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Shocker: Defending Walmart, NY Post Misinterprets Study
By
John Del Signore
Published Jan 17, 2011
Modified Jan 18, 2011
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By
John Del Signore
Published Jan 17, 2011
Modified Jan 18, 2011
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As you may have heard, there have been some objections raised to a rumored Walmart location in East New York. The City Council is holding hearings at the beginning of next month, and Public Advocate Bill de Blasio recently released a report suggesting that a Walmart in NYC would "eliminate more jobs than it creates, result in the loss of independently owned small businesses, and create an increased burden on taxpayers." But the big box company probably isn't sweating it, because its got NY Post columnist Andrea Peyser in its corner. In her column today, titled "Absurd Wal of Fear," Peyser targets one of the studies cited by de Blasio:
The study states—bear with me here—that the study's own findings 'do not imply that the growth of Walmart has resulted in lower absolute levels of retail employment... We suspect that there are not aggregate employment effects, at least in the longer run, as labor shifts to other uses."
Phew! Translate that mouthful into English, and the same study that 'proves' Walmart's a job killer suggests the opposite may be true. You see, when a Walmart opens, it draws new stores into the area. The result is that people get jobs. Perhaps in other industries, such as construction and hospitality. But don't ask me. Ask the dang study.
Okay, here is that dang study [pdf]; the page you'll want to turn to is number 24. We're waiting to hear back from the study's co-author, David Neumark of the University of California, Irvine, but you may be shocked to learn that Peyser's reading of the study is a tad distorted. Despite her willful misinterpretation, the study does in fact assert that "a Wal-Mart store opening reduces county-level retail employment by about 150 workers, implying that each Wal-Mart worker replaces approximately 1.4 retail workers. This represents a 2.7 percent reduction in average retail employment." And that little ellipsis in Peyser's pullquote? Here's some of what she left out, starting immediately after that first sentence:
Like in all studies of this type, the estimates are relative to a counterfactual of what would have happened to retail employment absent the effects of Wal-Mart. From 1961, the year before the first Wal-Mart store opened, through 2004, the last full year for which we have a count of the Wal-Mart Discount Stores and Supercenters, retail employment in the United States grew from 5.56 million to 15.06 million, or 271 percent, considerably faster than overall employment (242 percent). If each of the 3066 stores present in January of 2005 reduced retail employment by our estimate of 146 workers relative to the counter-factual, then our estimates imply that, in the absence of Wal-Mart, retail employment would have instead grown to 15.51 million as of 2004, or 3 percent higher than the observed figure.
So the negative employment effects of Wal-Mart that we estimate simply imply that retail employment growth was a bit more modest than it would otherwise have been, growing by 271 percent from 1961 through 2004, rather than 279 percent. The estimates do imply, however, that retail employment is lower than it would have been in counties that Wal-Mart entered, and hence that Wal-Mart has negative rather than positive effects on net job creation in the retail sector.
Phew! Translate that mouthful into English, and it seems the study isn't subverting its own premise, Peyser is just subverting the study to meet her demand for cheap flat screens. Like most careful academic studies, this one does indeed have caveats—unlike Peyser's demagogic polemic. But to be fair, it's certainly possible that if this Walmart does finally open in Brooklyn, it will—as Peyser predicts—compensate for the loss in retail jobs by indirectly spurring hiring in construction, hospitality, and the burgeoning field of unicorn farriers, or even double rainbow cinematography. Anything's possible!
Update: Responding to our inquiries, Professor Neumark tells us, "You are correct. That is a misinterpretation. The study's results do imply that entry of a Walmart store does imply fewer retail jobs than there would otherwise be. On the other hand, Walmart clearly does deliver some benefits, in particular lower prices that likely benefit low income people. Walmart's efficiencies contribute to both outcomes—fewer jobs required in retail, and lower prices."
Tagged
andrea peyser
bill de blasio
ny post
retail
union
walmart
walmart nyc
John Del Signore
Originally from the Albany area, John Del Signore has called NYC home since 1995. In addition to his thousands of meticulously-crafted bespoke blog posts for Gothamist, his writing has also been published in The Awl, Deadspin, The Nervous Breakdown, and performed at The Brick Theater in Brooklyn.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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