The
ecosystem has been a hot topic as of late due to global warming
concerns, but there is another ecosystem that is in danger, local
economies. And they are just as fragile and interconnected as
any ecosystem found in nature.
In
recent years, there has been a systemic growth of internet based
companies, such as Amazon, selling at a discount direct to the
public. On the surface, this seems like a great way to save a few
dollars. But as local economies begin to feel the effects, it is far
more costly in the long run. Economies are extremely interconnected
and interdependent much like our environment. When you begin to
remove links from the chain, it all starts to unravel and in many
cases this can not be reversed.
Every
business depends on other businesses even if they have no direct link
or obvious connection. Ten years ago, large box stores were wreaking
havoc on small business by under-selling them and driving them into
bankruptcy. The justification for this was that they provided
jobs and cheap commodities to the public. However, even they are in
danger now, and the new predator is not creating jobs and is
destroying local economies. Thriving stores such as Best Buy did run
mom and pop stores out of town but they did employ people and created
what has come to be known as anchor stores. These are popular
retailers that draw crowds to them and smaller stores and shops
formed “mini malls” around them, feeding off their foot traffic.
Online
stores do not have this effect, and as anchor stores like Best Buy
begin to close, so do the smaller shops that counted on them to bring
in customers. Many large retailers are complaining that their former
customers are now coming in to look at products in person, then going
home and ordering on line to save a few dollars. The ramification of
this is staggering. When a large box store closes its doors, three or
four smaller shops fail, due to a sudden slump in business. Then,
where there was once a thriving mini mall, there is now abandoned
buildings that are only growing weeds and inviting vandalism.
As these mini malls collapse, so does the local economy. Everyone who provides goods and services depends on their local customers to be employed in order for a healthy economy to flow. As stores close and people lose their jobs, a domino effect begins. Doughnut shops that do not directly compete with online stores fail because the employees of local businesses that have closed their doors no longer stop for a bagel and coffee. Property values drop due to the dilapidated appearance of a main street devoid of business.
Where
there were once shops and stores, there are now vacant buildings.
Local municipalities that depend heavily on taxes collected from
local businesses as well as licensing fees paid by businesses are no
longer being collected, so the local infrastructure suffers as well.
Soon the area becomes further depressed, driving down property values
and insuring no new business will open in these neighborhoods.
The
quality of life is indeed impacted, and in some ways that were not
even considered. I have a family member who during a conversation
brought up how much they missed going to Blockbuster video with the
kids on a Friday night and picking out a movie. She complained about
how Red Box did not have nearly the selection Blockbuster did and
that new movies were not available for weeks on Red Box. She
also said how much she missed walking down all the isles looking at
the movie covers and finding an old movie she enjoyed as a kid and
renting it for her children. I asked her if she used Red Box when
Blockbuster was still in business. She said yes, but not all the
time, only half the time! I asked if she thought she could live on
half her income. The answer was obviously no, but she never
considered if everyone used Red Box half the time how Blockbuster
could survive on half their sales.
The
result was, Blockbuster’s employees lost their jobs, customers lost
an enjoyable experience, the landlord lost the income from rent, the
local government lost revenue in taxes and licensing fees, vendors
that provided candy, sodas and popcorn lost a customer and the
adjacent stores lost the foot traffic business which in some cases
caused them to fail. A savings of $2 in rental fees by the public is
the only thing that was gained. When you weigh the cost- to-
benefit, it really was a losing proposition for the local economic
environment.
The
message here is a grass roots approach to the local economic
environment. Citizens must be aware of their actions and understand
how it directly impacts them when they send their money out of the
local economy to some online retailer. It is imperative that we do
not pollute the air we breathe or contaminate the water we drink. We
know we can’t survive in an unhealthy environment. We also should
be aware that we cannot flourish in a community in decay and we have
control over this as well. Buy local! The job you save may be your
own and the neighborhood you impoverish is the one you raise your
children in. If it cost you an extra $2 to buy a baseball at the
corner store remember, that $2 will make its way back to you as money
in a community changes hands every day. If you spend it online, it is
gone from your local community and it’s never coming back.
