Mark Perry on the Cato Institute study “Has Wal-Mart Buried Mom and Pop?” [PDF]
Myth: Mega discount store Wal-Mart is a plague set upon small “mom-and-pop” businesses. The instant Wal-Mart moves into town, all small businesses are destroyed in its path, leaving downtowns barren and empty. According to Robert Reich, Wal-Mart turns “main streets into ghost towns by sucking business away from small retailers.”
Reality: The popular belief that Wal-Mart has a significant negative effect on the size of the mom-and-pop business sector of the United States economy is statistically unfounded. After examining a plethora of different measures of small business activity and growth, examining both time series and cross-section data, and employing different geographic levels of data and different econometric techniques, it can be firmly concluded that Wal-Mart has had no significant impact on the overall size and growth of U.S. small business activity.
Source: Cato Institute study “Has Wal-Mart Buried Mom and Pop?”
MP: In the chart above, the slope of the regression line is actually positive and significantly different from zero, which suggests that states with more Wal-Mart stores actually have significantly higher levels of five-to-nine-employee establishments.
Ah yes, the Cato institute, the bastion of honest research and policy proposals.
Give me a break. What would you expect this free market radical to find? That sometimes the free market hurts small business? When hell freezes over.
Maybe if Mr. Perry got out to real America he would see the devastation. He can throw charts and fancy numbers out there, but go to a small midwest town and the BS charts mean nothing compared to what the store has actually done to local economy.