Local Spending

I’ll touch on a favorite topic of mine this afternoon, the economic multiplier effect and what it does in the economy.

Now, one thing to remember is that each area has it’s own multiplier, so shifting your spending locally might have a large effect than me moving the same dollar amount into my local economy. http://www.shift10laplata.org/ is a local (to me) organization that is trying to get people to shift their spending. They say that if everyone (they don’t define everyone… I’ll send them an email and ask) moved 10% of their purchases locally that we’d have 27,000,000 more dollars moving in the community. That’s a big number, of course not knowing the area they are looking at that might not be huge, but say it is for the entire contiguous United States that is still 540,000$ per state which is still a large number.

What does this mean for actual people? My main argument would be that most of us are employed by small businesses and therefore have a vested interest in the local economy. And if you aren’t employed by a small business you may have a favorite one or two that life just wouldn’t be the same if they went out of business.  In my case my wages come from the State of Colorado and the Federal Government, but I do work for a local business (A Community Centered Board) and also have those businesses that I’d be very sad to do without.

Today, I made one of those economic multiplier choices (only a bit influenced by my #BeLocalCoupon book) and decided to purchase honey locally. Now I’ve purchased from them in the past, usually in bulk too. This time though I spent 17$ and got 6 lbs of honey, they got me to come in and remember why I like to go up and get my honey directly from them What does that 17$ do for them? Well it pays for the wages of the person there, their store front, and of course for the bees. Bees don’t spend money in town, but the person there will probably spend her money in Durango, maybe even with another coupon book purchase.

Can you move 10% of your purchases locally? Or at least think about it?

What do you already purchase locally? Or what do you produce that you don’t need to buy anymore?

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4 thoughts on “Local Spending

  1. “Each area has its own multiplier.” But what exactly is a multiplier? What factors go into calculating it? And how can I figure out what the multiplier is for my area?
    I really am following this with great interest and learning a lot. Thanks!

    Like

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