News that Wegmans Food Market hopes to open a store in Chapel Hill has been welcomed by fans of the chain’s service, quality, and prices. What must not be lost in the euphoria is whether Orange County taxpayers should subsidize that expansion by as much as $4 million.
The purpose of a subsidy is to encourage an activity that would not otherwise occur. Documents available to the public offer no evidence to support that claim. If Wegmans already plans to expand, the money will not be a subsidy, but rather, a payment to the corporation for doing something it would do anyway.
Another problem relates to the wisdom of using subsidies to support retail establishments. While important, retail establishments typically serve a concentrated geographic area and have comparatively small economic multipliers. If economic development dollars are scarce, should they not target industries with greater potential impacts?
Moreover, the retail sector is characterized by jobs that are largely part-time in nature, pay poorly and offer few benefits. Wegmans has a reputation of being a better employer than most, but the draft agreement indicates that most jobs will be part time and imposes no benefit requirements beyond current corporate policy. And as much as 30 percent of the store’s workforce could earn less than the cited wage standard of $12/hour. Even $12/hour falls short of many living-wage calculations for Orange County given the cost of living. Is it in the taxpayers’ interest to subsidize relatively poor quality jobs?
Lastly, why is the deal being rushed through? The deal was announced just a few days before the applicable public hearings and votes via a press release written in a tone that indicated the deal was done. That ham-fisted approach simply undercuts any trust in the wisdom of the proposal or the ultimate outcome.