Deal of the Day
opinion
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Walmart – by the numbers Published: June 23, 2010 By A. Fletcher Mangum, Ph.D. Earlier this year, my firm was asked by Walmart to conduct a professional analysis of the economic impact that a new Walmart store would have on Powhatan County. Our study employed a standard computer simulation model that is also routinely used by state agencies such as the Virginia Department of Planning and Budget, Virginia Economic Development Partnership, and Virginia Employment Commission. Three principal findings emerged from that study. First, the proposed Walmart would have a significant positive economic impact on Powhatan. Specifically, our analysis showed that, overall, the proposed new store would generate approximately $652,000 in annual county revenue, 367 new jobs, and $21.5 million in total economic activity. Second, compared to other counties in Virginia, Powhatan’s existing retail sector is only about half the size one would expect, based on the county’s population. That means that Powhatan residents must currently travel outside of the county to make a large proportion of their retail purchases and, importantly, that the county is losing significant sales tax revenues as a result. Third, Powhatan is experiencing rapid residential growth and that is putting stress on the county’s budget. Between 2000 and 2008, where Virginia’s population grew by 9 percent, Powhatan’s grew by 24 percent. Those sprouting rooftops drove a $21.3 million increase in the county’s annual education budget, and a $17.4 million increase in annual tax revenue from real property. The gap between those two figures – $3.9 million – is just one measure of the net fiscal strain that increased residential growth is placing on the county, and of the county’s need to expand its commercial tax base to compensate. Finally, it is also important to realize that Walmart is hardly new to Virginia. As a result, we don’t need to hypothesize about the economic effects, we can simply measure them. Accordingly, our study looked at sales tax revenue growth in six Virginia localities that are comparable to Powhatan and in which a new Walmart was constructed between 1991 and 2003. That analysis showed that, on average, those localities experienced a net 14.3 percent increase in sales tax revenue after the Walmart was constructed. Even closer to home, many of the same concerns that are being raised regarding the proposed Powhatan Walmart were also raised prior to the construction of the Ashland Walmart. Yet, looking back, an article that appeared in the Richmond Times Dispatch this past August concluded that, Six years after the Wal-Mart came to town, Ashland is still Ashland. There’s still a quaint downtown with railroad tracks running down the middle of the main street ... Mom-and-pop stores and local restaurants still flank the tracks of the historic district, offering locals, college kids and passers-by ample opportunity to soak in the small town charm. In short, the evidence suggests that the proposed Walmart store would make a positive and timely economic contribution to Powhatan County. —Dr. A. Fletcher Mangum is Managing Partner of Mangum Economic Consulting, a Richmond based firm. |
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Dr. Miguelito Loveless of Thw Wild Wild West
Jul. 7, 2010, 12:42 PM
Anyone who uses all caps, who ends sentences with exclamation marks, whose vocabulary includes crude expressions such as “WTF” and “bullcrap,” and who requires four separate postings in order to assemble his thoughts is probably a regular customer at Wal-Mart. The target market, so to speak. Brandon
Jul. 4, 2010, 04:10 AM
Lastly, anti-Walmart and anti-big business folks seem to forget that small businesses usually BUY the inventory for their own products and services from BIG BUSINESS suppliers! At least one of the suppliers will be big, I assure you. Brandon
Jul. 4, 2010, 04:07 AM
I’m so sick of liberals in small towns with the silly bias against big business, pretending like only small business can make them thrive. Why do you glorify it so? Small, big, it really doesn’t matter. As long as it’s all voluntary, and consumers want it, so what? Stop treating small business like some holy, sacred model for success. Besides, any productive, strong economy needs BOTH small and big business, not politicians or citizens who are biased towards one or the other. Without big business, for instance, we wouldn’t have most of the innovations we have today! No computer, no fridge, no indoor heating and cooling, and much more. You think small business could do it? OF COURSE NOT! Only big business can produce the economies of scale required to do all that R&D and mass-produce these inventions. Who’s ever heard of a small business manufacturing plant? It wouldn’t be small for long after it started up, that’s for sure. Brandon
