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July 2, 2013 7:27 AM   Subscribe

This month, citizens and planning officials in Cape Cod, Mass., will get a chance to do what almost no one else in the U.S. is allowed to do when deciding whether to approve or reject a big-box retail development: weigh the likely impacts on the region’s economy.

via the Institute for Local Self-Reliance (previously, previouslier)
posted by Potomac Avenue (108 comments total) 16 users marked this as a favorite

 
Interesting. From the Cape Cod, Mass. link:
Dennis Town Planner Daniel Fortier said the town has no ability to turn down the project because local zoning allows it, but conditions may be attached as part of the planning board’s site plan review.

But because Lowe’s will affect the region, it must pass muster with the Cape Cod Commission prior to being considered by the town. The agency will decide whether the project’s benefits to the region outweigh its detriments, and the commission has the ability to completely derail the proposal by issuing a denial.
But from the weigh the likely impacts on the region's economy link:
Mindful of the Cape’s fragile environment and economy (despite pockets of wealth, the peninsula’s per capita income is well below the state average), residents voted to create the Cape Cod Commission in 1990. Made up of representatives of each of the Cape’s 15 towns, this regional planning body has the authority to review, and reject, large development projects that could significantly impact the local economy or environment, including any commercial building over 10,000 square feet. The commission does not supplant municipal planning boards, but rather adds a second layer of review for large projects, in which all of the region’s towns are given a say.
For those not involved in city and regional planning, what Daniel Fortier said is generally the case. Land use regulations ensure that a development won't impact traffic flows, utilities and water, and in some cases, broader environmental, cultural, visual and social impacts, but economic impacts are generally hands-off.

Having a preliminary "filter" for broader issues is a good idea, especially when you have a number of small but intertwined communities. It's exciting (for this planning geek) to see more collaborative planning efforts.
posted by filthy light thief at 7:39 AM on July 2, 2013 [5 favorites]


Amazing that regional policy plans and economic oversight are such rare things. Good for the Cape Cod Commission for actually quantifying how awful large chain retailers are for the local economy and for workers.

Related: Every new Wal-Mart that opens costs taxpayers between $900,000 and $1.75 million a year in food stamp benefits for woefully underpaid workers
posted by Mayor West at 7:40 AM on July 2, 2013 [18 favorites]


The Washington, D.C. Council’s preliminary decision to require the city’s largest retailers to pay a “living wage” has put Wal-Mart’s plans for the District in doubt
posted by exogenous at 7:45 AM on July 2, 2013 [2 favorites]


On Cape Cod, not in.
posted by vrakatar at 7:51 AM on July 2, 2013 [6 favorites]


Ha dammit you're right. Even the syntax is well-regulated!
posted by Potomac Avenue at 7:53 AM on July 2, 2013


Hmm. I used to live just down the street from the proposed location, and my family still owns that house. We were there for a couple of days last week, and I saw a lot of No To Lowe's signs. The traffic impacts alone would be disastrous, but there is a locally-owned hardware store just down 134 and a locally-owned feed-and-seed type place about a mile up the road. I really hope they are able to block this application. Not just from a NIMBY perspective, but for the sake of the Cape economy.
posted by Rock Steady at 7:54 AM on July 2, 2013 [2 favorites]


And in North Dakota, the council of the small city of Minot did not have enough votes to allow WalHell to build a new location. That North Hill area is quite under-developed but it appears that there was enough sense to keep the worst big box out of mix.

Rumors abound that Costco has acquired land in both Minot and Bismarck. Now there's a big box I could welcome with open arms.
posted by Ber at 7:59 AM on July 2, 2013


Make it a requirement that when the store eventually goes belly up Lowes is on the hook for the cost of demolition. The Borders bankruptcy should be learned from.
posted by ishrinkmajeans at 8:06 AM on July 2, 2013 [11 favorites]


Building supplies are a somewhat different economic good than books, to play devil's advocate. A lot of working-class people do their own work or work as small contractors, both interests that would benefit from the lower prices for their second most crucial input after labor.

I'm not arguing for or against, but there are ways a building supply retailer that brings economies of scale and competition to a formerly local market (a market that is not going away like books, but that gets critically important in a period of infrastructural improvement for new energy models or climate change defense) benefits working-class communities.

So do quaint towns and beaches that attract tourists obviously. I presume planning would model such variables carefully, of course.
posted by spitbull at 8:21 AM on July 2, 2013 [2 favorites]


Whenever someone complains about too much regulation being bad for business, I think about Cape Cod.
posted by Potomac Avenue at 8:22 AM on July 2, 2013 [1 favorite]


And by the way this is even more true where there is sharp income inequality such that working class people are harmed by higher prices pegged to tourist and wealthy consumers. Cape Cod has a lower than average median income, but also pockets of wealth and poverty cheek by jowl. Fine for the doctor to spend more for locally owned small businesses to thrive when she needs stuff on her vacation home. Not so fine for the Salvadoran immigrant landscaper who works on her yard. (Although the immigrant landscaper can of course pass those costs along to wealthy customers.)
posted by spitbull at 8:24 AM on July 2, 2013 [1 favorite]


On the whole prices are pretty low on the Cape though, especially since there's a long off-season where everything's on sale all the time. There's definitely inequality of various kinds of course, but I don't think a Lowes is going to help rather than hurt, especially if the same local workers would be making less there than at a mom and pop store.
posted by Potomac Avenue at 8:29 AM on July 2, 2013 [1 favorite]


I guess? I mean the first Internet supplier that allows shipment of 2x4s and hammers overnight to location at about cost is going to eat Lowes lunch. They just need a robot run warehouse and minimal staffing and an Internet address. Consumers won't have to pay for the overhead of megastores. And it will be a boon to the lower classes as items will be cheaper and can be ordered from either a smart phone or the free Internet in the local library.
posted by ishrinkmajeans at 8:30 AM on July 2, 2013


I really hope the Lowe's doesn't go in there. It's not just MidCape that's going to get hit. The location is actually very close to a small pocket of industrial type businesses (electric supply house, landscaping stuff, etc) that will be impacted.

