Making a Small City Smaller: Small Business Saturday
How small businesses make a big impact on small city economies
This year, Small Business Saturday will be very important to our local economy in Erie. As damaging tariffs drive up domestic prices and the looming cessation of SNAP benefits reduces the purchasing power of everyday people, it has almost become our duty to our neighbors to ensure as much of our money remains within the local economy as possible. Luckily, data shows this can easily be done. Approximately 67 to 68 cents of every dollar spent at a small business stays within our local community. This money is recirculated through local wages, purchases from other local suppliers, and the owner's reinvestment, creating a significant positive ripple effect in the local economy.
It starts with direct spending, which is the initial purchase of a good or service from a locally owned small business. When you spend money at a small business, a large portion stays local through wages and other local operating costs. Next comes a round of indirect spending, which is the money spent by the small business itself on local suppliers that creates a secondary round of spending within the community. This multiplier effect means that for every dollar spent at a small business, an additional amount is generated in local economic activity. That boost in the local economic ecosystem means our neighbors see the benefit more quickly and more impactfully.
By comparison, studies show that for every dollar spent at a large chain store, only about 43 cents remains in the local community. The remaining percentage of each dollar that is left on the table when buying from a large corporation may be spent on any number of things. In the case of Walmart, it might be spent on their political action committee, Walmart Inc PAC, which favored conservative candidates in the 2023-24 election cycle. In Target's case, that amount may go toward funding vehemently anti-LGBTQIA+ political candidates like 2010 Minnesota gubernatorial candidate Tom Emmer, who is now the Majority Whip of the United States House of Representatives. Emmer received $150,000 in support from Target Corp. That portion of your dollar may be used to empower large corporations to fight environmental regulations and continue to ravage our natural resources, lobby for favorable tax cuts for the super-rich, and generally perpetuate the downward spiral toward the economic ruin of the working class in favor of the ultra-wealthy, widening the wealth gap in an already historically inequitable American economy. The point is: it is much easier to know where your money is going if you choose to support local businesses.
We take Small Business Saturday pretty seriously in Downtown Erie each year with an event focused on driving foot traffic to the urban core to support our brick-and-mortar shops and local craft vendors and micro-businesses through our Miracle on State Street event with Copper Carriage, the Dollhouse at Pointe Foure, and Glass Growers Gallery. This year's event is on Saturday, Nov. 29 from 10 a.m. to 4 p.m. with vendors in the historic Boston Store Lobby, Erie Art Museum, and 1020 Collective plus dozens of brick-and-mortar shops open throughout Downtown Erie with specials, sales, and promotions. Last year, we saw how important this single weekend can be for local businesses when not one, but two major holiday shopping weekends were wiped off the calendar due to the snow emergency. Many locals probably opted for online shopping out of convenience and tons of local Erie shops lost an enormous amount of expected holiday revenue. This affected many shops' business decisions heading into the new year like reducing employees' hours, decreasing stock orders, and cutting back on charitable giving. The multiplier effect can therefore also go in the opposite direction, having wide-ranging negative consequences for many others within the sphere of these businesses.
While Small Business Saturday is a nice reminder to shop local as a fun holiday outing, I encourage you to keep the shop local spirit throughout the season. If we are cursed with another snowpocalypse, make an extra effort to patronize local businesses online. Shop early, shop late, ask friends to shop with you, and build community through your local support. We often bemoan the commercialization of the Christian Winter Holiday, but community can also be built through shopping if we make careful decisions. If social norms and societal expectations force you to embrace a season of capitalist excess, make sure that abundance flows to your neighbors. As you plan your holiday spending this year, consider supporting locally owned shops in Erie and keeping more of your dollar within our community. The decision to support local is also a decision to make sure we can all survive whatever is thrown our direction next.
David Tamulonis is a musician and educator who works at Erie Downtown Partnership managing community events and activities in Downtown Erie. He can be reached at davidtamulonis@gmail.com.
