WalMart/Big Box Subsidies Don't Work, Says New Study

When governments use public money to woo national chains, economic growth and job creation aren't worth the cost, says Stacy Mitchell of the Institute for Local Self-Reliance. Independent retailers also suffer.

September 12, 2011, 2pm PDT | Tim Halbur

Handing out multimillion-dollar subsidies to large chains has become commonplace in much of the country, explains Mitchell. These deals are premised on the idea that new shopping centers and big-box stores expand employment and create economic growth, but a recent study indicates that subsidizing retail development produces neither job gains nor new tax revenue:

The study "...indicates that subsidizing retail development produces neither job gains nor new tax revenue. Earlier this year a consortium of local governments in the St. Louis metro area found that cities and counties in the region had diverted more than $5.8 billion in public tax dollars to finance private development. More than 80 percent of these funds supported the construction of new chain stores and shopping centers.

Yet the region has seen virtually no economic growth."

The full report can be downloaded here. (PDF)

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Don't Subsidize Big Boxes at Local Shops' Expense

Published on Friday, September 9, 2011 in Business Week