Jul. 4, 2010, 04:01 AM
And even if Walmart caused all the devastation to small businesses in smaller communities that you anti-Walmart folks claim it does, SO WHAT? If they can’t compete with Walmart, and consumers want better-quality products in a convenient location like Walmart, rather than going to 5 or 6 different ma and pa stores for all their stuff, big deal. What evidence do YOU have that letting in Walmart “destroys the town’s character” and makes us all a bunch of super-materialist low-price-loving zombies? Brandon
Jul. 4, 2010, 03:58 AM
“Overall nature of our character”? WTF does that even MEAN?! What “character”? I don’t know what sounds dumber- the vagueness of that phrase or the fact that YOU are acting like you decide what a town’s “character” is all of a sudden. Towns DON’T HAVE characters! That’s collectivist liberal BULLCRAP. The character comes from the people that make up the town. Who cares if there’s a Wal-Mart there or not, Clueless? I say let them build. If it’ll expand the economy and provide more tax revenue, why not?? What alternatives do YOU propose? If you can’t propose a good alternative, quit bellyaching and get outta here. You anti-Walmart folks DEFY REASON! There’s no talking to you. bw
Jun. 25, 2010, 11:15 AM
Dr Loveless (Or Dr. Clueless) What a silly comparison of Walmart to a nuclear waste dump! Or maybe you could have used a battery reclycling plant using low paid, child labor. How does Walmart differ from Food Lion, Dollar General of some of the local low-end retailers? The “professional” consultant stated many of the arguments I have made for allowing Walmart. Many just seem as common sense. The issues I see are that the BOS holds Walmart to the same standards as any other county business. I keep hearing about running locals out of business but looking around there is very little competion locally. The only local applicance dealer recently retired. Radio Shark carries a few electronics but I suspect most go into Chesterfield to Best Buy, HH Gregg, Sears, etc. And what clothing retailers are here? Hardware store closed way before Walmart. I have to drive 15 miles for a box of nails. Recently a number of restaurants have closed but I don’t think the Walmart Subway or whatever would be their competition. I see the competition to be with Food Lion, another national retailer and the local Drug store and maybe limited with Tractor Supply. Possibly some others? The things I see clouding this issue is the reporting of a few hundred organized vocal anti-Walmart people versus the less organized pro-Walmart. Both vocal groups make up a very small percentage of the total Powhatan citizens. Hey Dr. Miguelito Loveless
Jun. 25, 2010, 09:15 AM
Does this nuclear waste dump you speak of have good paying jobs where I don’t have to drive 45 miles each way to make a living? I say we try to bring it in and put it next to the prisons off of Old River Trail. I hear there’s some land there not being used for anything. Dr. Miguelito Loveless of The Wild Wild West
Jun. 24, 2010, 11:10 PM
The mere fact that Wal-Mart might bring in some low-end retail busines does not mean that it would be wise for Powhatan to allow it. The overall character of our community must also be considered. We might get some additional business if the nuclear waste dump that was planned for Yucca Mountain, Nevada, was brought here too, but that does not mean that it would be a good idea to do it. BZ
Jun. 24, 2010, 08:16 PM
Writer/mdb: No Renumeration was mentioned. However, the author of the story DID have nice things to say about free people conducting voluntary transactions with each other peacefully, and the benefits thereof. Since he did not argue for the coercive hammer of the state to fall upon them, I can see why folks such as yourselves would be suspicious. Jun. 24, 2010, 03:20 PM
mdb & FreedomWriter: That this guy was asked by Wal-Mart to conduct this study does not invalidate the results. If you want to invalidate the results, you have to find fault with one of the following: * The methodology used to gather the data in the study A critique of the funding source is only valid *AFTER* you’ve found some flaw inside the study. At that point, and only at that point, can you claim that Wal-Mart bought the results that they wanted. If your only critique of a study is the funding source, you have to find a problem in t he methodology, the data or the logic used to derive the conclusions before you can claim the results are invalid. This study may very well be flawed. But knowing who funded it doesn’t demonstrate it. Submit Your Comments Below |