Executive Briefings

Do Big-Box Retailers Create Enough Jobs to Warrant the Local Subsidies They Receive?

Handing out multimillion-dollar subsidies to large retail chains has become commonplace in much of the country. These deals are premised on the idea that new shopping centers and big-box stores expand employment and create economic growth. The trouble is, these giveaways have done little more than help large retailers at the expense of small businesses. There is little evidence of job creation.

No one knows exactly how much public money has flowed to chains. These subsidies take different forms-property tax exemptions, sales tax rebates, job tax credits-and most states do not keep a central record of every municipal and county development incentive. But Good Jobs First, a nonprofit research group that tracks these deals, estimates that large retailers have received at least several billion dollars over the past 15 years. Its executive director, Greg LeRoy, says the giveaways have continued through the recession, despite budget shortfalls and a glut of vacant retail space.

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Handing out multimillion-dollar subsidies to large retail chains has become commonplace in much of the country. These deals are premised on the idea that new shopping centers and big-box stores expand employment and create economic growth. The trouble is, these giveaways have done little more than help large retailers at the expense of small businesses. There is little evidence of job creation.

No one knows exactly how much public money has flowed to chains. These subsidies take different forms-property tax exemptions, sales tax rebates, job tax credits-and most states do not keep a central record of every municipal and county development incentive. But Good Jobs First, a nonprofit research group that tracks these deals, estimates that large retailers have received at least several billion dollars over the past 15 years. Its executive director, Greg LeRoy, says the giveaways have continued through the recession, despite budget shortfalls and a glut of vacant retail space.

Read Full Article