March 9th, 2007 - The Local Multiplier Effect
According to Yes! Magazine (Winter 2007 p 35; data from Sustainable Seattle and Civic Economics):
* “For every $1 spent at a local business, 45 cents is reinvested locally.
* For every $1 spent at a corporate chain, only 15 cents is reinvested locally.”
I’ve maintained that buying from local businesses, did this, but others have argued against it. One major claim is that chain stores employ more people and have more money to donate back to the community. My argument in return includes that chaings tend to emply people at lower wages and lower levels (IE, a local business will include higher level managers as well as the owner here). And while they have more money to give, it’s not all given here (for instance, Target might donate $100 million dollars, but that’s given to a whole bunch of communities; the local JJ Keller company only donates money around the Fox Valley). And I suspect, although do not know, that big companies tend to donate to their home communities more, just like Miles Kimball does for Oshkosh.
Bonus information: “A study by the Leopold Center found that 16 common crops that frow in Iowa travel an average of 1494 miles to reach chain grocery stores there. Bought from local growers, they travel only 56 miles.”
Is it worth driving farther to patronize a local company? Eric and I are disagreeing about that one for our pharmacy. I like to use the local, NEW (NorthEast Wisconsin) pharmacy, but it’s on the other side of town. With our decreasing errand-running in general, we don’t get over there as often as we used to. So he switched his medications to the Walgreens which is less than a mile away. (Interestingly, Morton’s has two closer pharmacies, but we got used to the other one because it’s at our clinic. Why don’t we use the other ones as much even though they are closer?)