KEEP KANSANS IN BUSINESS Local businesses are the lifeblood of our communities
The Local Multiplier Effect (LME) is a valuable feature of our economy. The term refers to how many times dollars are recirculated within a local economy before leaving. Economist John Maynard Keynes coined the term "Local Multiplier Effect" in his book The General Theory of Employment, Interest and Money.
The concept is simple: Local businesses spend money locally, keeping dollars circulating in a local economy where it can be used to help a community prosper. Out-of-state companies spend few dollars locally, taking money away from a local economy. When money does not recirculate, communities suffer.
Local businesses hire local accountants, janitorial companies, printers, banks, marketing professionals, lawyers, advertise more locally, etc. These local individuals/companies spend their dollars at local businesses, who in turn hire locally, and so on. Every dollar spent in a local business multiplies itself throughout the community and Kansas, strengthening our economic base.
Out of state companies rarely hire local businesses/individuals, as they have corporate offices in other states and, in some cases, outside of the U.S. Dollars spent in those stores leave Kansas and weaken communities.
Over the past 50 years, the expansion of national businesses into local markets has diverted this vital monetary stream and redirected it to centralized corporate coffers. There it is spent on large capital expenditures, overseas goods and, all too frequently, executive salaries.
This interception of funds has depleted local towns and cities across our nation of an important source of funds: recirculated income.
It has been estimated that 50 years ago, thriving communities had an LME in the low 30s. This meant a dollar circulated as many as 30 times in a community! Twenty-five years ago, it is estimated that number was in the low 20s. Today it’s estimated to be as little as 5 times! This reduction in the number of rounds monies make has had an extremely negative effect on our local economy.
All areas of community life are affected by this deficit. This lost treasure of local economies cannot be ignored! Supporting local stores keeps money circulation in communities.
Please click here to contact us or your legislator and express your support of the hard-working local business owners in your community.