John Newby: Save money instead of sending it to Wall Street | News

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Let’s start with the courtship of big boxes and chains pursued by most communities. Many leaders view these as a necessary evil their communities must attract to appear viable. It is true that by bringing big boxes and chains to the community they create jobs, increase the quality of life for some residents and provide a greater variety of goods and services all will enjoy. This also comes with unintended consequences affecting communities in ways many don’t consider. The greater the saturation of big boxes and chains, the greater the long-term economic risk to our communities. One might ask: How can this be?

It is those dollars leaving our communities that otherwise fund our police and fire departments, city government, water and road departments, parks and recreation, and so forth. Fewer dollars equate to fewer or less than desirable services. How does a community balance sending dollars to Wall Street in lieu of growing its own Main Street?

Communities must resolve to expend equal attention and resources on their local business, innovation and entrepreneur base. Nurturing startups will ultimately create the balance to weather the pending economic storm clouds of retail. With rapidly shifting retail and consumer habits, it is imperative community leaders have these critical conversations and find ways to stimulate local entrepreneurship and innovation. It is imperative they find ways to keep a greater percentage of their consumer spending local. The younger generations are leading us rapidly toward an experiential economy, something local businesses are better equipped to provide.

It is all about balance. Having big boxes and chains can initially be beneficial to the overall growth of a community. The bigger issue arises when communities vigorously court these big boxes and chains at the expense of organically growing their local business base. We must not forget that small and local businesses, mostly locally owned, employ the majority of all workers across the country. We must attend to that base equally.

Story Highlights

  • With an increase of big boxes, national chains and online shopping opportunities, many local governments are finding it increasingly difficult to make their local fiscal budgets stretch to cover their basic needs. In fact, many are already in severe financial straits. When community leaders view local spending, they must accompany this thought process understanding it means locally owned and operated. This on occasion may include national chains that are locally owned.

  • Very simply, the more money each of us spends with big boxes, chains and online, the bigger the drain on our local budgets as a greater percentage of those dollars we are spending leaves our communities, never again to return. Studies show dollars spent at locally owned businesses are three to seven times more valuable as they are recirculated multiple times throughout the community. Imagine gaining the tax revenue from three to seven transactions in lieu of collecting it once and all profits then being shipped to some far-off corporate headquarters.

These aren’t just nice discussions to have. The economic and vital future of every community under 100,000 is in danger of slowly being dismantled by economic change. We are sure of one thing — Wall Street cares little about our communities, unless of course it can extract more local dollars that boost its bottom line.

The future of our communities will be a byproduct of decisions we make today. Hopefully our community leaders will make those decisions based on long-term growth and not just short-term satisfaction.

John Newby is author of the “Building Main Street, Not Wall Street” column dedicated to helping communities combine synergies with local media companies allowing them to not just survive but to thrive. His email is john@360mediaalliance.net.