The Cost of Doing Business – Why it’s Important to Shop Local

I watched a news story a few weeks ago while I was waiting for my coffee to brew.


Google is facing a $5 billion fine from the EU for forcing smart phone manufacturers to put their interfaces on smart phones before consumers purchase the phone.


And the anchors discussed each side to this issue, and noted that it will take Google a walloping 16 days to make that $5 billion back (yes, billion… like… with a B, y’all… that’s $15 for each and every human being in the United States).


But while I’m stressing the insane amount of this fine, the anchors also made a comment at the end of the story that pretty much sums up what that means to Google – “It’s just a cost of doing business for them”


See, Google doesn’t care. They’ve made so much more than $5 billion off of the practices they’re being fined for. They will not change their management practices, or their corporate business policies. They won’t delay any projects, or update any plans for the future.


Google will just keep on keepin’ on – as they say.


So this brings me to my next topic in this blog – What IS the “cost” of doing business?


I don’t shop at X


At this point, I could go on and on for about 7 pages as to why I don’t shop at a certain large big box store (several of them… a lot of them actually…), and why you shouldn’t either, and I would probably get a lot of hate mail for it, because your husband works there, or you love their blah blah blah.


In fact, I did that, I had like 1,000+ words written doing just that, but instead I deleted it all and opted to focus solely on why it’s important to shop local.


Why it is important to shop local?


Well, I’m so glad you asked!


Follow the money.


Right up the road from the farm there is a multi-million dollar complex of ‘shops, restaurants, and entertainment’ going in. They’re also building a couple of chain restaurants in our little town of 5,000 people. These chains are not locally owned franchises, they’re corporate stores.


While everyone else is cheering for a $6 half caff mocha frappe whatever (oops, cat’s out of the bag as to what one of the chains is), I am just reeling.


Aside from that I moved to the country in part to get away from all of this commercial stuff, there is a real issue here that is undermining and destabilizing to our economy.

Yes… I went there.


Corporate owned chains do not keep your money local.


When you purchase a coffee at a locally owned business (the coffee shop for example), the money goes into the register, and is ultimately deposited into the bank account of the business owner.


That business owner lives in the community, and recycles those profits back into the same community. For example he or she spends their leisure dollars in the community, and utilizes other businesses in the community for household services (like plumbing and AC work).


In the best cases, those business owners even source the raw goods for their business to resell from other businesses within the community… like a farm to table restaurant.


If a local coffee shop hires a local A/C guy, a local coffee roaster, a local printer, and a local bank – when you shop at that coffee shop, your dollar supports all of those different households in that community. Money moves around that community, and the benefits are reaped by that community.


Now let’s switch to the corporate example.


Corporate chains take your order, and hand you the goods all the same. And just like in the local example, the money goes into a bank account.


However, unlike a local business, the money (and profits) from that corporate store go to a central bank account in another city where the main office is located.


The employees in these offices often earn much higher wages than the employees at the store, including and especially the upper management team.


CEO compensation is a big hot button issue in this country.


At its core, this issue is about the concentration of wealth. But whether you agree with CEO compensation levels at that scale or not is not the purview of my blog post.


My focus today is to just point out that every time you cast your dollar in the marketplace, you are voting for what kind of system you want. Every time you order a cup of joe in the morning – you are voting to either give 1,000 coffee shop owners $1 each or for 1 coffee shop owner $1,000.


It really is that simple.


CEO compensation may not be in your control. But where you choose to spend your coffee money? Well, that most certainly is.


But they hire people locally – and we need jobs, lady!


When large corporate chains build ‘stores’ in communities like mine, they generally publicize all the jobs they’ve created. But it begs the question, “Are these jobs really improving the community?”


Let’s go to a large retail box store. One I won’t name, but that I haven’t shopped at for like a decade now (yes, really).


Each of those stores generally employs several hundred people.


Whoa?! Really?! Hundreds of jobs in our community, Wendy, that’s a big deal, why are you hatin’ so much???


Let’s break down these jobs, shall we:

  • General manager – probably a 6 figure job, full time, with benefits. Quantity, 1

  • Assistant manager – probably a high 5 figure job, also full time, with benefits. Quantity, maybe like 6

  • Fill in the gaps on down to…

Cashier, stock clerk, cart pusher, etc – minimum wage job. Quantity? The majority of the jobs created.


Hours? Almost always part time.


Why? So they don’t have to offer full time benefits.


I waited tables all through college. There were 4 managers that had salaries that could support a family. There were about a dozen kitchen and back of house staff that could ‘get by’, and then dozens of servers, all working our way through school or whatever.

And when I was working this job – If you had too many hours in a week? You got sent home. Period.


But that’s what those jobs are meant for – teenagers that don’t need those perks, so what’s the big deal?


It’s all about balance in the marketplace.


The issue is that there is a difference between jobs being created and jobs being created that can actually pay bills.


Assuming an average family of 4, you will need jobs for two working adults for 50 years, and 2 teenager jobs for like 4. So, why are we celebrating so much at the creation a jobs that could support 2 teenagers for 50 years and 2 adults for 4?


(Again, I could go on for pages and pages, but entire books have been written on this topic, so I will refrain.)


And then what happens is that we compound that issue.


So let’s say we all go to work for minimum wage at the new clothing store, and then turn around and go buy a coffee at that chain, and then watch a movie at the theater. And everybody does this, and everybody keeps spending and sending all of their money into corporate offices.


Over time and once this spending activity is multiplied around the community it makes the community as a whole poorer, and the community on the other side of the tracks, richer.

Even if you are a manager with one of the better jobs, when you get your check back every other Friday, it is not going to be proportionate to the overall income of the store. Why?


BECAUSE YOU DON’T OWN THE STORE – YOU OWN NOTHING – NOT EVEN YOUR JOB.


You can be downsized at any minute due to consolidations. You have zero assurance that your job is secure.


In corporations, the profits all go to the shareholders… Whomever and wherever they are.


It goes to people that we know nothing about. No names, no faces, nothing – except that we know one very simple truth, each year’s profit must be higher than the last.


Otherwise, someone’s head is going to roll. And guess who usually goes first?


We’ve all heard about how the rich get richer and the poor get poorer, right?


That is how that happens!


… Not by some diabolical scheme.


… Not by some trickery of the system.


… Not by any sleight of hand.


We did that! WE, with OUR buying habits made it possible for ONE person in the United States to be wealthier than the entirety of many of the world’s countries.


Nobody else did it for us. We cannot blame ANYONE but ourselves for that.


It didn’t happen overnight. This kind of concentration of wealth happens slowly, one swipe of the credit card at a time, by you, and me, and everybody else in the community.

And all of these trends could just as well be reversed…. One swipe at a time… By you, and me, and everyone else in the community.


What is the cost of doing business?


I will grant that there will always be things, like the internet, that will never truly be ‘local’ – but for everything else there’s MasterCard (and cash).


Does it really cost more to shop local?


Is it really cheaper to buy something with a lower price tag?


What kind of system are you going to vote for with your dollars today?