Wal-Mart collected $10.2 billion in state and local sales taxes last year. None of them went to New York City, however, because the world’s largest retailer doesn’t have a single outpost in America’s largest city. Instead, New Yorkers seek discounts outside the city, trekking to Wal-Marts in Long Island, Connecticut, and New Jersey. Several of those New Yorkers were disappointed last week, when pressure from the City Council and organized labor sabotaged Wal-Mart’s first venture into the city. Vornado Realty Trust, a developer planning a new shopping center in Rego Park, decided to drop Wal-Mart from the project when it became apparent that the big-box store would threaten Vornado’s ability to win building permits and approvals from the city government.

“I think especially immigrant families at the low-income level will feel disappointed,” the founder of the Queens Hispanic Chamber of Commerce, Ernesto Curry, told our Daniela Gerson. “I have gone various times to the Wal-Mart in New Jersey and other parts of the United States,” one Elmhurst resident, Gelacio Vargas, said in Spanish. “The truth is, I always go where I find the best prices.” It’s too bad that poor immigrant families don’t have a powerful lobbying organization – such as the New York City Central Labor Council or the Retail, Wholesale, and Department Store Union – to look out for their interests. They are left to the mercies of the City Council, which is clearly looking out for other interests.

But the council can’t stop New York’s low-income families from shopping in other communities that have – believe it or not – actually permitted the nation’s largest private employer to set up shop. So residents of Queens and the other boroughs can still shop for lower prices, but the taxes they pay on their purchases will fund schools in Nassau and Westchester counties, and the jobs their business creates will go to workers in Elizabeth, N.J., and Norwalk, Conn. New York’s labor unions protest the loss of jobs in the city. But when you don’t allow new businesses to open, you can’t create new jobs. Watch for the council to seek to overcome the effects of driving sales tax revenue out of New York City by raising taxes on income and property.

The complication is that New York’s big box stores have proved to be tremendously popular. The new Target in Brooklyn’s Atlantic Terminal Mall was the top-grossing retail store in the country for its opening weekend over the summer. The Home Depot store on Hamilton Avenue in Sunset Park is reputed to be the chain’s busiest outlet. Clearly, there’s a demand for Wal-Mart in New York City. It’s going to be important now for the players in this policy debate to try to understand why.

It turns out that many of the grievances politicians level against Wal-Mart don’t hold up. About 90% of the chain’s employees hold health insurance. None of its outlets begin workers at the minimum wage. In truth, it’s not the well-being of workers that’s at issue. It’s the waning power of the labor unions. The marketplace is the logical institution to sort those claims out. Mayor Bloomberg, of all the candidates for the mayoralty, has seen the issue most clearly. “We have to make this city open to everybody,” he said on February 10. “There’s always two sides. Some people like big stores, some people don’t like big stores, but that’s in the end what the marketplace should determine.” Yet the mayor has been curiously reticent.

So who’s going to speak up for the little guy? “Wal-Mart is the greatest thing that ever happened to low-income Americans,” the chief economist at the Federal Reserve Bank of Dallas, W. Michael Cox, has said. “They can stretch their dollars and afford things they otherwise couldn’t.” When Gifford Miller and his colleagues on the City Council meet next to consider the future of big-box stores in New York City, it would be nice to think that – after hearing from big labor and all the “activist” groups that can’t stand Wal-Mart – they’ll lend an ear to Gelacio Vargas of Elmhurst.