You love the idea of buying local, but the next thing you know … click, you bought that gift online from a business based far from our community.  It’s so easy!  And your one purchase won’t really make a difference… or will it?

Shopping online impacts job growth, taxes, and land use patterns in our community.  Why?  One reason is the Local Multiplier.

The Local Multiplier occurs when you spend your dollars at a locally owned and independent business instead of a chain store or online giant. Spend your dollars at independent business and your dollars recirculate through our local economy four times more than if you spent that money at a chain store or online giant. As your dollars move through our community, the money generates more local wealth, charitable contributions, and jobs.

While the image above reflects national data, Monadnock Region independent retailers return, on average, $62 of every $100 spent at their businesses back into our local economy.  National chain stores return $14 of every $100 spent, while Amazon returns close to zero.

What causes the Local Multiplier to happen?

We can thank the actions of independent business owners for the Local Multiplier since they spend more of their revenue locally than chain stores and online giants.  “Say you spend money at a local pharmacy,” explains local economist and author Michael Shuman.  “Its employees then go to the supermarket, which might buy from a local farmer. The more times and the faster a dollar passes between hands without leakage, the more income, wealth, and jobs in a community.”

Job Growth

To get more specific about jobs, one study found that independent retailers employ 57 people for every $10 million in sales, while Amazon employs only 14 people per $10 million in revenue.  In 2021, Amazon sales in New Hampshire displaced 8,199 retail jobs, while Amazon employed just 1,000 workers in our state.

These statistics come from a Civic Economics study called “Unfulfilled.”  The report found that Amazon’s sales displaced 1,014,163 retail jobs and 621.8 million square feet of commercial space nationally in 2021.

In some communities, the cost to taxpayers is even higher when economic developers offer tax rebates and subsidies to attract Amazon to base some of its operations in their region.  As of November 17, Amazon and its subsidiaries received over $5.1 billion in public subsidies. Learn more at goodjobsfirst.org/amazon-tracker.  

The rise of online shopping, undercutting Main Street retailers, also changes land use patterns.  Amazon doesn’t place its warehouses downtown but in remote industrial parks.  Civic Economics concluded that as demand for Main Street storefronts declines, so will local governments’ tax revenue base.

“Amazon provides a valuable convenience, one that tens of millions of households (ours included) are willing to pay $99 a year to maximize,” said Matt Cunningham from Civic Economics.  “We do not believe, though, that Americans yet comprehend the nature of the tradeoffs to come. They may be asked to accept an increase of hundreds of dollars in annual household tax burden to pick up the slack from the stores they visit less often. They may be required to fund redevelopment efforts around struggling commercial districts and failed shopping centers, or to live with the boarded up storefronts.”

"This unprecedented study makes abundantly clear the deleterious effects on the American economy resulting from Amazon's strategy of retail dominance," said Oren Teicher, CEO of the American Booksellers Association. "It's our hope that the facts included in this report will help policymakers and the public better understand the need for more diversity in the marketplace and recognize the potential long‐term costs of the loss of healthy local economies."

Do you just love the ease of shopping online?  You can still shop online and shop at locally owned businesses.  Check out our online marketplace called The Local Crowd Mercantile.  Discover gift ideas from 200 Monadnock region businesses.  Thanks to Monadnock Food Co-op and Saving Bank of Walpole for allowing us to offer our online marketplace at no cost to participating businesses this year.

Remember, every purchase -- and click -- counts.  Please Shop Indie Local this holiday season: Gift Local and Give More!