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A GUIDE TO RETAIL IMPACT STUDIES 4. ECONOMIC AND FISCAL IMPACT ANALYSIS OVERVIEW: Up to this point, the study has forecast the change in retail sales activity to be expected upon the opening of the proposed large-scale retailer. The final stage of the analysis will: Forecast changes in retail employment and wages. Forecast impacts on municipal revenue and costs. Forecast additional impacts on such factors as the supply of retail space and downtown, as specified by municipal directive or state statute. GLOSSARY: Economic impacts Fiscal include such things as employment and wages. impact refers to the effect of the development on government revenue and costs. DATA SOURCES: ESRI-BIS and/or Claritas; information provided by the retailer; local tax records; public data on municipal services costs; interviews with local officials. Forecasting Changes in Retail Employment and Wages While virtually all proposed large-scale retail developments will increase total retail sales and sales in particular lines of goods, employment increases are by no means automatic. Many of the largest retailers achieve employee productivity rates (revenue per employee and per unit of labor cost) that are substantially higher than most other retailers. As a result, a large-scale retailer with high worker productivity that creates relatively little new retail activity will likely have 2 a negative impact on total retail employment and wages as various studies have shown. The values for comparison here were generated in the second phase of the study. For the forecast of total retail employment in the market area without the proposed store, the analyst will bring forward in time (accounting for inflation and changes in the local retail sector) the most recent Economic Census data for sales, wages, and jobs in the retail sector. (See page 13 for a discussion of other public data sources.) Employment figures for the proposed large-scale retailer are derived from the first phase of the study. In the case of a proposed new store, the most reliable indicator of the total number of employees will come from the retailer itself. Absent a compelling reason to dismiss that 2 David Neumark (University of California-Irvine), Junfu Zhang (Clark University), and Stephen Ciccarella (Cornell University), "The Effects of Wal-Mart on Local Labor Markets," IZA Discussion Paper No. 2545, Jan. 2007; Arindrajit Dube, T. William Lester, and Barry Eidlin, "The Impact of Wal-Mart Stores on Retail Wages and Benefits," UC Berkeley Center for Labor Research and Education, Dec. 2007. 19