab-and-go” large format store in 1989; it operates over 1,300 stores now.
During that same time, our cities and suburbs got big-box fever, building roads, giving tax breaks and—every once in a while—picketing to try and keep a Starbucks open. Just look at Flowood, Ridgeland and Madison over the past five years. Do you really think there are that many more dollars being spent by Jackson metro residents? These sales happen at the expense of local businesses in and around the Jackson Metro.
On top of big-box fever—tax abatements, lost high-wage industries, infrastructure costs—Mitchell also notes that, in Arkansas, 4,000 Wal-Mart employees and 1,200 Target employees rely on Medicaid or similar programs. Corporate welfare is very real, and governments all over the country have literally been giving big boxes special breaks to help them wipe out local businesses.
Reading the book put me in mind of another corporate “big box” here in town—The Clarion-Ledger. Sure, they still offer the Comics and “Hints from Heloise” (I think), but Gannett otherwise exhibits a lot of the same behaviors as corporate big boxes.
Employees are expendable—furloughed and laid off not because the paper is losing money, but because it’s not making enough money. Profits are funneled back to corporate in Virginia instead of being re-invested in the metro. And the competitive streak is fierce—the corporate newspaper can afford to put out “products” that lose money or underprice the competition. If they can manage to get rid of that competition, the thinking goes, then their price can (and will) go up later.
Another interesting thing happens when your newspaper is corporate-owned—they design advertising programs that literally hurt local businesses. The Clarion-Ledger has just such a program with an deliciously Orwellian name: ShopLocal.com™. On the site, you can, er, “shop local” by reading circulars of … Best Buy, Office Depot, CVS, Home Depot, Target and Walgreens. Indeed, with the exception of Ace Hardware (which is a co-operative jointly owned by Ace retailers), every single advertiser on ShopLocal™ is a corporate big box or department store.
Sorry, C-L, I define local a bit differently.
“Local” is more than a word to trademark, it’s solution to the big-box dilemma—and the only real hope for a bright future for Jackson. As consumers and businesspeople we’ve got to change our behavior. Instead of ShopLocal™, we need to “Think Local First,” a considerably less cynical slogan coined by the American Independent Business Alliance (http://www.amiba.org).
Try this out. Before you jump in the car, take a look at your list and ask yourself this question: Can I buy groceries from McDade’s and Rainbow, produce from the Farmer’s or Belhaven Market, electronics from Cowboy Maloney’s, hardware from Montgomery and other ACE stores, and gardening supplies from local nurseries?”
“Think Local First” doesn’t mean staying out of chains completely, but it means developing the habit of considering local alternatives. Our national economic recovery and our local prosperity require focus, discipline and a new awareness of how our dollars can best benefit society. “Think Local First” is a great way to get started.
Previous Comments
Todd I think this is a good start. Think local first is a great idea, I try to do this in everything I buy. Another issue related to this is Government buying local. Mississippi has a horrible record of spending its tax dollars with out of state vendors when local vendors can do the same job. Also did JFP look at other options for printing you paper other than Signature offset? Based in Boulder, Colorado a very “Wal-Mart ish” company. Their “Defining Sustainable Print” is very much corporate smoke and mirrors BTW.
#150337 | Author: Nick22 | Date: Jul 31 2009
During that same time, our cities and suburbs got big-box fever, building roads, giving tax breaks and—every once in a while—picketing to try and keep a Starbucks open. Yeah, that was totally dumb. Picketing to keep a Starbucks open while there was a locally owned (and much better) Seattle Drip in the same town. In this hurry-up-and-wait society, people rush around so fast that they just don’t care if things are locally owned/grown or not. All they want to do is get in, get what they need, and get out. I admit I am guilty of that, being a woman that HATES to shop. But take a day, take it slow, and go visit the different places like those mentioned above. I know that when we do, we not only enjoy it as family time, but you can teach your children so much in the process. It makes shopping more enjoyable (and for me, tolerable).
#150352 | Author: Lady Havoc | Date: Jul 31 2009
Yet, a majority of small business continues to support and elect conservative politicians under the misguided notion that conservatives are looking out for their best interests. It defies all logical thinking. I personally don’t shop local or big box for the majority of my purchases, My first stopping point is Amazon.com. With the exception of groceries, shoes, and most clothing items, I can get everything I need at Amazon and a few dedicated electronics retailers such as Newegg.com.
#150522 | Author: Jeffery R | Date: Aug 5 2009
