Do store closures matter?

There have been some notable retail store closures this year in the metro. On May 15th the Target on Lake St in Uptown is shutting its doors. This is one of their smaller stores and the housing nearby is quite affluent. I’d peg this loss more as an inconvenience than a hardship.

A few weeks ago the large Wal-Mart in Brooklyn Center closed. The corporation cited safety concerns for their workers but undoubtedly the rampant theft which has festered in this commercial node for quite some time was also a factor. Let’s assume that this last point has been aggravated by the failure to prosecute youth shoplifting. The recent philosophy here seems to look the other way on small crimes to stop the school-to-prison pipeline.

Pushing the costs of theft off onto corporations is simply a social tax. To save some wayward youth from entering the system, retail stores like Walmart take a little hit.

The problem with this occurs when the business removes itself from the mix. By choosing to exit the market, now it is the customers of the store who suffer a loss. According to the US Census, the per capita income in Brooklyn Center is just under $26K. Some were interviewed when the store announced its closure. Wal-Mart’s lower prices will be a greater loss to them in relative terms. So the calculation changes. The expense of higher crime is privatized across neighbors who don’t have a lot to start with.

The poor get poorer.

Shifting social costs through mandates onto business is precarious. Not because the costs are not real. Not because the businesses don’t have funds. The reason is that the nature of creating and maintaining value in social circles is different than in business. You don’t run your family like a business. Businesses are not the most efficient mechanisms for fulfilling social demands.

(Just for fun let’s think in terms of publicness and privateness. If the flow of benefit is Pub-to-Priv use this term, or Priv-to-Pub for the other way around. Changes in the judicial process give a Pub-to-Priv flow to youthful delinquents. Businesses internalized the public cost as a private expense. Then, at a certain point, exits do to the high costs.

Now the Pub-to-Priv transfer can be described as the loss of public safety transfer at a private cost by all the shoppers who now pay a surcharge at more expensive stores. To solve this, we would need to have some idea of the long-term benefits to the wayward youths. Lifelong criminals are an expense. Does this strategy work and is the benefit of keeping the youth out of a life of crime greater than more expensive groceries?)