Building your town: why half won’t cut it
Benjamin Disraeli once declared in the British House of Commons that “half of the cabinet are asses.” When called out by the Speaker, he quickly withdrew his statement, saying, “Mr. Speaker, I withdraw my statement. Half the cabinet are not asses.” While Disraeli’s political backpedaling was legendary, it highlights a crucial truth about community economic development: half-hearted efforts simply won’t work.
Sarah Martinez stood at the crossroads every small-town faces. As the newly elected mayor of Millerville, population 8,500, she watched another empty storefront appear on Main Street while residents drove thirty miles to the big box stores. The math was brutal but simple: her community was bleeding money—and jobs—at an alarming rate.
What Sarah discovered next changedeverything.
When the Anderson family renovated their 1950s diner instead of selling to a chain restaurant, something remarkable happened. According to the American Independent Business Alliance, 48% of each dollar used at locally-owned businesses recirculates locally, compared to 14% of purchases at chain stores. This means every $100 spent at Anderson’s Diner generated $48 in local economic activity, while the same $100 at a chain restaurant kept only $14 in town.
The difference wasn’t just academic—it was transformational. Within months, Anderson’s Diner was buying produce from local farms, hiring neighborhood teenagers, and sourcing equipment from the town’s hardware store. Each dollar didn’t just buy a meal; it created a ripple effect that touched multiple local businesses. This phenomenon, known as the local multiplier effect, reveals why community growth truly requires everyone rowing in the same direction. Small businesses employ 45.9% of American workers and are responsible for 43.5% of the country’s GDP. When communities rally around these businesses, they’re not just supporting friends—they’re investing in their own economic future.
Take the Hendersons, who started carpooling to support their neighbor’s auto repair shop instead of driving to the chain service center. Or consider Maria, who chose her friend’s accounting firm over the national tax prep franchise, even though it cost $50 more. These weren’t acts of charity—they were strategic investments. Studies show that every dollar spent at a local store contributes three times the jobs, income effects, and tax benefits to the
local economy.
The numbers tell a powerful story. Currently, 33.3 million small businesses operate across the U.S., employing more than 61.6 million people. Between 2021 and 2024, small businesses created 52.8% of all new jobs in America. These aren’t just statistics—they represent millions of families whose livelihoods depend on communities making conscious choices about where to spend their money. But supporting local business isn’t just about opening wallets. It requires businesses to step up their game. Seth Godin captured this perfectly: “The buying race is over. Amazon won. The shopping race though, the struggle to create experiences that are worth paying for, that’s
just beginning.”
Local businesses must excel at customer service and create experiences that justify higher prices. When Tom’s Hardware store started offering free tool repair clinics every Saturday, he wasn’t just fixing equipment—he was building relationships that big box stores couldn’t replicate. When the local bookstore began hosting author readings and book clubs, they transformed from a retail space into a community hub. The formula for community revitalization requires three critical elements working together: an educated public that understands the economic impact of shopping local, businesses committed to great customer experiences, and leadership that creates an environment where both can thrive.
Education is paramount. When residents understand that choosing local businesses over chains can contribute three times the economic benefit to their community, the decision becomes easier. This is where local media plays a crucial role, helping citizens connect their shopping choices to job creation, tax revenue, and community vibrancy.
Sarah’s Millerville is now a different place. Main Street buzzes with activity as residents intentionally support local businesses. The hardware store expanded, the bakery hired two new employees, and three new businesses opened in previously empty storefronts. The town’s unemployment rate dropped below the state average, and property values began climbing. The transformation didn’t happen because of one person or one business—it happened because an entire community decided to invest. Every dollar spent locally became a building block for a stronger economic foundation.
Communities across America face similar crossroads, the choice is clear: continue hemorrhaging economic vitality to distant corporations or harness the proven power of the local multiplier effect. The math is simple, but the real magic happens when neighbors help neighbors, creating a cycle of prosperity benefiting all. Community growth isn’t just everyone’s task—it’s everyone’s opportunity. Question isn’t can we afford to shop local; it’s whether you can afford not to.
John A. Newby is the author of the “Building Main Street, Not Wall Street” column dedicated to helping local communities, government and business combine synergies allowing them to thrive in a world where truly-local is being lost to Amazon and Wall Street chains. His email is john@truly-local.org