Ithaca HOUR Multiplier part 2

JOBS
The RKG DEIS admits that Wal-Mart would take jobs away by killing businesses
here today. "Because there is no obvious source of unmet retail demand by
the local population... a greater portion of Wal-Mart's projected sales would
need to be captured from existing area stores (p.5)." This is expected to be
over $20 million per year (p.10), of which about $7 million are lost by city
stores. Mass merchandizers can expect losses between 10% and 33%. Other
stores would lose 2%-4% of sales. Downtown businessman Jeff Furman remarks,
"The Ithaca Journal quoted the RKG study, saying only 4% of store income
would be lost. Four percent is a lot for these struggling small businesses.
We're talking about their margin for existing."
RKG's study admits as well that "While some area merchants could have
absorbed a marginal reduction in sales to new competition in years past,
their ability to absorb future sales losses has been weakened by the
recession (p.85)."
Wal-Mart claims to create so many jobs by selling so much stuff, that we
wouldn't need the jobs lost in the stores that close. The RKG study does not
explain this conclusion. But a Massachusetts study says a typical Wal-Mart
adds 140 jobs and destroys 230 higher-paying jobs (Donella Meadows,
professor, Dartmouth). Another independent study not paid for by Wal-Mart
(Humstone Associates, 1993) projected an expected net loss of 200 jobs in St.
Albans, Vermont, because Wal-Mart sales are less "labor intensive" than small
locally-owned businesses: Wal-Mart employs only 70 people for every $10
million sales, while small retailers employ 106 people per $10 million sales
(Humstone, p.20).
Why such different job estimates? The RKG study, for example, does not
include the closing of Woolworth's, with dozens of jobs, even though "It can
be assumed that a major share of the transfer [of sales] would be borne by
Woolworth's and CVS Pharmacy (p.103)." A Wal-Mart in Ithaca would have an
impact like the Watertown Wal-Mart (p.76). The Watertown Woolworth's saw a
double-digit drop in sales, mostly because of Wal-Mart there (p.xii). An
unreleased section of the DEIS (p.93) estimates that half of all sales taken
from Ithaca stores would be taken from Woolworth's.
The DEIS does not describe the closing of other Commons businesses, or the
loss of those jobs that follow from the closing of Woolworth's. Nor does the
EIS calculate the net job change resulting from Wal-Mart's "induced
development" on Elmira Road, which takes even more business (>$1,000,000
sales) away from downtown.
The DEIS quotes business people who have survived the five Wal-Marts which
surround Ithaca. Yet these are new Wal-Marts, just one or two years old,
which have not had time to do full damage. The famous study by Kenneth Stone
(The Impact of Wal-Mart Stores, 1993), shows that business failures
accelerate after Wal-Mart has been in town three to five years. "While
Wal-Mart may be thriving, the decline in the rest of the stores means that
the net effect is a drop in the number of dollars spent in town" (Stone,
Mississippi Business Journal 6/8. He adds, "the money a Wal-Mart drains
from the community won't come back; it isn't in the hands of local people who
might invest it back in the community. Then you lose a sense community
loyalty, that small town atmosphere, and you are in danger of becoming a
bedroom community. You don't have business and civic leaders; you have
transient managers." As the Valley News of Plainfield, New Hampshire says,
"Fewer merchandising profits circulate within the community. Wal-Mart
profits go to Arkansas. Wal-Mart handles most of its insurance, legal
services and banking at its headquarters, too" (6/93).
As if these facts were not ominous enough, the RKG report expects a sudden
10% leap in Wal-Mart sales taken from existing stores, five years later, when
it expands to 155,000 square feet. After ten years, Wal-Mart would be taking
17 million dollars per year from businesses here today (p.96). "The Ithaca
Wal-Mart will be one of the chain's largest area stores (p.," with 45% of
the floor area of competitive stores on the Commons. Their parking lot, 50%
larger than Wegmans, would be so large that shoppers would walk 560' (one
ninth of a mile) from the farthest parking spot to an entrance. To get an
idea how big this mall & lot area would be, walk around all four Commons
blocks (bounded by Aurora, Cayuga Seneca and Green).


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