Should you buy local
There’s a movement to help the economy by buying local. The argument is this keeps money in the country and therefore creates more jobs. N.C. State University economist Mike Walden outlines the pluses and the minuses of this idea.
“This is really being pushed to two levels: First of all, at the national level the notion is to try to reduce our imports — that is, try to buy things that are made here in this country. And, for example, if we were to reduce all of our non-oil imports to 0 and buy all of those things here from domestic companies, that would create 17 million jobs. So we’re not talking about a trivial number of jobs here.
“But … there are a couple of cautions here. One, there (are) some things that are just not available — like oil — here in the quantities we need. And also, what if those foreign sellers, those folks that we import from, what if they say, ‘Well, O.K., U.S., if you’re not going to buy from us; we’re not going to buy from … you.’ And although we do buy more from foreign countries than we sell to them, if they were to reduce their imports to 0, we reduce our non-oil imports to 0, we’d then only increase jobs by about 1.5 million.
“The second level with this … movement, of course, … is that the local level, where local people say, ‘Hey, buy from stores here in our community. Don’t drive over to the metropolis 50 miles away. Buy locally here, from local companies.’ And again this could have a positive impact. A rule of thumb is for every $1 million that you spend at local stores that creates 15 to 30 local jobs. But again, there are a couple of buts here. One is … is everything that you want produced locally here in local shops? In the smaller towns, that’s not always the case. And also sometimes you can get a lower price if you go to a bigger city and, for example, shop in some of those large stores. So again, this is about trade-offs.”Category: Economic Perspective