The Michigan Economic Development Corporation yesterday issued two press releases detailing efforts that will “bring 3,981 jobs.” Not so fast. There are many reasons the state’s job claims are basically fatuous, but here’s a big one.
One of the projects involves a Cabela’s Retail, Inc., an outdoor sporting goods superstore. My colleague, professor Michael Hicks of Ball State University (pictured, left), has studied the economic impact of big box retailers for years, including Cabela’s. He examined the entry of Cabela’s stores into six counties in six different states from 1998 to 2003. His conclusion?
The opening of a Cabela’s outlet created no consistent impact on employment in the counties in which they were located, nor the surrounding counties. His study has been published in the peer reviewed, “Journal of Regional Analysis and Policy.” For a PDF copy of his study follow this link: http://www.jrap-journal.org/pastvolumes/2000/v37/F37-2-4.pdf.
This is not Cabela’s first store in Michigan. In 2000 — and with state assistance — Cabela’s opened in Dundee Michigan. All of this expansion sounds great if you are an investor in Cabela’s, but what about existing outdoor retailers that may be crowded out of business by Cabela’s and their state and local incentives? There is a fairness issue here. Do they get a sporting chance at tax and other business cost relief? Probably not.
Arlene Yost, the co-founder of the popular, 40-year old Michigan fixture, Jay’s Sporting Goods, has said of the state’s interference “it sometimes makes you wonder who you are working for.” For more on this story, see my article, A Tale of Two Sporting Goods Stores, written for Michigan Privatization Report, at http://www.mackinac.org/article.aspx?ID=4475.
