Today is Black Friday, the day after Thanksgiving when retailers finally get their balance sheets out of the red and into the black. As the years have gone by, the big-box retailers have pushed the envelope further and further, and the crass commercialization of Christmas has become harder and harder to stomach. Last year and especially 2008 were hard on businesses because people were losing jobs, money was tight, and everyone was scared to spend money. This did not help the economy improve. Things, however look better this year.
According to Bloomberg, consumer AND business spending
rose in October. This is good, because job creation requires people and businesses to buy products and services. Increased spending means increased demand which means increased job opportunities. In turn, when those people are hired, they spend, and the cycle keeps moving towards a stronger economy and lower unemployment.
Record quarterly corporate profits are also a sign the economy is improving, although the money doesn't seemt to be "trickling down" in the form of higher pay for the average worker or new jobs. Why? Because all those profits are staying at the top of the executive ladder, and being realized by those with the means to invest in the stock market. That makes taking part in the profit party increasingly difficult for the average person in the middle class.
But there are some bright spots for middle-income America.
Small business growth is improving as well, which means that small business owners are making money, and that means jobs. Small businesses also have another advantage over large corporations - their profits stay in the community (or state), where they contribute to the local economy. Check out this chart
here. It shows that $73 of every $100 spent at a local business stays in the community, while only $43 of every $100 stays when spent on a non-local alternative (ie: big box stores).
So what should the consumer do? In response to Black Friday, there is a movement (supported - oddly - by American Express) to get consumers to embrace
Small Business Saturday. Instead of sending your spending dollars to a corporate office in another state, buy products from locally owned businesses. It will help your neighbor, and it's a lot less stressful than dealing with the thundering herds at Wal-Mart. You may end up spending more money (or having to buy less), but you'll feel better about it, knowing that it will make your town a better place to live. At least you don't have to get to the store at 3:00 AM to make sure you get one of the 10 teaser items advertised before they run out 5 minutes after opening.
Of course - you can extend this idea to year-round. Buy vegetables from local farmers at a farmer's market (or ask your grocer if they buy locally). Go to a local hardware store instead of Home Depot (I LOVE ours). Eat at a Mom & Pop restaurant instead of Olive Garden. Bank at a credit union. Shop for clothes at consignment shops, or other boutiques. Sure there are times when it's just not possible, but trying to support local businesses is always the right thing to do when you can do it.
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