Something is going on with shoplifting

Organized shoplifting mobs! Retailers claiming increases in shoplifting! Journalists claiming its an overstated numbers grift! Other journalists saying we should ignore shoplifting because corporate theft! The conversation about shoplifting is often hysterical and occasionally stupid, but that doesn’t mean something isn’t actually happening. Some of the facts seem clear, others murkier, and the underlying causes, like everything during this pandemic, are no doubt complex and uncertain. Let’s see if we can organize our thoughts a bit.

What we know

Shoplifting has been on the rise across the United States, with increasing theft of both staples for survival and the goods most easily resold on the black market. More specifically, and perhaps even more certainly, a still wealthy San Francisco, where one would expect retailers to desperately want a presence, can only seem to watch as its retailers flee. CVS is out. Walgreens is out. One Target it out (but not the biggest one). And the reason they claim is not commercial real estate overhead costs or declining customer bases, but an overwhelming increase in shoplifting (or what the retail industry used to call “inventory shrink”). While obviously not the whole story, the effective decriminalization of theft under $950 in San Francisco seems a key component. It doesn’t take any clever or subtle theorizing to expect that if the cost of theft under a certain threshold is radically lowered, then all you have to do is disaggregate your theft events across time and people to yield a sufficiently lucrative use of time (especially for those who are struggling or already carry the far weightier burden of a felony record). You can’t lower the opportunity cost of labor (less jail time) in a field of endeavor (boosting consumer goods) and pretend to be shocked when supply increases (more theft).

What we think

I am sure there is no shortage of “greedy corporations are abandoning American cities” and other malice-based theories, but those aren’t particularly useful theories. Retailers want customers and cities have a lot lot of them. So the first possibility is that they are simply telling us, and their shareholders, the truth– theft has reduced the profitability of stores such that the optimal decision is to close the doors. It would be a pretty shocking development to look back one day and realize that shoplifting was what closed the book on brick and mortar retail. Not Amazon or delivery drones, but the favored hobby of bored delinquents and subsidy of struggling families.

To those ends, though, a meteoric rise in shoplifting nonetheless feels, if not convenient, then incomplete as an explanation. CVS isn’t just closing in San Francisco, it’s closing 900 stores and moving to a new “store format”. Perhaps the better way of framing these closures isn’t a “crime wave of shoplifting” but rather more evidence that the brick and mortar retail industry is incredibly fragile, where any unforeseen increase in costs immediately threatens profitability. In a composite of shoplifting, online competition, the unabated growth of Costco and other wholesale clubs, and the rise in reservation wages of labor all across the country, which story would you want to emphasize to your shareholders as you close shops in urban centers? That you can’t compete? That you can’t afford labor? Or that you are being forced out by the crumbling of civilization into Mad Max dens of wayward lawlessness? At least the last one holds out hope that your business model isn’t wholly obsolete.

Still, people definitely seem to be stealing a lot of stuff, and that just creates one more cost advantage for online competitors and venues that require membership for admission. Things are changing, perhaps at an accelerated rate thanks to the pandemic and it’s accompanying bundle of policy responses. When considering fundamental change, observation of chaos rarely offers evidence to the contrary.

What can or should we do?

There are lots of things we should decriminalize. Lots. But I am extremely confident that theft is not one of them. The consequences are obvious, and in the short run will be felt almost exclusively by the poorest, who depend on local retailers, particularly those on the public transportation routes they take to work. Further, this is a problem that can metastasize as people don’t just supplement their incomes with theft, but specialize in it. It will hollow out the largest retailers and the smallest bodegas. It will change the the entire structure of physical marketplaces. It will change how people interact with core components of our welfare system. It will poison another relationship, this time between seller and customer, where people are increasingly viewed as a threat.

So what should we do? Desperate people stealing rice and other staples is one more argument for an unconditional universal basic income. People opting for black market income is one more argument for wage subsidies to increase relative attractiveness of wages in the legal market. And people stealing because the price of getting caught approaches zero? That’s an argument for raising the price of theft. Not to new and cruel heights, but to the levels they were at before i.e. high enough that theft is nothing but a last resort. A very last one.

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