Wednesday, February 4, 2009

Times are Tough? Buy Something From a Neighbor.

Ever hear of the multiplier effect? It’s the economy’s equivalent of “what goes around comes around.” That’s right. If you spend your money locally YOU will get some of it back.

“Think of yourself as being at the center of your own consumption Solar System with emanating rays of purchasing power,” says Michael H. Schuman, author of The Small-Mart Revolution: How Local Businesses are Beating the Global Competition. “Each purchase you make triggers purchases by others. For instance, a dollar spent on rent might be spent again by your property owner at your local grocer, who in turn pays an employee, who in turn buys a movie ticket” This is the multiplier effect. “The more times a dollar circulates within a defined geographic area and the faster it circulates without leaving that area, the more income, wealth, and jobs it generates. This basic concept in community economics points to the importance of maximizing the number of dollars entering a community and minimizing their subsequent departure.”

“The multiplier obviously diminishes with geographic distance,” Shuman continues. “The farther from home you go to make a purchase, the less of the multiplier comes back and touches your community. Buy a radio down the block, the multiplier is high; buy it ten miles away, the multiplier weakens; buy it mail order, and your community gets practically no multiplier.”

The most obvious boundaries for the multiplier benefits are the taxing subdivisions within which we live. All business generates taxes of one kind or another. Businesses that are paying taxes to the school district, for example, are paying in to a pool of money that we would all have to top up with our own cash if they didn’t.

The Schuylerville community has many local businesses that compete for our money with national chains. If you are comparing their products dollar for dollar, don’t forget the multiplier effect. For every dollar you spend locally, you get a financial return.

Think of Byron’s Market, Curtis Lumber, Saratoga Apple, and Parisi’s Appliance House. Think of Mid-Town Service, Joe’s Garage, Shelly’s Barber Shop, Olde Saratoga Bike and Board. There are many more: the bank, insurance agency, the restaurants… you probably know one, some or most of the folks who own or work in those places. You can probably even guess where they will spend the money you spend with them.

When times get tough, spend with your neighbors. The multiplier effect will put some of that money right back in your pocket, and remember… what goes around, comes around.

Dave Roberts, SCofC President


  1. Good article Dave. This is an excellent reminder to shop local. Mary Lynn and I still enjoy the Whirlpool washer and dryer we bought from Parisi's a few years ago. The new roof on our house came from Curtis Lumber and was installed by local workers. We bought our Cub Cadet lawn tractor from Saratoga Ag. Don't forget Olde Saratoga Books. That is a great bookstore. We are lucky to have it. You can't forget Olde Saratoga Wines & Spirits either.

    When Northway Johnny's was open, we always bought our meat from Byron's Market. We still do. You can't beat a hamburger made from Byron's Market's meat.

    Please feel free to add me to your mailing list so that I know when you have a new post. Thanks.

    John Tedder
    jtedder (at) teddersrandomnotes(dot)com

  2. How does one go about joining the Schuylerville Chamber? I've sent e-mails through the website numerous times and never received a reply.

  3. Thanks for pointing out our link lack, Mark. We'll get that fixed ASAP, so you can download our membership app from the "Join" page of our website.

    Dotty Robinson