I see a lot of push towards shopping local and supporting the local economy. However, the large national brands provide the same product for cheaper and provide more jobs than your local producer. Why should I pay more for an essentially equivilant product?
In: Economics
Because what they do is that they drain money of a city and move on.
Imagine this:
You don’t buy local.
Business for local goes bad.
He packs up and probably gets hired at big one for a decent-low money.
After this happens to most locals, the big guy starts pushing up prices and keeps the wages low.
There is no other option but to buy from them.
When they see the people are running dry, they pack up and leave.
Now the economic state of the city is significantly worse compared to before.
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This is my understanding anyway
The more you buy from Amazon, the richer Jeff Bezos gets, and the more Sam from Sam’s Hardware can’t afford to feed his daughter. Sam is your neighbor. Take care of Sam.
Because it supports the local economy. National brand stores send the profit back to corporate. Local store owners keep it local because they live there. Ideally it gets spent on other local businesses, building the economy and providing more revenue for public services like roads and such.
So you can virtue signal on social media that you are rich enough to pay more and how much you “care”
Firstly, it cuts down on carbon emissions. If you’re getting locally grown produce or locally made items, less pollution is created, because those items won’t need to be shipped across the country or imported. Secondly, by supporting Walmart and Amazon, you’re killing local businesses. Eventually, those businesses will no longer exist, and then the national chain will be free to raise prices because there is no competition. In the very long run, many of these national businesses will have invested enough in R&D to automate most of the low paying jobs, meaning many small towns will not only have no option but to shop at chain stores, but they will also be a wasteland for jobs.
To add to all the great replies. The city that is near where I live has a 1.something percent tax that goes for infrastructure. They paid for a stadium out of this sales tax.
Money is only useful when it changes hands. Every time somebody buys something from somebody else, *both* parties gain value they didn’t have before.
When you buy at a local store, the store owner keeps the money, and you get the thing you bought.
Then he buys produce from a local farmer, labor from local workers, rent to a local landlord, and pays back a loan from a local bank.
Then all of *those* people spend some of that money at other local establishments, all of which benefit from the increased economic activity. Some of that money will make its way back to you, both directly as increased business in the area, and indirectly in the form of better economic fortunes, better interest rates, more stores to choose from, increasing property values, etc.
On the other hand, if you buy from a national chain, the money goes to the corporate HQ, and 75% of that gets paid out as bonuses to executives and dividends to shareholders. Another big chunk goes to purchasing inventory, expanding businesses, etc. But that occurs mostly far away. Only a tiny fraction of a fraction goes to local workers in your town. Of every dollar you spend, $0.95 goes to random people (most of who are already extremely rich) rather than helping your neighborhood.
The opposite situation is an economy based on exports, or something like tourism, where lots of people from out of town come to spend their money in your local area. Just because they only stay briefly, the injection of money into the local economy helps the whole region, with more businesses and services getting built, and all of the people who built those things getting paid, and spending that money and so on.
I read your other comments, so I’ll answer here generalized.
I think you are thinking too big and about things that maybe is not really good to buy locally. A car, for example. You can’t buy a car made locally becouse it’s way too expensive to produce it in small.. A smartphone either, and so on..
But what about food? Why do we don’t buy food that is produced locally? It’s cheaper (here at least), it’s better (less chemicals) AND the money keeps running locally. Or handmade things, these aren’t cheaper, but usually it last longer AND the money keeps running locally. We prefer to buy on big markets becouse it’s easier, humans are too lazy.
The thing is, big companies don’t care about your neighborhood, who lives there maybe care, than the chance that they improve itself is bigger. And we, millenious from big cities, don’t have this sense becouse we are too megalomaniacs.
When you buy local you help a family. When you buy big you help line the overstuffed pockets of a rich CEO
Because it increases the speed money circulates at in the local economy.
Let’s say you work as a teacher in a school, buying a sack of potatoes which was sourced locally would mean supporting a local farmer, whom would be using a local mechanic for his tractor maintenance and whom would also be purchasing his supplies locally. Each of those people would be paying taxes, locally, and those taxes would support the local schools.
So part of the money would be going back in to your pockets because you’re a teacher. And then you could spend it on a carpenter to help fix your house and the cycle would continue.
What this would mean would be an increased amount of jobs in your area, which would reduce the poverty rate and crime rate and boost public services.
If on the other hand you purchased a sack of potatoes produced in another state, you would be sending the money over to that state so it could be circulated there and create jobs there.
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