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Chapter 10 Page 13 of25 retail/food) were to locate in the city. According to the MCLR: "The presence of three such non-union super stores would take away work from supermarket workers already employed throughout the city. The grocery sections of the new super stores would employ the equivalent of three hundred sixty supermarket workers. Their presence would result in a decline in the hours of work of existing supermarket workers. (MCLR) examined three areas of impact: (1) The higher wages of existing supermarket workers, almost all of whom are unionized, and the wages of other workers whose jobs are supported by the multiplier effect,' which result in increased consumption in the area; (2) Higher employment attributable to this increased consumer expenditure; and (3) The increased taxes paid to the government as a consequence of the higher wages. "22 . Increased Consumption and Increase Jobs The study estimated that there is a $2.7 million dollar additional consumption in Santa Clara County, California because of the higher level of prevailing wages paid by the existing supermarkets compared to the average wages that will be paid by the new Supercenters which generally might only amount to one to two dollars above the minimum wage. Ofthis additional consumption(GDP), 82.7% comes from the higher prevailing wages ofthe supermarket workers, while the remaining 17.3% comes from the "multiplier effect," previously described, and the wages of workers who benefit by the secondary and tertiary respending of higher supermarket salaries.23 When a group of workers are paid more they consume more, thereby raising the overall c0113umptioH of goods and services in an area, in other words an increase in GDP. This consequently augments t.he . number of jobs in the community. The MCLR study found that in Santa Clara County, for every] 00 supernlarket jobs where the prt'vaien~ wage rate was paid, nine additional jobs were created. Of course, there is then a multiplier effect from the wages of these newly created jobs and the ~axes paid by these citiz~ns.24 In anolhe~study concerning San Jose, California, the Sidway Kotin Mouchly Group estimated $350,000 in new sales taxes would be derived from each of the new superstores locating in the county. However, they failed to measure the overall economic dynamics, i.e., declining tax revenues for pre-existing supermarkets and a net loss of jobs. The MCLR study predicted a loss of $1.3 million because of the difference in wages between prevailing (traditional supernlarkets) and non-prevailing (mega-retail discount chains) wages. The taxes created by the new super stores will be offset by the failure of pre-existing supermarkets, the loss of jobs and revenues. Results in Four States: Pennsylvania. California. Illinois and New York: Respondents to l\lost Questions on the Shils Ouestionnaire Almost Unifrmly Indicated Pessimism About Their Chances for Survival When Faced Competitively by the Mega-Retail Discount Chains The pessimism is shared by none other than our own President Bill Clinton who, in an address at the 1995 White House Conference on Small Business, on June 12,1995, stated that while more small businesses had sprung up in 1993 and 1994 than in any previous year since W orId War II, he was concerned about their ability to stay alive. He expressed concern about the high rate of failure and bankruptcies among small business. Chapter III disclosed that when the respndents were queried as to what the anticipated effect upon the firm's economic health might be if a mega-retail chain were to relocate nearby, the answers were . http://www.shilsreport.org/chap 1 O.html 10/6/99