اثرات وال-مارت بر بازارهای کار محلی

We estimate the effects of Wal-Mart stores on county-level retail employment and earnings, accounting for endogeneity of the location and timing of Wal-Mart openings that most likely biases the evidence against finding adverse effects of Wal-Mart stores. We address the endogeneity problem using a natural instrumental variables approach that arises from the geographic and time pattern of the opening of Wal-Mart stores, which slowly spread out from the first stores in Arkansas. The employment results indicate 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. The payroll results indicate that Wal-Mart store openings lead to declines in county-level retail earnings of about $1.4 million, or 1.5 percent. Of course, these effects occurred against a backdrop of rising retail employment, and only imply lower retail employment growth than would have occurred absent the effects of Wal-Mart.

Wal-Mart is more than just another large company. It is the largest corporation in the world, with total revenues of $285 billion in 2005. It employs over 1.2 million workers in the United States, at about 3600 stores.1 To put this in perspective, the Wal-Mart workforce represents just under 1 percent of total employment and just under 10 percent of retail employment in the United States. It exceeds the number of high school teachers or middle school teachers, and is just under the size of the elementary school teacher workforce. Wal-Mart is reported to be the nation’s largest grocer, with a 19 percent market share, and its third-largest pharmacy, with a 16 percent market share (Bianco and Zellner, 2003).During the past two decades, as Wal-Mart sharply expanded its number of stores in the United States, it increasingly encountered resistance from local communities. Opponents of Wal-Mart have tried to block its entry on many grounds, including the prevention of urban sprawl, preservation of historical culture, protection of the environment and “main-street” merchants, and avoidance of road congestion.2 Yet two of the most commonly-heard criticisms are that Wal-Mart eliminates more retail jobs than it creates for a community, and that it results in lower wages, especially in retail.3 Wal-Mart executives dispute these claims, especially with regard to employment. For example: its Vice President Bob McAdam has argued that there are many locations where Wal-Mart creates jobs in other businesses in addition to what Wal-Mart itself offers (PBS, 2004); the Wal-Mart web-site Walmartfacts.com trumpets the positive effects of Wal-Mart stores on retail jobs in the communities where stores open4; and an advertisement run in the USA Today, The Wall Street Journal, and The New York Times on January 14, 2005, displayed an open letter from Lee Scott,Wal-Mart President and CEO, stating “This year, we plan to create more than 100,000 new jobs in the United States.”5 Of course Wal-Mart offers other potential benefits in the form of lower prices for consumers (Basker, 2005a; Hausman and Leibtag, 2004). In this paper, we seek to provide a definitive answer regarding whether Wal-Mart creates or eliminates jobs in the retail sector, relative to what would have happened absent Wal-Mart’s entry. Also, because of concern over the effects ofWal-Mart on wages, and because policymakers may be interested in the impact of Wal- Mart on taxable payrolls, we also estimate the effects of Wal-Mart on earnings in the retail sector, reflecting the combination of influences on employment, wages, and hours. We believe that our evidence improves substantially on existing studies of these and related questions, most importantly by implementing an identification strategy that accounts for the endogeneity of store location and timing and how these may be correlated with future changes in earnings or employment. Indeed, it has been suggested that Wal-Mart’s explicit strategy was to locate in small towns where the population growth was increasing (Slater, 2003, p. 92) and it is reasonable to expect that Wal-Mart entered markets where projected retail growth was strong. If Wal-Mart tends to enter fast-growing areas in booming periods, then we might expect to observe employment and earnings rising in apparent response toWal-Mart’s entry, even if the stores actually have negative effects. Our identification strategy is driven by a systematic pattern in the openings of Wal-Mart stores. Sam Walton, the founder ofWal-Mart, opened the firstWal-Mart store in 1962 in Rogers, Arkansas, in Benton County. Five years later, Wal-Mart had 18 stores with $9 million of annual sales. Wal-Mart first grew into a local chain store in the northwest part of Arkansas. It then spread to adjacent states such as Oklahoma, Missouri, and Louisiana. From there, it kept expanding to the rest of the country after closer markets were largely saturated (Slater, 2003, pp. 28–29). The relationship betweenWal- Mart stores’ opening dates and their distance to the headquarters is primarily a result of Wal-Mart’s “saturation” strategy for growth, which was based on control of and distribution of stores, as well as word-ofmouth advertising. In his autobiography, Sam Walton describes the control and distribution motive as follows: “[Our growth strategy] was to saturate a market area by spreading out, then filling in. In the early growth years of discounting, a lot of national companies with distribution systems already in place—K-Mart, for example—were growing by sticking stores all over the country. Obviously, we couldn’t support anything like that. . . . We figured we had to build our stores so that our distribution centers, or warehouses, could take care of them, but also so those stores could be controlled. We wanted them within reach of our district managers, and of ourselves here in Bentonville, so we could get out there and look after them. Each store had to be within a day’s drive of a distribution center. So we would go as far as we could from a warehouse and put in a store. Then we would fill in the map of that territory, state by state, county seat by county seat, until we had saturated that market area. . . . So for the most part, we just started repeating what worked, stamping out stores cookie-cutter style” (Walton, 1992, pp. 110–111). One might wonder whether this need to be near a distribution center requires a steady spreading out from Arkansas. Why not, for example, open distribution centers further away, and build stores near them? The explanation seems to lie in the word-of-mouth advertising advantage perceived to result from the growth strategy Wal-Mart pursued: “This saturation strategy had all sorts of benefits beyond control and distribution. From the very beginning, we never believed in spending much money on advertising, and saturation helped us to save a fortune in that department. When you move like we did from town to town in these mostly rural areas, word of mouth gets your message out to customers pretty quickly without much advertising. When we had seventy-five stores in Arkansas, seventy-five in Missouri, eighty in Oklahoma, whatever, people knew who we were, and everybody except the merchants who weren’t discounting looked forward to our coming to their town. By doing it this way, we usually could get by with distributing just one advertising circular a month instead of running a whole lot of newspaper advertising” (Walton, 1992, p. 111).6 Wal-Mart’s practice of growing by “spreading out” geographically means that distance from Benton County, Arkansas, and time—and more specifically their interaction— help predict when and where stores opened.7 Thus, the key innovation in this paper is to instrument for the opening ofWal-Mart stores with interactions between time and the distance between Wal-Mart host counties and Benton County, Arkansas, where Wal- Mart headquarters are located and the first Wal-Mart store opened.

