A small example of micro-economics

One World Merchants Logo

One World Merchanst

Just up the street, business neighbor One World Merchants, was vandalized. Broken plate-glass windows, smashed glass display cases and a foiled attempt of robbing silver jewelry. As a Main Street retail store in Vancouver, WA, I’m pretty sure there isn’t a lot of excess cash and the owners are directly affected.

The good news is that Vancouver, WA, at least on the west side, has a strong community identity. So, hours after being notified of the vandalism, local community members had established a date for a ‘cash-mob’ at the store, neighboring business owners had descended on the store to aid in the clean-up, the local police had started forensics while the owners drove to the store, and others had initiated other acts of thoughtfulness for the store-owners.

Pussy Willow buds

Pussy Willow buds

What’s this got to do with a lesson in micro-economics? I’m glad I asked. Small stores depend every day on every single purchase. Every cost figures in; not just our business bottom line, but our personal financials as well. For some of us, our employees, if we have any, are making more than we are. So, when you buy local, you are having a real and immediate impact on your neighbor’s wealth and you are affecting the overall wealth of your physical community as well.

So, every business (okay, so maybe I should say: every small business) in Vancouver, WA pays certain taxes such as the Business and Opportunity Tax (B&O), litter tax, Use Tax, and at the state or county level, the various license fees. There’s more for permits and whatnot, but you get the point. All these small amounts add up and pay for government and infrastructure for roads, utilities, and other services.

From there, working back down the money flow, some of the taxes we pay are based on gross sales – so the more we make the more we pay to our local government. Our local government, I will call your attention to, that is responsible for the management of the infrastructure that provides water and sewer services (give that some thought – it’s more than magic to get water to come from the tap when you want it). Electricity is paid partly by usage, as is gas, but the government oversight is all tax.

Getting to the micro-economic lesson: Yesterday Sam trimmed trees and collected the budding pussy-willow branches in small bundles (of newspaper – re-use in action) and brought them to my store. I’ll pay Sam for the pussy-willow bundles I sell. That affects my gross-sales, so I’ll pay some portion of that sales to taxes. I have helpers in the store that I pay – so some portion of the product Sam brought us will be paying that payroll. My employees live locally, so some portion of the pay from the the sale of Sam’s product will continue to live in the ripple effect of their spending and taxes. Some of the people who purchased pussy-willows today are going to give them as gifts to Liz & Dave at One World Merchants. That’s sweet. Sam is going to take some of the money from the sale of the pussy willows to shop at One World Merchant, which will enter our local economy again by feeding payrolls, taxes, and local store owners bottom line.

Meanwhile, some of that money I made from selling Sam’s pussy willows is going to go up the street with me and my employees when we shop at One World Merchant on the cash-mob day. The money they receive will be going to a local glass repair & replacement company, into the whole hopper of local and state taxes (B&O, payroll, etc.) and feed our community.

You can see, when anyone in this money-chain heads over to a big-box store, they take that money out of our little micro-climate. Away from community.

I recognize our modern lifestyles are possible because of global trade and some things are because of ‘big business’, but whenever you can, please, shop local first. Every single purchase you make from a local vendor matters to the store, to the local community, to your own comfort because of roads, schools, safety services, and so on.

You can help One World Merchants by joining the cash mobMarch 8, or any time, by shopping Main Street.

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