They just need a robot run warehouse
So far our fabulous future only brings us "keep working I don't care if you have heatstroke" warehouses.
posted by rmd1023 at 8:32 AM on July 2, 2013 [3 favorites]


The Cape consists of older people who bought homes there and have retired people who own homes there and commute to places for work. Home owners who rent to summer folks. Bed and Breakfast places. Those who own homes as vacation places (2nd homes). Some years ago, most of the Cape fairly deserted in the winter but now, like so many other places, year round occupancy.
Thus different "constituencies" have different needs. The one thing shared by all: the water level bad and drainage etc an issue.
posted by Postroad at 8:34 AM on July 2, 2013


Kiva Robot Warehouse
posted by ishrinkmajeans at 8:36 AM on July 2, 2013 [2 favorites]


cool! i, for one, welcome our pick-and-sort robot overlords.
posted by rmd1023 at 8:37 AM on July 2, 2013 [2 favorites]


Where a factory used to employ twenty guys now it might employ a robot programmer and a robot fixer. The rest of the wage wealth goes to the guy who owns the robots. Pretty awesome until they can get a robot to do your job.
posted by ishrinkmajeans at 8:44 AM on July 2, 2013 [2 favorites]


I think there's a line to be walked between embracing labor saving (or labor diverting/deferring) technological improvements and eschewing fruits of the industrial revolution such as assembly lines.
posted by rmd1023 at 8:48 AM on July 2, 2013 [1 favorite]


Their analysis found that Lowes would bring 115 jobs, but local businesses would probably have to lay off about 160 people who mostly make more money than Lowes employees.

This isn't good for local consumers, who are also employees, or any other
unrelated local businesses. And this is why they need these kind of analyses to really evaluate the effect of box stores.

I'm not anti-big store. I would totally support a development that would increase jobs. But supporting a development that will decrease local employment is just really bad policy.
posted by jb at 8:50 AM on July 2, 2013 [5 favorites]


The analysis seems a bit strange though. The 25% pay premium for the smaller store employees has to come from the local consumers anyway so in a sense they end up poorer via reduced purchasing power. The difference I can see them really making the case for is that the profits of the big chains extract the profit from the local economy and give it to investors distributed all over the place but that isn't the case they make.
posted by srboisvert at 8:57 AM on July 2, 2013 [6 favorites]


but there are ways a building supply retailer that brings economies of scale and competition to a formerly local market (a market that is not going away like books, but that gets critically important in a period of infrastructural improvement for new energy models or climate change defense) benefits working-class communities.

Heh. This isn't limited to building supplies.

As usual, arguments against big box retailers tend to be bullshitty from an economic point of view. But red meat to left leaning NIMBYs. Places like Cape Cod have significant gravitas to bargain on quaintness, a privilege most regions lack. This quality simultaneously keeps the locale charming, and employment scarce and correspondingly compensated. But not every place with big box resisters might want to welcome the economic impact argument with open arms, because there are plenty places with neither natural charms to bargain with, nor a robust economy to hobble. As usual, exclusive land use restrictions are most viable in fairly exclusive places.
posted by 2N2222 at 8:59 AM on July 2, 2013 [3 favorites]


Amazing that regional policy plans and economic oversight are such rare things.

This isn't based on research, but my notion of how things go: I think that planning has been more focused on physical aspects of development, and less on the "soft" impacts. Heck, only 16 states, New York City, Puerto Rico, and the District of Columbia have enacted procedural laws similar to the National Environmental Policy Act, so broader environmental review isn't done all that often. So coming from the notion of "meet the building codes and you're good to go," it's a stretch to get to "we're going to evaluate your potential impact to the economics of the community."
posted by filthy light thief at 9:04 AM on July 2, 2013


Forgive me if I'm missing something, but does the "analysis" done for Local Business for a Strong Cape Economy really not include the benefits of lower prices to consumers?

Because while I'm willing to believe that a real cost-benefit analysis could show that a given big-box development is a bad deal, lower costs to consumers seems like a pretty big benefit to leave out.
posted by downing street memo at 9:11 AM on July 2, 2013 [2 favorites]


If the same consumers are now earning less as a result of the box store coming into town, those lower prices really don't mean as much now do they? Besides, in my experience the big box savings are often grossly exaggerated.
posted by saulgoodman at 9:15 AM on July 2, 2013 [6 favorites]


If the same consumers are now earning less as a result of the box store coming into town, those lower prices really don't mean as much now do they?

Sure, that's possible, but to not even include lower prices in the analysis reeks of BS (which, of course, as a report prepared for a cartel of local businesses, it is)
posted by downing street memo at 9:18 AM on July 2, 2013


There are a lot more consumers than people with potentially lost jobs.
posted by ghharr at 9:19 AM on July 2, 2013 [2 favorites]


I should add that this area is exactly where the Town and the Cape should be focusing development in Dennis. It has convenient access from Rt 6, is relatively distant from historic districts and beaches, and the adjacent dump and commercial development have already damaged whatever natural resources the immediate area may have had. That said, on the micro level, putting Lowe's on that street is a huge mistake and will really exacerbate already existing traffic problems. This is an area where there was a Dunkin Donuts in the strip mall on one side of the street, and the same franchisee opened another location in the strip mall directly across the street from their existing location because in the summer you are not going to turn left and cross the street to get a coffee.

I'm sure those lower prices will stay low once their competitors have been driven out of business.
posted by Rock Steady at 9:20 AM on July 2, 2013 [1 favorite]


Ah. I see. Well, maybe you could also explain to to me how it's supposed to benefit the local economy anywhere to have nearly all the profits from the retail business in that market extracted from the local area and pooled elsewhere? Is the idea that it will trickle back down to that market, or what?
posted by saulgoodman at 9:20 AM on July 2, 2013 [1 favorite]


Well yeah, it's an advocacy document not a scientific study, they're not bound to make their opponents argument for them.

It is an interesting question though Downing St. Anecdotally I don't believe it would lower overall prices on most items but I'd love to see research on that in other places.
posted by Potomac Avenue at 9:21 AM on July 2, 2013


ghharr: There are a lot more consumers than people with potentially lost jobs.

Yeah, but decent-paying lower class jobs are so hard to find on the Cape, I think that should be the priority.
posted by Rock Steady at 9:23 AM on July 2, 2013 [1 favorite]


Also, in fact, studies like this one (warning: annoying PDF popup download alert thingy) have shown that big box retailers exert a generally downward wage pressure on all the retail jobs in the markets in which they're built, not just the ones they replace or kill.
posted by saulgoodman at 9:26 AM on July 2, 2013 [6 favorites]


There are a lot more consumers than people with potentially lost jobs.