Motivated in large part by local policy debates over Wal-Mart store openings, and the large size of Wal- Mart relative to the retail sector, we estimate the effects of Wal-Mart stores on retail employment and earnings. Critics have charged thatWal-Mart’s entry into local labor markets reduces employment and wages, and the company (and others) have countered that these claims are false, and touted Wal-Mart’s retail job creation effects. Our analysis emphasizes the importance of accounting for the endogeneity of the location and timing of Wal-Mart openings that—in our view, and as borne out by the data—is most likely to bias the evidence against finding adverse effects of Wal-Mart stores. Our strategy for addressing the endogeneity problem is based on a natural instrumental variables approach that arises because of the geographic and time pattern of the opening of Wal-Mart stores, which slowly spread out in a wavelike fashion from the first stores in Arkansas. The findings in this paper rather strongly belie claims, as well as recent research findings, suggesting that Wal-Mart store openings lead to increased retail employment. On average, Wal-Mart store openings reduce retail employment by about 2.7 percent, implying that each Wal-Mart employee replaces about 1.4 employees in the rest of the retail sector. Driven in part by the employment declines, retail earnings at the county level also decline as a result ofWal-Mart entry, by about 1.5 percent. It is harder to draw any firm conclusions regarding the effects of Wal-Mart on wages, although the data do not provide any indication that retail earnings per worker are affected by Wal-Mart openings. Note that the estimated adverse effects on retail employment do not imply that the growth of Wal-Mart has resulted in lower absolute levels of retail employment. 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). 48 If each of the 3066 stores present in January of 2005 reduced retail employment by our estimate of 146 workers (Table 4, column (4)) relative to the counterfactual, 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 thatWal-Mart entered, and hence that Wal-Mart has negative rather than positive effects on net job creation in the retail sector. The lower retail employment associated with Wal- Mart does not necessarily imply that Wal-Mart stores worsen the economic fortunes of residents of the markets that these stores enter. Our results apply only to the retail sector, and we suspect that there are not aggregate employment effects, at least in the longer run, as labor shifts to other uses. Wage effects are more plausible, although these may operate more on the manufacturing side through the buying power that Wal-Mart exerts, as opposed to the retail side which is a low-wage sector regardless of Wal-Mart—although there are exceptions such as relatively highly-paid grocery workers who may be harmed from competition with Supercenters. If there are wage (or employment) effects that arise through cost pressures onWal-Mart’s suppliers, however, they would not necessarily be concentrated in the counties in which stores open, so that our methods would not identify them. Moreover, Wal-Mart entry may also result in lower prices that increase purchasing power, and if prices are lowered not just at Wal-Mart but elsewhere as well, the gains to consumers may be widespread. Furthermore, the gains may be larger for lower-income families (Hausman and Leibtag, 2005), although it is also possible that labor market consequences for these families are also more adverse. Another line of criticism of Wal-Mart is that through lowering wages it increases the burden on taxpayers by increasing eligibility for and receipt of government benefits. 49 However, a key implicit assumption is that in the absence of Wal-Mart, employees of the company would have higher-paying jobs, rather than, for example, no jobs. Thus, the validity of this criticism hinges on whether Wal-Mart’s entry into a labor market affects overall employment and wages. It is also worth pointing out that if Wal-Mart causes both earnings and price declines for low-income families, then taxpayer burden could increase even if the price declines more than offset the earnings declines for these families, because government programs are typically tied to earnings. Thus, aside from the question of employment effects, there are numerous remaining questions of considerable interest regarding the effects of Wal-Mart on labor markets and goods markets, on consumption, and on social program participation and expense. In addition, of course, there are non-economic issues that play a role in the debate over Wal-Mart, such as preferences for downtown shopping districts versus suburban malls. The identification strategy developed in this paper may prove helpful in estimating the effects of Wal- Mart stores on some of these other outcomes as well.