Wal-Mart Stores Inc., the world's largest retailer, has a negligible economic influence on the small counties where it is located and doesn't destroy local businesses, according to research by the Federal Reserve Bank of Minneapolis.
The bank study of 40 counties in its district between 1986 and 2003 found the Bentonville, Ark., retailer slightly boosted business growth, employment and earnings compared with counties without a Wal-Mart, senior economist Terry Fitzgerald said in a paper released Tuesday.
The findings challenge the conventional view that Wal-Mart has a significant economic influence on local communities, Fitzgerald said. Almost 90 percent of the U.S. population lives within 15 miles of a Wal-Mart store, and about five in six Americans shopped there in 2005, he said.
"The biggest surprise is that Wal-Mart's economic influence is pretty small, given how rancorous the debate is," Fitzgerald said in a phone interview. "The success of local communities depends on other factors other than the presence or non-presence of Wal-Mart."
Personal income growth during the two decades was virtually identical in counties with or without Wal-Marts, Fitzgerald wrote. Earnings per job also grew faster from 1985 to 2005 in counties with a Wal-Mart store, he said.
"We cannot say that Wal-Mart is directly responsible for any particular outcome, positive or negative, in the counties investigated," the economist wrote. "Proving a causal relationship between Wal-Mart and local economic trends is rife with complications. Indeed, such complexity is one of the reasons controversy continues to swirl around the company."
Wal-Mart spokesman John Simley said he hadn't seen the study and couldn't immediately comment.
Wal-Mart has come under attack for depressing wages, ushering in sprawl and undercutting local businesses. "There is strong evidence that jobs created by Wal-Mart in metropolitan areas pay less and are less likely to offer benefits than those they replace," a study by the UC Berkeley Center for Labor Research and Education concluded last month.
In urban and suburban areas where Wal-Marts open, and where jobs tend to be higher-paid, "we found an impact that is quite significant," said Ken Jacobs, a University of California, Berkeley professor who co-au- thored the December study.
Eighty-three percent of retail jobs are found in urban and suburban areas, Jacobs said.
Another study also issued last month by his colleagues at the UC Berkeley Labor Center concluded that wages in states with 50 or more Wal-Marts were 10 percent lower and health coverage 5 percentage points lower than in areas without Wal-Marts."It's not a surprise that where you have the strongest opposition to Wal-Mart is in urban areas," Jacobs said.