...So there are a lot more consumers making less after Wal-Mart comes to town than just those who lost their jobs.
posted by saulgoodman at 9:27 AM on July 2, 2013 [3 favorites]


Every new Wal-Mart that opens costs taxpayers between $900,000 and $1.75 million a year in food stamp benefits for woefully underpaid workers
"Democratic staff of the U.S. House Committee on Education and the Workforce estimates that a single 300-person Wal-Mart Supercenter store in Wisconsin likely costs taxpayers at least $904,542 per year and could cost taxpayers up to $1,744,590 per year – about $5,815 per employee"
That's a lot more specific than what you're quoting. It's certain an aspect worth considering, but useful aspects can get washed away by a tide of bile. And for a document with 65 footnotes in 16 pages, it's disappointing the report is question isn't one of them.
posted by yerfatma at 9:27 AM on July 2, 2013


Ah. I see. Well, maybe you could also explain to to me how it's supposed to benefit the local economy anywhere to have nearly all the profits from the retail business in that market extracted from the local area and pooled elsewhere? Is the idea that it will trickle back down to that market, or what?

I mean, I have no idea, and frankly neither do you. The idea is to write down all the costs and all the benefits and see which number is higher. And since there's really no way to do that in any seriously empirical way, documents like these are pieces of advocacy for various sides and amount to an exercise in justifying whatever the group in question wanted in the first place.

We've heard from rich Cape NIMBYs and local business owners who use the planning process to ensure their continued monopoly rents. We've heard from the giant retail conglomerate. I'm interested in hearing what lower and middle-class Cape Codders think.
posted by downing street memo at 9:28 AM on July 2, 2013


So there are a lot more consumers making less after Wal-Mart comes to town than just those who lost their jobs

How so? Are you suggesting a box store has a net negative effect on everyone's income? Capitalism really is broken! I'm more than happy to hear reasons why consolidation and lower prices aren't a good long-term ideas, but it requires something a little more substantive than rhetoric.
posted by yerfatma at 9:29 AM on July 2, 2013


This paper from the ILSR site linked above states that the overall price decreases claimed by WalMart are off-set by other community costs and are highly suspect.

Basically it lowers costs for lazy middle class folks who won't shop at Building 19 but will drive a few extra miles to go to Wal Mart but when the budget stores go out of business in the poor neighborhoods the lower income folks suffer. Then Wal Mart stops having the same kind of insane low prices as when it opened, and the money funnels out of the community to the Waltons. Yum Yum.
posted by Potomac Avenue at 9:30 AM on July 2, 2013 [1 favorite]


There are already plenty of big-box stores in Hyannis.
posted by brujita at 9:31 AM on July 2, 2013 [1 favorite]


Rich Cape NIMBYs

Where are you seeing this indication that the Cape Cod Commission or anyone else is a rich person? Maybe you should read the article?
posted by Potomac Avenue at 9:32 AM on July 2, 2013 [3 favorites]


I just don't see how it's logically possible to extract all the profits that would otherwise be circulating in that market without it having a net negative economic impact on that local economy, and I've always wondered if anyone had ever even bothered to come up with a half-way plausible explanation for how that's supposed to work. I guess your answer is no. (Sorry. That was in response to downing street memo's comment.)
posted by saulgoodman at 9:32 AM on July 2, 2013 [1 favorite]


How so? Are you suggesting a box store has a net negative effect on everyone's income?
Read the study I linked. It's not the only one to reach the same conclusion.
posted by saulgoodman at 9:34 AM on July 2, 2013 [2 favorites]


I'm not a particular fan of Wal-Mart or big box stores one way or another but I feel like opposing them because the ignorant (on preview "lazy middle class") masses will shop there and ruin local businesses is kind of paternalistic. If they build a Wal Mart and the locals prefer to stick to the local stores anyway, great. If people go to Wal-Mart instead they probably have a good reason.
posted by ghharr at 9:34 AM on July 2, 2013 [1 favorite]


I'm actually a little torn on this one. There are some goods that are difficult/expensive to get on the Cape. I've never had to purchase building supplies there, but I do distinctly remember that food costs are abnormally high, and that there were certain things that were difficult to find anywhere.

Losing a few retail jobs might be an acceptable tradeoff for having cheaper consumer goods throughout the region (while also increasing local tax revenue and reducing the number people and trucks moving goods on/off the cape). Big box retail is nothing if not efficient, and I'm not sure that we're going to build a better society by preserving unnecessary retail jobs -- it just seems like an exceptionally poor allocation of human capital.

The arguments against Wal-Mart in DC and Lowes on the Cape seem to evoke the worst kind of nosy-neighbor local politics, amplified by hopelessly-muddled opinions about free-market capitalism. DC's case is particularly maddening because the law is effectively a writ of attainder against Wal-Mart, and specifically exempts a number of existing local retailers that actually have significantly worse labor practices than Wal-Mart. By doing this, the council is also unintentionally entrenching DC's (mostly undeserved) reputation as being a bad place to open a business.

If you don't like the economic effects of big-box retail, you should probably pass laws to mitigate those effects. Raise the minimum wage, and require big businesses to provide health care to their employees. If Wal-Mart's wages are so terrible that they end up placing a huge burden on the safety net, there is a bloody obvious solution to that problem. Just be prepared to get a lot of pushback from local businesses who have even shittier labor practices.

We're quickly marching toward the point where it's unnecessary for American workers to be spending 40 hours a week on the job; there's too much labor and not enough work. We need to start addressing the bigger underlying problems, rather than quibbling about where Wal-Mart should be allowed to set up shop.

Oh, and I don't quite have such a rosy view of the cute bookstores on the Cape. Yes, the cape has a huge selection of charming tiny bookstores, which are great unless you happen to have reading tastes that aren't commonly held by anybody under 60 or over 12. I remember spending about a day visiting a dozen bookstores, looking for a copy of Anathem, before I finally gave up and ordered it from Amazon Prime. It's almost like the shops were set up with primary the goal of being cute, and the secondary goal of actually selling books.
posted by schmod at 9:35 AM on July 2, 2013 [3 favorites]


Is it paternalistic to oppose them because the data says they tank the local retail economy and cost the state government a lot of money in welfare outlays?
posted by saulgoodman at 9:35 AM on July 2, 2013 [4 favorites]


Is it paternalistic to oppose them because the data says they tank the local retail economy and cost the state government a lot of money in welfare outlays?

