By ROD HAGENBUCH
In his Comment column “Think Inside the Big Box” (Aug. 27), Charles Crumpley asked: “Why does Los Angeles so despise big-box stores?” He answered his question by posing a few “straw man” responses that he then went on to refute: the traffic, the ugliness, and the low-paying jobs. He dismissed these arguments by suggesting that Los Angeles is already so blighted by traffic, ugliness, and low-paying jobs that big-box stores won’t have a demonstrable impact.
While many people do consider an increase in traffic, ugliness, and low-paying jobs to be very real and adverse consequences of big-box stores, and while Crumpley’s suggestion that the city is so bad off that big-box stores couldn’t make it any worse is rather callous and cynical, I won’t argue that traffic, ugliness and low-paying jobs are the primary reasons to oppose big-box stores. There are plenty of others even more compelling.
Crumpley neglected to include some very significant reasons why the spread of big-box stores should be abated. There are considerable long-term costs to our communities that should be fully appreciated before another big box is allowed to move into our city.
When a big-box store opens, dozens of small, locally owned stores go out of business. One only has to look at the devastation of small-town business districts across the country to understand how destructive big-box establishments can be. Whether it’s Wal-Mart or Staples or any of the mega-stores spreading across America, soon after they move into your community, many of your neighbors will see their businesses fail, undercut by lower wages, benefits and the lower prices that cheap, overseas labor makes possible.
People who have operated businesses, supported their neighborhoods, and sponsored their kid’s soccer team will become unemployed. These are people who worked hard, serviced their communities, and paid sales taxes to the city of Los Angeles. They believed in the “American dream” and raised their children on middle-class incomes. Many will be forced to take lower-paying jobs, sometimes two or three at once, making it increasingly difficult for them to raise children who will contribute to the welfare and success of our communities.
Professor Emek Basker at the University of Missouri found that when a Wal-Mart opens and creates hundreds of new retail jobs, within five years the net increase in sales jobs fades to about 50 as local retailers go out of business. These new jobs frequently have much lower wages and benefits, and include many more part-time positions.
The employment losses do not stop with retail jobs. None of the big-box stores use local insurance agents, accountants, architects, engineers, lawyers, decorators, or bankers. They don’t use local distributors, buy locally made merchandise, or use very many local services. They buy most of their merchandise directly from China or other offshore providers. When they open a new store, U.S. jobs move overseas. When Wal-Mart drove the quality and price of Master Locks and R.L. Sprinklers down, they were forced to move their manufacturing to China. The workers at these companies probably didn’t realize that by shopping at big-box stores, they would lose their jobs.
Location dispute
One of the current disputes is over the location of a new Home Depot hardware store in the Sunland-Tujunga area. If Home Depot opens, the community will pay a price. People in the area will pay less for a toaster, but the community will pay much more through a host of hidden costs that include the use of hospital emergency rooms for medical services that used to be covered by the health insurance people were provided or could afford before they lost their jobs.
Big-box stores do have lower prices for many products, which especially benefits lower-income residents. In addition, as Mayor Antonio Villaraigosa has argued, they also provide much-needed sales tax revenues to the city. Los Angeles residents, however, should be aware that the planning, development and shaping of our communities cannot be based on the illusion that more low-paying jobs or higher sales tax income will benefit our city. When other companies are put out of business by a big-box store, it is questionable whether there will be much of an increase in jobs or sales tax revenues anyway.
It is difficult to measure the full impact of big-box stores on our communities, but I suspect that wages, traffic and ugliness are just the beginning. When social scientists have had more time to study the effects of big-box stores, I imagine with the lower wages, less health care, we will recognize that higher crime rates, divorce rates, drug and alcohol addiction, school drop-out rates, medical problems, and a host of other social ills may follow in the path of these retail behemoths.
Why does Los Angeles so despise big-box stores? Because they diminish the character and quality of our communities.
Rod Hagenbuch is a retired Merrill Lynch executive and lives in Pacific Palisades.
