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
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.
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