You can be both paternalistic and right.
posted by ghharr at 9:38 AM on July 2, 2013


opposing them because the ignorant masses will shop there and ruin local businesses is kind of paternalistic

Opposing them because they suck wealth out of the local economy and take it somewhere else makes a lot of sense and doesn't seem at all paternalistic.
posted by straight at 9:39 AM on July 2, 2013 [2 favorites]


I just don't see how it's logically possible to extract all the profits that would otherwise be circulating in that market without it having a net negative economic impact on that local economy, and I've always wondered if anyone had ever even bothered to come up with a half-way plausible explanation for how that's supposed to work.

Well, this isn't a hard question at all, really. If the larger, and presumably more efficient, competitor can lower prices enough, they can offset the loss of local profits. It's not like Lowes has insanely high profit margins to begin with. As Downing St. Memo rightly points out, the cost/benefit analysis depends hugely on the benefits to consumers.
posted by dsfan at 9:42 AM on July 2, 2013


downing street memo: I'm interested in hearing what lower and middle-class Cape Codders think.

You've heard from me. I lived literally in that neighborhood for 5 years, and I bought a lot of building supplies because I was helping to fix up my parents' home, which my wife and daughter and I lived in because we couldn't afford to live on the Cape otherwise with our ~$50,000/year combined salary.
posted by Rock Steady at 9:42 AM on July 2, 2013 [2 favorites]


Yeah, I wouldn't classify the mid-Cape area as either rich or left-leaning. Average per-capital income is much lower than the rest of the state, but cost of living isn't that much lower. And I'm pretty sure it's the only part of the state that carried Gomez in the recent special election.

It's also not a part of the Cape particularly banking on "quaintness" - the site for the Lowe's was previously mostly known for a giant inflatable attractions park (slides, bouncy-houses, etc) and a big flea market. And it's conveniently close to the dump.
posted by rmd1023 at 9:42 AM on July 2, 2013 [1 favorite]


I just don't see how it's logically possible to extract all the profits that would otherwise be circulating in that market without it having a net negative economic impact on that local economy

I mean, if the profits come at the expense of consumers - if Joe Hardware's profits, in other words, are the results of consumers being forced to pay higher prices for the goods he sells - it's entirely possible for the "profits to be extracted" (whatever that means, exactly) from the local market while increasing consumer welfare on the whole.

Consider a reductio - a mining town with a company store. They charge obscenely high prices, but profits are "kept local" and not "extracted". But somehow WalMart opens up down the road and puts the company store out of business. Some profits are "extracted" to the Waltons in Bentonville, but that's more than made up for by the increased consumer welfare of all the mining families.
posted by downing street memo at 9:43 AM on July 2, 2013 [4 favorites]


So instead of dealing with the article's list of actual impact to the economy and the various resources we've linked you're making the same old ad hominem declarations about NIMBYs and REGULATION BAD arguments based on hypothetical scenarios that always come up when big box stores are discussed online? Cool, thanks.
posted by Potomac Avenue at 9:48 AM on July 2, 2013 [2 favorites]


You can be both paternalistic and right.

If I held some position of authority, you could fairly accuse me of paternalism for suggesting something might be a bad idea. But I'm just an ordinary guy, so if you're not one of my two kids, I'd say any accusations of paternalism against me are misguided.

it's entirely possible for the "profits to be extracted" (whatever that means, exactly)

What it means to me is that those profits (actual dollars) are literally not circulating in the local economy anymore, they are being pooled and repaid to investors that live somewhere else who will probably spend those dollars somewhere else, if at all. If the word "extract" is too loaded for you, how about "removed from circulation"?
posted by saulgoodman at 9:53 AM on July 2, 2013 [1 favorite]


So instead of dealing with the article's list of actual impact to the economy

The article's list is advocacy-driven nonsense and wildly incomplete. So, yeah, in a discussion of that article, it feels like a pretty germane topic.

ad hominem declarations about NIMBYs and REGULATION BAD arguments based on hypothetical scenarios that always come up when big box stores are discussed online?

Wait, who got ad hommed in this thread? Also, when did I say that regulation was bad? I actually totally agree that a given big-box development could be bad for a local economy. But, given the absurd "analysis" that's the basis of the article and FPP, I don't see how anyone could make that determination in this case.

A reductio is a common thought experiment designed to stimulate clear thinking. Implied in the name, reductio ad absurdum, is that the scenario itself is unfeasible or not rooted in the actual argument. The entire point was to illustrate that it's indeed possible for a non-local "big box" development can, in certain circumstances, increase result in net increases in consumer welfare in a local market.
posted by downing street memo at 9:53 AM on July 2, 2013 [1 favorite]


And presenting a fictional example of a grossly exploitative economic arrangement that would likely be illegal anyway as the only alternative to big box retail doesn't exactly seem like good faith argument to me... Wal-Mart is not what killed the company store. In fact, I'd bet they'd be more than willing to pay in company scrip if they could.
posted by saulgoodman at 9:54 AM on July 2, 2013 [2 favorites]


saulgoodman: I'd bet they'd be more than willing to pay in company scrip if they could.

Related.
posted by Rock Steady at 9:57 AM on July 2, 2013 [3 favorites]


If they build a Wal Mart and the locals prefer to stick to the local stores anyway, great.

Not when Walmart practices predatory pricing to drive competitors out of business, then raises prices.

This is a thing Walmart is known to do. drop prices below cost, then wait until the other companies can't compete and close.
posted by winna at 10:00 AM on July 2, 2013 [6 favorites]


Downing this was a cheap shot I was referring to: "We've heard from rich Cape NIMBYs..." I still don't know what you were referring to there, but plenty of folks after that felt comfortable accusing those involved in blocking the Lowes of paternalism and lack of knowledge about sweet sweet capitalism. Your criticism about the lack of consideration of low prices for consumers is totally fair though, and I wish you'd back that up with some evidence that box stores bring economic fairness to low income communities, I haven't ever seen articles about that and I'd be curious to read their conclusions.

I guess my understanding is that consumers wouldn't need extra-low prices if the local economy is robust enough to support higher paying jobs.

"If you don't like the economic effects of big-box retail, you should probably pass laws to mitigate those effects."

