Big Boxing

Banning bargains.

Ted Balaker from the May 2004 issue

Do politicians stick up for the little guy or suck up to big corporations? In the nation's largest brawl over big-box retailers, California pols are anxious to prove they're in the little guy's corner.

Wal-Mart wants to open 40 supercenters in the Golden State, but many local officials worry that the retail giant's grocery prices are too low. They say that Wal-Mart will squash smaller businesses and that its non-union jobs will depress wages. From the Bay Area to Southern California, several cities have banned big-box retailers; others are pondering bans.

But a recent analysis by the Los Angeles County Economic Development Corporation suggests that competition actually helps the little guy. It reports that Wal-Mart would bring jobs to communities that need them, and that lower grocery prices would bolster buying power. Critics dismiss the study as self-interested -- Wal-Mart funded it -- but it's not the first to associate the superstore with economic benefits: A 2001 study by two economists at Marshall University found that Wal-Mart increased local employment rates and wages.

Of course, the world's largest retailer is only a part-time supporter of free markets. In Arvada, Colorado, local officials hungry for sales tax revenues want to confiscate and drain a privately owned lake and erect a Wal-Mart. The dispute between landowners and government officials has grown so heated that the state Supreme Court has agreed to hear the case. Instead of booting David or banning Goliath, perhaps politicians should just let everyone play fair?

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