Calgary Herald Column: In Defence of Wal-Mart

This week's Herald column from yours truly argues that Wal-Mart has every right to shut down a store, and that suggestions to the contrary are part of a broader - unjustified - anti-Wal-Mart campaign:

 

...The right to close your business ought to be pretty close to absolute. If the business is losing money, then shutting it down makes sense. Conversely, if the business is profitable and closes anyway, then that profit is there to be had by someone else.

 

(...)

 

How ironic that in a country that has seen so many attempts to block Wal-Mart, the closure of one would become a crisis.

 

For all the dire predictions that accompany the arrival of Wal-Mart, you'd think the residents of Jonquiere would have cause to celebrate.

 

Not to mention the UFCW and its allied forces, who missed what was surely a glorious opportunity. Assuming for that moment Wal-Mart got the union heebie-jeebies and fled town--why not open a unionized store in its place?

 

These employees would have kept their jobs, no doubt with much higher wages and benefits, and the world would marvel at the vast emptiness of Wal-Mart's anti-union arguments.

 

Or, maybe it's not all that simple.

 

It is Wal-Mart that is providing tens of thousands of jobs across this country. It is Wal-Mart that is giving Canadian families the opportunity to increase their purchasing power.

 

It is a real world win-win, and the anti-Wal-Mart forces are only hurting those whom they claim to be helping.

 

Yet, despite the hue and cry in Jonquiere, there remain communities in this country that have resisted Wal-Mart. The company is just this month opening its very first store in Vancouver.

 

There remains a belief that regardless of the union status of its employees, the arrival of a Wal-Mart means the end for "Mom& Pop" small businesses. However, the evidence shows no net negative effect on small business, and in some cases the effect can be positive.

 

University of West Virginia economists Russell Sobel and Andrea Dean set out to measure (PDF) the impact of big box stores on small businesses in the U. S., and found what they termed a trend of "creative destruction."

 

What that means is that although Mom&Pop hardware or grocery might go under, other types of small businesses rise in their place, fuelled in part by the money now being saved via cheaper goods.

 

When the researchers compared the five states with the highest rate of Wal-Marts per capita and the five with the lowest, what they found was that, on average, the former had more small businesses per capita and higher rates of self-employment.

 

Throwing up roadblocks and filing lawsuits against a corporate giant like Wal-Mart might seem like a noble means of sticking it to the proverbial man, but the facts tell a different story.

 

In other words, the Wal-Mart bashers should be careful what they wish for.