Cape Cod did create such very unusual laws, and the result is a relatively healthy locally-managed economy. Partially that is due to tourist dollars but ask Ocean City MD or other decaying beach communities how their lack of regulation of box stores is working out in terms of tourist viability.
posted by Potomac Avenue at 10:00 AM on July 2, 2013 [1 favorite]


If the larger, and presumably more efficient, competitor can lower prices enough, they can offset the loss of local profits.

But studies that look at the actual economic impact don't find this. They find that the local economies suffer.

Besides, profits are not costs. Wal-Mart's not just increasing profit margins for the retail business in the area and returning all the profits that used to be in the local retail economy back to the community in the form of higher wages and keeping the remainder. They're taking all the profits out of these local economies--whatever profits they gain through improved efficiency and whatever profits were there to be had in the retail market to start with.
posted by saulgoodman at 10:02 AM on July 2, 2013 [2 favorites]



If I held some position of authority, you could fairly accuse me of paternalism for suggesting something might be a bad idea. But I'm just an ordinary guy, so if you're not one of my two kids, I'd say any accusations of paternalism against me are misguided.


I'm not accusing you in particular of anything, what I'm suggesting is that opposition to Lowes asserts that it is bad (economically) for the region as a whole because it will cannibalize sales from locally owned stores. And that may be true, but people aren't forced to go to Lowes, they do because they think it benefits them in some way. So the opposition is premised on the idea that consumers need to be protected from themselves, which rubs me the wrong way, even if it may be economically correct.
posted by ghharr at 10:07 AM on July 2, 2013


But I'm not doing that. I'm trying to convince consumers to protect themselves. There's nothing paternalistic about opposing something and trying to persuade others to oppose it. If there were, trying to persuade people Wal-Mart is super awesome would be paternalistic for exactly the same reasons.
posted by saulgoodman at 10:14 AM on July 2, 2013 [1 favorite]


the opposition is premised on the idea that consumers need to be protected from themselves

Why would you think "consumers" are the only stakeholders here? It's legitimate for governments to protect their local businesses and local economies from predatory outsiders.
posted by straight at 10:16 AM on July 2, 2013 [4 favorites]


But I'm not doing that. I'm trying to convince consumers to protect themselves. There's nothing paternalistic about opposing something and trying to persuade others to oppose it. If there were, trying to persuade people Wal-Mart is super awesome would be paternalistic for exactly the same reasons.

The difference, to me, is that convincing consumers to protect themselves would be arguing that they should not choose to shop at Lowes. I believe what you are arguing is that Lowes should not be allowed to be constructed, which is different in that it doesn't allow individuals to make that choice.

Why would you think "consumers" are the only stakeholders here? It's legitimate for governments to protect their local businesses and local economies from predatory outsiders.

They are certainly not the only stakeholders but by far the largest group (they are everyone, in fact) and they deserve to not be treated like sheep.
posted by ghharr at 10:25 AM on July 2, 2013


What it means to me is that those profits (actual dollars) are literally not circulating in the local economy anymore

How is this logic any more rigorous than trickle-down economics? Mom & Pop Hardware could be taking 100% of their profits to Vegas every year and blowing them on blackjack and hookers. Hopefully free-trade, artisan hookers, but the money's still out of the local economy.

"We've heard from rich Cape NIMBYs..." I still don't know what you were referring to there

I took it as a reference to the summer home owners who've been fighting wind power on the basis the benefits don't outweigh the effect on their view. Not necessarily applicable or correct, just how I read it.
posted by yerfatma at 10:26 AM on July 2, 2013


Yeah, I have family on the Cape who are indeed rich NIMBYs and were involved in the windmill thing and countless other privileged nonsense anti-development stuff, at least according to Facebook. They live in Hyannis/Yarmouth, though. So entirely possible that I misrepresented one group complaining about this stuff.

The broader point, however, remains. I don't understand why MeFites give so much credit to terrible, blatantly self-interested arguments by business owners used to having an entire market to themselves.
posted by downing street memo at 10:32 AM on July 2, 2013


I believe what you are arguing is that Lowes should not be allowed to be constructed, which is different in that it doesn't allow individuals to make that choice.

I'm arguing that people in the community also have a right to have a say in how their local resources are used, yes, and that as citizens of a community, they have a right to exercise their political power to oppose developments that don't serve the interests of their communities. Consumers are also political citizens with a role to play in the governance of their communities, not just black boxes that consume things. Compartmentalizing their roles as consumers without regard for their broader roles in civic society is just a bit of rhetorical sleight of hand that oversimplifies the picture.

How is this logic any more rigorous than trickle-down economics? Mom & Pop Hardware could be taking 100% of their profits to Vegas every year and blowing them on blackjack and hookers.

Well, for one thing, there's empirical evidence this isn't the case, and even if there weren't, it would be possible to study it empirically, as it's a much more direct effect. Trickle-down offers a picture so abstract and complex no one can demonstrate it.
posted by saulgoodman at 10:33 AM on July 2, 2013 [2 favorites]


But studies that look at the actual economic impact don't find this. They find that the local economies suffer.

This isn't generally true, see for example recently-nominated CEA chair Jason Furman's work, or Hausman, among others. Hausman is looking at groceries, not hardware, but the same principle applies.

They're taking all the profits out of these local economies--whatever profits they gain through improved efficiency and whatever profits were there to be had in the retail market to start with.

Can you explain why this isn't an argument for autarky in general? Whenever I've been in a small hardware store, they have offered products from large manufacturers--why shouldn't they have been prevented from doing so, and instead only offered hammers made by the local manufacturer?

As a somewhat minor aside, I'm surprised by the persistent support Mom and Pop's have among left-leaning types, given my experience with them: "blah blah blah Obamacare will make us bankrupt blah blah blah Bernanke's hyperinflation killing us on costs blah blah blah safety regulations bad blah blah blah."
posted by dsfan at 10:34 AM on July 2, 2013 [1 favorite]


Here's a cite for that last claim. And another. And another.

dsfan: Speaking for myself, it's because I grew up in a town whose economy was dominated by big chain stores and that had no economic base of its own, and I saw for myself the effects these arrangements have on inhibiting entrepreneurship, stunting the development of a distinctive local culture, and on suppressing local wages. It's not because I went to some coffee house meetup and learned some phrases to repeat from someone with a book to sell, as you might be imagining.
posted by saulgoodman at 10:40 AM on July 2, 2013 [1 favorite]


I'm surprised by the persistent support Mom and Pop's have among left-leaning types, given my experience with them: "blah blah blah Obamacare will make us bankrupt

You're surprised someone would care about the welfare of people who don't 100% share their politics?
posted by straight at 10:40 AM on July 2, 2013 [7 favorites]


They just need a robot run warehouse
So far our fabulous future only brings us "keep working I don't care if you have heatstroke" warehouses.


