SHOP LOCAL IN CASA GRANDE: THE MULTIPLIER EFFECT

I want to thank Mayor Jackson and current and past City Council members for their vision, direction and dedication to our city!  They did an amazing job guiding the City of Casa Grande through some difficult times.  THANK YOU!

Previously I have talked about ‘The Plan.’ I thought that over the next several months we should expand on the plan, which is our road map for success and growth for Casa Grande.  But before we can expand on the plan, we need to have a discussion regarding how money flows through a community — how where we spend our $1 can impact our overall community.  It’s an economic term called the “Multiplier Effect.”

Here is the definition from Wikipedia.org: “The local multiplier effect (sometimes called the local premium) refers to the additional economic benefit accrued to an area from money being spent in the local economy.”

It continues, “One perspective of the local multiplier effect focuses on the greater local economic return generated by money spent at locally-owned independent businesses compared to corporate chains or other absentee-owned businesses.  Localization advocates cite the multiplier effect as one reason, of many, for consumers to do more of their business locally.”

The common thought is that for every $1 spent in local businesses, it will circulate/be spent eight times.  It is also commonly felt that if the $1 is spent online, it’s only $1 with no multiplier effect.  The same can be said if that $1 is spent in a national chain, except the multiplier effect is one to two times, so that $1 might be $2 (more than online because it does generate local sales tax).

Let’s take the effect of something like Lucid Motors, which announced that they will be building their Electric Car manufacturing plant here.  Just on the surface, 2,000 jobs with an average salary of $50,000 is a payroll of $100,000,000.  Using the multiplier effect, if that payroll is spent only online, it is still $100,000,000 (a big number).  Now use the local “Multiplier Effect” and it is spent in local businesses multiplied by eight times, so that would be $800,000,000.  What effect would that have on our Casa Grande economy and community? Much more!

I’m not suggesting that everyone stop buying online or going up to Phoenix to make your purchases. I am suggesting that you think next time,  “Can I buy what I need here in Casa Grande? Can I go to dinner here in Casa Grande, and can I buy what I need from a local businesses?” Think about it — $1 versus $8 — $100,000,000 versus $800,000,000?

“These are INVESTMENTS in our community, in local businesses, in things to do, investments for our children, our young people, our veterans, our homeless, our seniors and ourselves; let’s work together to make it happen!” 

Craig H. McFarland, City of Casa Grande Mayor

For more articles like this, be sure to check out the entire “Casa Grande: A Growing Horizon” special section in the Fall 2017 Golden Corridor LIVING Magazine!