How Wal-Mart Benefits the Poor
Wal-Mart is a favorite topic of debate for me, so I was happy to find that the last issue of The Economist had an interesting sidebar re: Wal-Mart. You can check it out online, here. A subscription may be required.
Anyways, it’s a pretty nice summation of the situation facing big-box stores in inner cities– they face some hefty opposition, that seems empirically unwarranted. Considering the expenses faced by inner city inhabitants, allowing discounters like Wal-Mart seems to me, the prudent thing to do.
From my frame of reference, in Detroit Suburbia, I know for a fact that my car insurance would go from about $1,300/year to almost $3,000/year if I were to claim residence in the city of Detroit, or in close proximity thereto. That’s just ONE issue facing the inner city. Now, obviously, there are actuarial calculations– and the rate of crime is higher, so I should expect to pay more to insure my belongings in such an area. But what is neglected, is that the extra $1,500 that I would need to spend on car insurance is money that I can’t spend on textbooks. Money that I can’t spend on vacations, gym memberships, CDs, a new Laptop, filet mignons, or malt liquor.
When you compound this problem with they myriad other issues cited in The Economist, it becomes apparent that allowing stores like Wal-Mart access to these locales (I believe the article cites Philadelphia) would be extremely beneficial. For starters, Wal-Mart needs to hire employees. Very few employees commute from the (wealthier) suburbs into the inner city, so it follows that jobs would then be available to the many unemployed city residents. Wal-Mart is also able to provide a greater selection of goods at a better price than many convenience stores. This is a factor not to be overlooked.
As I understand the situation, it is very difficult to attract stable homeowners to many inner city areas, a significant factor is the lack of basic conveniences. In Detroit, for example, you can’t find a movie theater. You can’t find a decent grocery store with a nice selection. You can’t find a gas station that’s not on the freeway service drives (which charge a premium price for their proximity to the freeways), etc.
So, we’ve got more jobs available to people in an area where median household income teeters around $16,000, and the provision of cheaper, readily available goods. This begins to alleviate several of the problems facing most inner-cities: notably employment and its corollary income, and the addition of convenient, affordable shopping centers for consumers. I think it’s fair to assume that these factors can certainly help to eliminate some of the other problems, for instance, increased income (and cheaper consumer goods=increased purchasing power) may decrease overall crime rates, while simultaneously helping the wage-earners establish better credit, and so on.
I don’t know. Seems like a no-brainer. But hey, if you’re happy living in squalor and crapulence, don’t ask me for handouts to alleviate your plight.
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