Amazon announced on Monday that it is acquiring Kiva Systems, a maker of robots that service warehouses, for $775 million in cash.
posted by psycho-alchemy at 10:41 AM on July 2, 2013


Can you explain why this isn't an argument for autarky in general?

Sure. Of course it doesn't make sense to manufacture hammers somewhere where there's not a readily available supply of steel/iron/whatever's used to make hammers. But that's confusing manufacturing with retail anyway.
posted by saulgoodman at 10:41 AM on July 2, 2013 [1 favorite]


ghharr, the way you're framing things is heavily informed by a worldview that is not without flaws and not universally shared.

Here's what I hear you saying:

"A paternalistic top-down government is taking important decisions away from hapless consumers who only and always want convenience and lower prices. If a business wants to build in an area they should have carte blanche to do so, regardless of what the local government says and regardless of what the local citizens desire."

There is at least one other perspective, though, that might go something more like this:

"This application by Lowes needs to be reviewed. Why? Because we are a community of informed citizens with similar interests who live together in a small, well-defined geographic area, and because we have seen what has happened in other small communities who do not take proactive steps to control their own destiny. We have banded together and created this review process so as to better negotiate with and protect ourselves from powerful external entities who have no stake in our long-term well-being, but who do have powerful motives for exploiting our resources."

Really think about the other perspective. Is it so obviously wrong? Is yours so obviously right?
posted by jsturgill at 10:44 AM on July 2, 2013 [3 favorites]


Because we are a community of informed citizens

I've never understood why so many lefties are so perceptive of regulatory capture at the higher levels of government, yet so naive about the possibility at lower levels. I mean, do you seriously think that the Cape's development policies are based entirely - or even mostly - in some well-meaning desire to "control their own destiny"? There are powerful entities who benefit pretty significantly from those policies. Look who paid for this nonsense "analysis" of the economic effects of a Lowe's store. Do you think this group is divorced from the political process?

powerful external entities who have no stake in our long-term well-being

Can you explain this? Opening up a new big box store is a pretty serious investment for a chain like Target, Wal-Mart, or Lowe's - an investment they expect to pay off. What makes you think that they have "no stake" in an area's long-term well-being?
posted by downing street memo at 10:52 AM on July 2, 2013


dsfan, from the Hausfman link:
Thus, while we do not estimate the costs to workers who may receive lower wages and benefits, we find the effects of supercenter entry and expansion to be sufficiently large so that overall we find it to be extremely unlikely that the expansion of supercenters does not confer a significant overall benefit to consumers.
He explicitly does not calculate costs, only benefits, which is like... you know. Only half of a cost/benefit analysis.

I also am not super pleased with the monolithic "consumer" being put in conflict with "workers," and with no other stakeholders being mentioned or analyzed.
posted by jsturgill at 10:54 AM on July 2, 2013


Really think about the other perspective. Is it so obviously wrong? Is yours so obviously right?

I think the two viewpoints you've put into opposition frame the problem pretty well: that second viewpoint is wonderful and but feels Pollyana-ish. Communities don't currently seem well equipped to do this (in my limited experience in two New England states). Instead of consensus, the needs of the loudest/ most-connected are met and those who do want to engage in the kind of thing you're talking about are quickly sidelined by any number of well-prepared and well-heeled special interest groups.
posted by yerfatma at 10:57 AM on July 2, 2013


Speaking for myself, it's because I grew up in a town whose economy was dominated by big chain stores and that had no economic base of its own, and I saw for myself the effects these arrangements have on inhibiting entrepreneurship, stunting the development of a distinctive local culture, and on suppressing local wages. It's not because I went to some coffee house meetup and learned some phrases to repeat from someone with a book to sell, as you might be imagining.

I don't think you learned it at a 'coffee house meetup,' but I really would like your evidence that 'local economies suffer'--you keep producing cites on the wages of a particular group of workers, or stuff from a trade organization. I'm talking about actual, peer-reviewed economics about general economic impact which includes the impact on consumers. Do you have anything like this?

He explicitly does not calculate costs, only benefits, which is like... you know. Only half of a cost/benefit analysis.

Yes, exactly (sorry I wasn't clear, you're right to call that out), but you have to account for consumers in a cost/benefit analysis for it to make any sort of sense--otherwise any technological progress is damaging because some workers will be displaced.
posted by dsfan at 10:58 AM on July 2, 2013


Really think about the other perspective. Is it so obviously wrong? Is yours so obviously right?

It's a fine perspective but I think it misstates the size of the banded-together community when more likely there is a small portion of the population in loud opposition, led by local business owners, and then a large mass who don't really care but would probably shop at Lowes.
posted by ghharr at 10:59 AM on July 2, 2013


If we make all our decisions based upon the consumer model, we really haven't progressed much past bacteria and single cell fungi.
posted by psycho-alchemy at 10:59 AM on July 2, 2013


I've never understood why so many lefties are so perceptive of regulatory capture at the higher levels of government, yet so naive about the possibility at lower levels.

Even if the local economy is dominated by a few rich local business owners, they at least are more likely to spend the money the earn locally than are the shareholders of Lowe's.

The entire reason Lowe's wants to build a store in Cape Cod is that they expect to take more money out of Cape Cod than they put it.
posted by straight at 11:08 AM on July 2, 2013 [1 favorite]


Part of the charm of the Cape and Islands is that getting stuff, or getting stuff done, that is easy elsewhere (NYC, for example, or even an average size suburb with a nearby highway) can be an enormous pain in the ass. Hardware stores close at 2 on Sunday here. So you have to get up early if you are going to get there and get your claw hammer or whatever. No time for mimosa's and shrimp pancakes! People who live there year round pride themselves on being self-reliant, DIY kinda folks. I say keep the big boxes out. Why take a place that is even a little different from the ever-encroaching Camazotz around us and strive to make it more like everywhere else? Why not let what is left of the good, old world quietly plug along, paying slightly higher prices maybe, but employing more local people, and trying to keep that money local?
posted by vrakatar at 11:10 AM on July 2, 2013 [2 favorites]


Big box retail is nothing if not efficient,...

