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Jewish World Review /Dec. 23, 1998 /4 Teves, 5759
Walter Williams
Unseen crime costs
(JWR) ---- (http://www.jewishworldreview.com) CRIMINAL BEHAVIOR HURTS in ways seldom appreciated and understood, and the
level of crime in black communities has consequences far more devastating
than the racism our ancestors experienced.
Not only does crime reduce upward mobility, it reduces the value of
anything in the community and turns whole neighborhoods into economic
wastelands. Let's look at a very minor example that captures the essence of
some of the unappreciated effects of criminal behavior -- the case of
supermarkets.
Supermarket owners seek to maximize the rate of product turnover per square
feet of rented or purchased space as a means to maximize profits or return
on equity. As you travel around, conduct your own experiment by observing
supermarket behavior in low- versus high-crime locations.
In lower-crime neighborhoods, you'll see maximum space usage. Merchandise will be seen
beyond the cashier's booth along the walls or windows and in entryways. In
some cases, you'll even see merchandise placed outside of the store along
the walkways. Sometimes merchandise (plants, fertilizer and peat moss) is
left outside overnight. All of this means the supermarket enjoys a more
profitable operation because it has a greater variety and quantity to sell.
This marketing strategy won't be observed to any significant degree in
high-crime locations. Managers in high-crime locations can't place items
near entry \ways and outside. That, in turn, means they pay for square
footage they can't put to commercial use. That raises their per-unit cost of
operation. In addition, supermarkets in high-crime neighborhoods often find
they must pay higher insurance. They must purchase more protective equipment
and hire guards -- neither of which is free. Since supermarkets operate on a
very slender margin, any kind of theft is very costly.
Chain supermarkets find it difficult to shift higher operating costs on to
customers. The same supermarket charging one price for a product in one
location and a higher one in another doesn't do much for goodwill and might
even invite prosecution. They might adjust by reducing quality or customer
service, but that too is risky.
Thus, a more likely supermarket response to
higher-cost neighborhoods is to move or simply not locate there in the first
place. Some would have us believe racial discrimination is the driving
force. In other words, white supermarket owners don't like dollars coming
out of black hands. That's nonsense.
Criminals not only impose costs on supermarkets but residents as well. Poor
people, least able to afford it, must either incur transportation costs to
shop outside of their neighborhood or patronize the more costly "Ma & Pa"
stores in their neighborhood.
None of this is to say supermarket theft doesn't happen elsewhere, but
there's a difference. A $10,000 shoplifting loss will have one impact when
total sales are $1 million a year and another when sales are $100,000. In
the first case, theft may be a minor nuisance written off on tax returns and
the second a business disaster.
The overwhelming majority of black people who live in high-crime
neighborhoods are law-abiding people preyed upon by a tiny percentage of
criminals. What's worse, they have a misguided sense of loyalty to black
politicians and civil-rights activists, who give aid and comfort to
criminals by making one excuse after another for their criminal behavior.
For them, crime is seen as a result of discrimination and poverty.
Such a vision differs little from saying that poor black people shall be
condemned to chaos, crime and unspeakable living conditions until the day
comes that the rest of society behaves itself. From the way I see it, that's
going to be a long
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