That's a common refrain for "buy local", but is that always true? It seems to depend on many assumptions...
1) That the local business owner will invest back into the community, more than the chain store would have. Sure, some of that revenue will go towards employees, local sales tax, charitable donations, etc., but the same could be said of the chain store. The rest of the profit... what's to stop the local owner from accumulating savings in a national bank, or investing in out of area stocks, crypto, etc.? Unless they were thinking of expanding/franchising their store, their actual investments (as opposed to costs) may or may not be in the local economy vs whatever has the highest ROI.
2) That the local consumers who saved money from the chain store wouldn't simply spend that money at other local businesses. Let's say the chain store saves 1000 customers $10 each, that's $10k of unspent money that could be organically used at other businesses, vs that $10k being funneled into the control of a single small-business owner who might just invest it elsewhere. On average, there's probably a higher chance of 1000 customers spending at least SOME of that money locally than that one local business owner deciding to.
3) Small local businesses typically do not have the economies of scale that benefit pricing and processes, which means they don't have the same margins, which means they might not be able to afford good wages & benefits for their staff, or have to pass on those costs in the form of higher prices for local consumers (who then have less money to spend on other businesses).
4) Most market goods are fungible and UPCed and distributed across the whole country anyway, whereas things like schools and real estate are strictly local/geographical. Money consumers save can be spent on their own immediate family needs, building community by allowing them to afford actual roots instead of just shopping local and supporting that one small business owner.
5) Small businesses tend not to have a very diverse labor force (in terms of skill sets), especially if they're retail. That means the local labor pool has limited employment options beyond low-end service jobs. Especially in a post-COVID employment landscape, large digital-savvy companies probably offer a more realistic pathway out of rural poverty (i.e. people can learn skills, work for remotely for one, but stay local). The small local mom-and-pops can only very rarely offer that to local residents... maybe they contract a local print shop or two, but rarely do they employ full-time marketers, designers, artists, coders, architects, sustainability people, etc.
Basically the whole "buy local" argument seems to stem from the idea that your money is better in the hands of a small business owner than Jeff Bezos's pockets. Maybe that's true in some statistical sense, but it also misses the savings that YOU keep and can spend how you see fit, including investing in your community in actual, non-trivial ways (employment, real estate, schools, local government, marriage, etc.). Buy local might be good for local business owners, but I don't think it's necessarily good for local consumers or local communities. I'd be happy to see data showing otherwise though...
1) That the local business owner will invest back into the community, more than the chain store would have. Sure, some of that revenue will go towards employees, local sales tax, charitable donations, etc., but the same could be said of the chain store. The rest of the profit... what's to stop the local owner from accumulating savings in a national bank, or investing in out of area stocks, crypto, etc.? Unless they were thinking of expanding/franchising their store, their actual investments (as opposed to costs) may or may not be in the local economy vs whatever has the highest ROI.
2) That the local consumers who saved money from the chain store wouldn't simply spend that money at other local businesses. Let's say the chain store saves 1000 customers $10 each, that's $10k of unspent money that could be organically used at other businesses, vs that $10k being funneled into the control of a single small-business owner who might just invest it elsewhere. On average, there's probably a higher chance of 1000 customers spending at least SOME of that money locally than that one local business owner deciding to.
3) Small local businesses typically do not have the economies of scale that benefit pricing and processes, which means they don't have the same margins, which means they might not be able to afford good wages & benefits for their staff, or have to pass on those costs in the form of higher prices for local consumers (who then have less money to spend on other businesses).
4) Most market goods are fungible and UPCed and distributed across the whole country anyway, whereas things like schools and real estate are strictly local/geographical. Money consumers save can be spent on their own immediate family needs, building community by allowing them to afford actual roots instead of just shopping local and supporting that one small business owner.
5) Small businesses tend not to have a very diverse labor force (in terms of skill sets), especially if they're retail. That means the local labor pool has limited employment options beyond low-end service jobs. Especially in a post-COVID employment landscape, large digital-savvy companies probably offer a more realistic pathway out of rural poverty (i.e. people can learn skills, work for remotely for one, but stay local). The small local mom-and-pops can only very rarely offer that to local residents... maybe they contract a local print shop or two, but rarely do they employ full-time marketers, designers, artists, coders, architects, sustainability people, etc.
Basically the whole "buy local" argument seems to stem from the idea that your money is better in the hands of a small business owner than Jeff Bezos's pockets. Maybe that's true in some statistical sense, but it also misses the savings that YOU keep and can spend how you see fit, including investing in your community in actual, non-trivial ways (employment, real estate, schools, local government, marriage, etc.). Buy local might be good for local business owners, but I don't think it's necessarily good for local consumers or local communities. I'd be happy to see data showing otherwise though...