Maybe it's nothing, then.
posted by Kirth Gerson at 11:15 AM on July 2, 2013 [3 favorites]


Okay, dsfan. Here's a study from the peer-reviewed Economic Development Quarterly that finds:
Economic growth models that control for other relevant factors reveal a positive relationship between density of locally owned firms and per capita income growth but only for small (10-99 employees) firms, whereas the density of large (more than 500 workers) firms not owned locally has a negative effect.
Here's another (pdf warning) from the UC Berkeley Center for Labor Research and Education. It finds:
Our research finds that Wal-Mart store openings lead to the replacement of better paying jobs with jobs that pay less. Wal-Mart’s entry also drives wages down for workers in competing industry segments such as grocery stores.
posted by saulgoodman at 11:22 AM on July 2, 2013 [2 favorites]


I know the economic evaluation aspect is what makes this particular fight notable, but it really seems like the only thing unique (to Cape Cod) about Lowe's is the size. There is tons of chain retail on Cape Cod, there's even Wal-Mart and Home Depot, albeit smaller than normal ones.

Where was:
The entire reason Lowe's wants to build a store in Cape Cod is that they expect to take more money out of Cape Cod than they put it.

When they were building a dozen Dunkin Donuts and Starbucks, or Walgreens, or K-Mart, or Trader Joe's?
posted by ghharr at 11:24 AM on July 2, 2013


Potomac Avenue: "Cape Cod did create such very unusual laws, and the result is a relatively healthy locally-managed economy. Partially that is due to tourist dollars but ask Ocean City MD or other decaying beach communities how their lack of regulation of box stores is working out in terms of tourist viability."

Careful regulation has indeed kept the Cape a much nicer place than many other East Coast beach communities. There's a reason why my family drove from NJ to Cape Cod to go to the beach every year.

And, yes. The "old world" vibe of the cape can be fun, but I think that it might be time for the region to start allowing a bit more modernity to seep in. The (mid) Cape has been my family's vacation spot for my entire life, and although I haven't been in a few years (an error that I'll be correcting in a few weeks), everything seems to get a little older, a little less crowded, a little more decrepit, and a little more depressing every time that I visit. Businesses that were once thriving are mostly still there, but seemingly trudging along in stasis, all desperately looking like they need a new coat of paint. Meanwhile, there aren't terribly many new businesses, and I've noticed more homes falling into disrepair.

Despite all this, I'd characterize the Cape as being fairly stable. However, I worry that it's on a long and slow decline that its residents are choosing to ignore.
posted by schmod at 11:28 AM on July 2, 2013


We can go round and round on this forever, but the fact is I'd rather live in a place (like DC or New York or the Cape) where local businesses are even ALLOWED to attempt to protect themselves over places like Mississippi, Kansas, Oklahoma and Alabama, the states friendliest to WalMart and other "New Businesses" (ie chain stores), which have some of the lowest incomes and highest poverty rates in the country.
posted by Potomac Avenue at 11:30 AM on July 2, 2013 [3 favorites]


Here's a study from the peer-reviewed Economic Development Quarterly

Thank you! I will see if I can smuggle a copy from some academics I know. (On the second study, I don't dispute the potential for labor market impacts so this wouldn't necessarily change anything for me unless the effects were so enormous as to swamp consumer impacts, and I don't think this is the magnitude of impact they are talking about).
posted by dsfan at 11:36 AM on July 2, 2013


Speaking as someone who actually lives on Cape Cod and has lived in several mid-Cape and lower-Cape towns including Dennis.

I'd wholeheartedly welcome Lowes! The existing retail businesses don't seem to be serving the population well with competitive prices, particularly good wages/benefits, or customer service. I'd expect the opening of the Lowes to eliminate a huge number of miles driven to the existing Lowes store in Kingston, MA. The site in Dennis is already one the few retail hubs on the Cape and would not at all be out of character for the area.

To me anyway, much of what the Cape Cod Commission does smacks of power hungry regulatory capture, cronyism, rent seeking, and unchecked favoritism to other politicians and local business interests (IOW, hardly in the interests of the vast majority of Cape citizens). Several of the Cape towns have at one time or another held close referendums on leaving the CCC.
posted by Consult The Oracle at 11:53 AM on July 2, 2013 [1 favorite]


Your welcome dsfan! Here's another study from the National Bureau of Economic Research that finds:
The employment results indicate that a Wal-Mart store opening reduces county-level retail employment by about 150 workers, implying that each Wal-Mart worker replaces approximately 1.4 retail workers. This represents a 2.7 percent reduction in average retail employment. The payroll results indicate that Wal-Mart store openings lead to declines in county-level retail earnings of about $1.4 million, or 1.5 percent.
And finally another from Penn State that finds a correlation between higher local poverty rates and the introduction of Wal-Mart stores.

These results might not be completely generalizable to Lowes, which is a lot more specialized kind of retail store. But Lowes can have a big negative impact on local independent contractors.

unchecked favoritism to ... local business interests

But local governments are supposed to show favoritism to local business interests. They're not supposed to be impartial but reflect the interests and will of the local population. That's core to their intended function.
posted by saulgoodman at 12:10 PM on July 2, 2013 [1 favorite]


But local governments are supposed to show favoritism to local business interests. They're not supposed to be impartial but reflect the interests and will of the local population. That's core to their intended function.

There's a balance to be struck between local businesses and the local populace (which generally benefits from the increased competition that incumbent businesses seek to limit). Also, it's not so much local business interests that local governments protect as it is incumbent businesses, as anyone trying to get a liquor license or taxi medallion can probably attest, locally owned or not.
posted by ghharr at 12:20 PM on July 2, 2013


Consult The Oracle: When I've bought stuff at Mid-Cape, the prices aren't particularly out of whack that I've noticed. Their selection is sometimes surprisingly sparse for such a large building - partly, I think, because of their very not-dense interior layout. The lumber is okay - I haven't bought much lumber at Lowe's, but I know Home Depot (at least in Somerville - haven't been to the one in Hyannis) has sometimes rivalled Grossman's Bargain Outlet for quality.
posted by rmd1023 at 12:25 PM on July 2, 2013


And that would be the problem with buying lumber online - you wouldn't get to deselect those warped, knot-filled 2X4s.
posted by Kirth Gerson at 12:40 PM on July 2, 2013 [2 favorites]


The entire reason Lowe's wants to build a store in Cape Cod is that they expect to take more money out of Cape Cod than they put it.

