Myths tend to grow larger the more frequently they are repeated. On January 2nd, CBS Marketwatch reported that “Wal-Mart, the Number 1 private sector job source, said it’s creating 75,000 new positions by adding 46 million square feet of new retail space in 2002.” But just one day before, Reuters news service had a story closer to the truth, about potential retail closures this year. Reuters wrote: “Wal-Mart has managed to snag market share from other retailers, grocery chains and drugstores in the shrinking U.S. economy.” Wal-Mart cannot be “snagging” market share from other retailers, and simultaneously be creating “new” jobs. When Montgomery Wards went belly up, or JC Penny’s, Bradlees, Caldors and Ames shut down hundreds of stores, it was a clear case of shifting market share, not job generation. New jobs in old aprons — that’s Wal-Mart’s specialty. Yet economic reporters like CBS Marketwatch, don’t seem to watch closely where the jobs are going. This is a typical example of fuzzy math, or what I have called elsewhere “sprawl math”. Wal-Mart snags jobs from other retailers, and gets praised by CBS for being a “job source”. It’s just voodoo economics, but local officials believe this stuff, reporters believe this stuff, and Wal-Mart repeats the myth in its press releases. The truth about Wal-Mart lies in my favorite company quote: “At Wal-Mart, we make dust, our competitors eat dust.” 75,000 jobs? Don’t count on it.
For more information about the myth of discount retail job creation, see the book “Slam Dunking Wal-Mart: How You Can Stop Superstore Sprawl in Your Hometown.” Or search this newsflash database using the words “jobs” or “Montgomery Ward” or “Caldor”.