Monday, November 10, 2008
Help the economy by shopping local!
Posted by Jeanne Foster on Mon, Nov 10, 2008 at 5:05 PM
Gambit Weekly and Alt-weeklies seek to help the economy by promoting local shopping
The project is based on data showing that money spent in locally owned businesses tends to stay in the area and circulate through the community, increasing economic activity. Economists call this the “multiplier effect.” If every one of the 195,000 Gambit Weekly readers were to spend just $100 with local, independently owned merchants, the impact would be 19.5 million on our local businesses. Shopping at locally owned businesses, helps re-circulate dollars in the New Orleans area, supports more local jobs and keeps our neighborhoods unique.
Readers who go online to bestofneworleans.com to pledge to spend a minimum of $100 will also be entered to win various prize packages provided by local retailers in the New Orleans area, including a digital camera from Moldaner’s and jewelry from Wellington & Co. This project will run through the holiday season.
Happy stress free shopping days from Gambit Weekly!
Comments (5)
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This is something I've never really quite understood. If I spend $50 at Walmart its not like its being airmailed to HQ, much of that is still going to pay employees, local maintainance companies, etc. On the flip side, if I spend $50 locally they're still purchasing power from Entergy, paying to have supplies and goods shipped in and by proxy for gas for those shipping companies. I'm sure there's a difference proportion-wise of money that remains in the local economy vs. money spent but I just don't see how it can be that high. At least not so high to justify people freaking out about it so much. In short, your 19.5 million dollars figure is just plain wrong. It would be 19.5 million minus the amount that would remain local if we were to spend at a chain. I'm not an economist but I just don't see how the difference could be all that great.
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It's called the Multiplier Effect, and it means that every dollar you spend with a local business ricochets through the local economy, whereas dollars spent at Wal-Mart - with the exception of salaries, etc. - are whooshed off to Arkansas, literally overnight. For more info, visit http://staylocal.org/
As a local merchant, thanks Gambit. Don't forget to shop in the Quarter, folks. It's not all tacky t-shirt shops it just seems like it.
Thanks for the link. I am not disagreeing that purchasing local goods - especially in New Orleans - is a good thing. I think concerns for aesthetics, putting a reign on the power of chains, and supporting local farmers are all valid. Heck, even the multiplier thing might be a way bigger deal than I intuit - I've seen no figures one way or the other. However, I do know that for any business operating costs are the primary source of expenditures. Basically, in the incredibly unlikely circumstance that chain businesses as a whole are making a whole 10% pure profit then that's only ten cents of the dollar. Heck even with that extremely liberal estimate of 10% profit margin (its likely far smaller) and the assumption that ALL of the proposed $100 per person spending would have otherwise been spent in chain stores that is still only $1.95 million. Nothing to scoff at but nowhere near the twenty million claimed. And adjusting for realism would probably give you a number no more than a couple hundred thousand. I agree that raising the profile of buy local movements is a good thing but I challenge the premise that a spending spurt can have any kind of significant impact.
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