Whereas Mom & Pop expect to die in poverty?

the states friendliest to WalMart and other "New Businesses" (ie chain stores), which have some of the lowest incomes and highest poverty rates in the country.

Wouldn't being in that situation make you friendly to almost any sort of business? How does one determine if the tail is wagging the dog? And if we're saying no to "chain stores" as a class, how far does that go? Are franchises ok?
posted by yerfatma at 12:48 PM on July 2, 2013


And that would be the problem with buying lumber online - you wouldn't get to deselect those warped, knot-filled 2X4s.

It wouldn't be terribly difficult to have an automated process whereby a robot takes a picture of the wood and certifies and grades it using pattern recognition software to be free of warps and knots. You could set up a factory where this was part of the process and it would probably take a 1/2 second for every 2x4 if that. If we have face recognition software in hundred dollar cameras we can have knot recognizing software in billion dollar factories.
posted by ishrinkmajeans at 12:56 PM on July 2, 2013


The entire reason Lowe's wants to build a store in Cape Cod is that they expect to take more money out of Cape Cod than they put it.

Whereas Mom & Pop expect to die in poverty?


Maybe read the sentence before the one you quoted?
posted by straight at 1:15 PM on July 2, 2013


But it's begging the question, especially in the current age when you can order most anything from Amazon and a car straight from the manufacturer. The concept of a "local economy" needs a bit of updating. And no one becomes "rich" by plowing money back into any economy, they do so by saving their money, which in aggregate winds up in mutual funds or other pooled investments. Jimmy Stewart isn't walking through that door.
posted by yerfatma at 3:03 PM on July 2, 2013


winds up in mutual funds or other pooled investments.

Or into Mom and Pop's savings account to junior can go to college, and become a good member of the community? Or into their savings so they can expand and hire more people? Or to their favorite local charity or cultural org? Or maybe into a local potlatch?
posted by vrakatar at 3:53 PM on July 2, 2013


no one becomes "rich" by plowing money back into any economy, they do so by saving their money, which in aggregate winds up in mutual funds

But a local owner is much more likely to spend some of the money in the community where it was made. Stockholders of Walmart are unlikely to spend any money at all in the communities their profits came from.
posted by straight at 4:17 PM on July 2, 2013 [1 favorite]


Stockholders of Walmart are unlikely to spend any money at all in the communities their profits came from.

I'd imagine that the rich people who live in Cape Cod own their fair share of Walmart stock.
posted by Hatashran at 4:19 PM on July 2, 2013


Potomac avenue: This paper from the ILSR site linked above states that the overall price decreases claimed by WalMart are off-set by other community costs and are highly suspect.

Basically it lowers costs for lazy middle class folks who won't shop at Building 19 but will drive a few extra miles to go to Wal Mart but when the budget stores go out of business in the poor neighborhoods the lower income folks suffer.
There's a problem with the link. Try this one and "view" instead of "download"
posted by spbmp at 5:28 PM on July 2, 2013


Hatashran: I'd imagine that the rich people who live in Cape Cod own their fair share of Walmart stock.
Come on, the only way this makes sense as a counterpoint is if (a) the people of Cape Cod will become noticeably richer when the store opens because that one store opening will boost their stock shares so much, or (b) such a substantial portion of Walmart stock is owned by Cape Codders that the stock increase from opening that store will be mostly felt and spent there and not spread around the world.

(And besides that, who's rich? Weren't we just talking about the economic difficulty people are suffering on the Cape. It's improving, but it's not good.)
posted by spbmp at 6:02 PM on July 2, 2013


Or into Mom and Pop's savings account to junior can go to college, and become a good member of the community?

They put all that money into Random Goddam Art School and it totally comes back to the community when the kid doesn't have a job. Good work. You earn $500k at the hardware store, plow $400k into a college 12+ hours away and that's way better than the money going into Lowe's share holders pockets because . . .
posted by yerfatma at 7:39 PM on July 2, 2013


Stockholders of Walmart are unlikely to spend any money at all in the communities their profits came from.

Except some of them live there. As opposed to random made-up saints.
posted by yerfatma at 7:40 PM on July 2, 2013


So you would seriously argue that as much or more of the money circulating in a given community comes from stockholders spending the returns on their Walmart stock as comes from local business owners spending the profits of their businesses?
posted by straight at 8:52 PM on July 2, 2013


Every new Wal-Mart that opens costs taxpayers between $900,000 and $1.75 million a year in food stamp benefits for woefully underpaid workers

You could also solve this problem by reducing food stamp benefits, if cost is the only problem.
posted by corb at 11:35 PM on July 2, 2013


So you would seriously argue that as much or more . . .

Nope. I would only argue that sloppy logic/ accounting shouldn't be more acceptable simply because it's the warm and fuzzy side of the ledger.
posted by yerfatma at 7:06 AM on July 3, 2013


What's fuzzy about the claim that profits made by a business owned by a resident of Cape Cod are more likely to be spent in Cape Cod than profits made by a Walmart in Cape Cod?
posted by straight at 9:39 AM on July 3, 2013 [1 favorite]


It's been empirically demonstrated to be the case, too, as I pointed out in several comments up-thread. The hypothesized, trickle-back-down from Wall Street effect has not.
posted by saulgoodman at 11:07 AM on July 3, 2013


Shaking my head at the fact that people are seriously disputing whether local businesses tend to circulate more money through the local economy. Yes, they do. Fuck Lowe's, Fuck Wal-Mart,and fuck "low prices for consumers are the most important thing!" We've lowered our standards too far unless the end game is every typical American making $1.50 a day in our lovely "the Earth is flat!" dream world.
posted by lordaych at 9:24 PM on July 3, 2013


Lowe's is shit when it comes to their contracting practices... What I've noticed, anecdotally, is downward pressure on typical contractor wages, a redefinition of "typical" to "fucking horrible" and then a stark very upward pressure on competent contractor rates.
posted by lordaych at 9:27 PM on July 3, 2013


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