Chicago’s Walmart Plea

After the riots, the city begs the company it once shunned to stay

WSJ editorial.

"Walmart spent years fighting local politicians to build new stores in Chicago, and it finally won approval in 2010 after paying off unions and liberal groups with a “community benefits agreement.” It now ranks among the largest employers in Chicago’s heavily minority south and west sides and throws off hundreds of millions of dollars in tax revenue for state and city politicians to spend. But after last week’s riots, Walmart seems to be having second thoughts about business in Chicago. 

Many large retailers including Walmart, Walgreens and Target had their stores heavily damaged and looted in the riots. During a conference call last week, Mayor Lori Lightfoot begged them not to bail on the city. Walmart wouldn’t commit to reopening damaged stores. “We are assessing each location to understand our ability to do that,” a Walmart representative said.

“I got a resounding, ‘Mayor, this is our city, this is our home,’ from a lot of other retailers and I would hope that Walmart would follow suit,” Ms. Lightfoot later said. Politicians are worried about the harm to low-income and minority communities from lost jobs and a dearth of fresh food if Walmart closes stores. “It’s a much-needed resource and invaluable store for our community,” Alderman Howard Brookins told Crain’s Chicago.

Some Walmart stores were already struggling to make money due to the city’s high taxes and onerous labor regulations. Chicago has the third highest commercial property tax rate among large U.S. cities after Detroit and New York City. For years politicians have been overtaxing businesses to pay for worker pensions, and higher taxes are guaranteed since pensions remain severely underfunded.

The customer base may also be shrinking as the non-rich flee Chicago. A University of Illinois at Chicago study this year found that 42,505 African-Americans left Chicago between 2010 and 2016 (the latest data). “Under-resourced or closing schools, rising rents, violence, and few economic opportunities characterize the conditions in many majority black neighborhoods in the city’s South and West Sides and are contributing to the exodus of residents and families from these communities,” the report noted.

Chicago’s population has shrunk by about 33,000 over the last five years—nearly three times more than Detroit’s. What a sad irony that the Chicago politicians who disdained Walmart for so long now beg the company to stay even as bad governance and crime drive more people away."