In the last 25 years or so, the U.S. has seen tremendous growth in big box, mega-retail stores. In one category after another, from hardware to office supplies, national chain stores have taken over retail markets across the country, often forcing out local, community-based businesses. Americans now do the majority of their shopping at national chain stores.
“We have welcomed this shift, in many cases, on the basis that it provides economic growth and it’s progress. But what a lot of research at this point suggests is that these companies actually have eliminated far more jobs than they’ve created and that they’re really undermining the American middle class and the economic health of our country.”
That’s Stacy Mitchell. She’s a senior researcher with the Institute for Local Self-Reliance in Minneapolis. She’s been studying the rise of mega-retailers in the U.S.
“The growth of the kind of Walmarts of the world, has undermined these two key pillars of the middle class. One are small business owners. We’ve lost tens of thousands of businesses that once provided an income for an individual or, in many cases, a whole family, and those businesses are now gone. And the other pillar of the American middle class that has been really hurt by the growth of Walmart and other big box retailers, are manufacturing workers. We’ve lost about 3 million manufacturing jobs since 1990. Many of those jobs were, you know, union wage scale jobs that paid, you know, a middle income kind of living. And, there are many reasons those jobs have disappeared, but one of the most significant is the pressure that companies like Home Depot and Walmart have put on manufacturers where they have gone in and said, 'Look, you either move to a low wage country and produce what you’re producing for less, or I’m going to go somewhere else.' And indeed, all of these big retailers actually source directly from factories from China and other low wage countries.”
But there’s a growing movement across the country to educate consumers about the benefits of supporting locally-owned, independent businesses in their communities.
“Over the last decade or so, there have been a growing number of buy local, or think local first campaigns that have been started by alliances of local businesses and community groups and citizens in towns and cities across the country. There are now about 130 of these initiatives going on around the country and there about 30,000 independent businesses that are involved.”
The argument is that dollars spent at community-based merchants have a multiplier effect in local economies.
“A local business, everything that needs to happen to run that local business is done locally. So all of their payroll is going into the pockets of people who live in the community. And the other reason, and probably more significant aspect of this, is that local businesses tend to buy a lot of goods and services from other local businesses. So, they bank at the local bank, they advertise in the community newspaper, they hire the local accountant, the local web designer. They just source more of what they need to run their business from other local businesses. And so those dollars keep circulating and the effect is that if you shop at the local pharmacy or at a local clothing store, whatever it may be, your purchase not only supports that business and its employees, but it sends this ripple of economic activity through the rest of your community and ends up supporting all of these other professionals and businesses in your local town.”
But what about those low, low prices? Most consumers assume that national chains and big box stores have the lowest prices across the board, a perception reinforced in major advertising campaigns. But Mitchell cautions against that assumption.
“You really have to be on your guard about the low price notion. My best advice is to look around at the independent stores in your community and look for places where it does make sense to buy local. In many cases, there are things that are perfectly affordable at independent stores, so just be more conscious of your shopping and again the message isn’t necessarily that you’re going to be able to do all your shopping at local businesses, but there are probably things that you could shift to local businesses and generate real benefits for your community.”
Stacy Mitchell is a senior researcher at the Institute for Local Self-Reliance in Minneapolis and the author of Big Box Swindle – The True Cost of Mega-Retailers and The Fight for America’s Independent Businesses.
More information about the “Buy Local” movement can be found at the American Independent Business Alliance website at www.amiba.net/