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From the time I was quite young, my father, who was a smalltown
businessman for more than 50 years, maintained that folks should
support their local communities by buying as many items locally as they
could. The following think piece, authored by Matt Entenza, Minnesota
2020 Board Chairman, and Lee Egerstrom, Minnesota 2020 Fellow, really
hits the nail on the head. It’s also quite timely as Uncle Sam is about
to send out our economic stimulus checks.
*****
Minnesota is in a recession. Our state’s families and small
businesses are hurting. Many rural communities have been hit
particularly hard. As everyone knows by now, most Americans will
be receiving tax rebate checks in May. Whether the check is in
the $300, $600 or $1,200 range, we should try and use it where it can
do the most good during this recession.
That place is right here in Minnesota.
The benefit to the economy of buying local is significant. The
Andersonville Study of Retail Economics, prepared by Civic Economics in
October 2004 and using Minnesota Department of Revenue gross retail
sales for 2003, showed that 68 cents of the retail dollar spent at
locally-owned retail shops stay in the local economy. In contrast, only
43 cents of the dollar spent at national and multinational chains stay
in Minnesota.
In practical terms, buy your lawn mower from the local hardware store,
your meat from the local butcher and your produce from local growers.
Yes, we live in a global economy but the tax rebate is meant to
stimulate our economy – not the Chinese economy. The rebate money does
its best intended work when we spend it closest to home.
Minnesota producers and retailers will benefit greatly, and so will the
overall Minnesota economy, if a good portion of that returned tax flow
is pumped into the local economy. While it’s understandable some
people won’t be able to spend their rebates on “Made in Minnesota”
goods, even a small portion of that rebate cash can help our economy.
It’s amazing what products you can find that are made in our state.
From boots made in Red Wing, wallets made in Worthington, chocolate
from Willmar, to candles and wild rice the list goes on and on;
Minnesota’s inventiveness is always close at hand.
How much the $161 billion federal tax rebate plan may help the
faltering U.S. and Minnesota economies is an open question. The money
will need to be returned to citizens and spent this spring before any
measuring can be done, and then it will be either praised or condemned
depending on how the economy responds to it and other forces.
Leveraging that extra 25 cents on the dollar can have a tremendous
impact on Minnesota’s economy. Local merchants selling locally
manufactured goods amplify the result. Whether you are low, medium or
high income household, you do more for your community and our state by
spending your economic stimulus check at home.
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