Why buying locally isn't as helpful as you might think.
One of the things that makes me saddest is the ignorance with which people champion "buy local" movements.
There are a lot of factors which go into international trade. And yes, people and their lives are affected by every decision.
But, it is sheer lunacy to believe that if we shifted our buying towards local products only that we wouldn't lose jobs locally.
Sounds counter intuitive. But here are the factors you're missing.
Go into a store and buy a "Made in China" product. Where is that store located? Locally. Who sold you the product? Someone in your community. Who unloaded it from the truck? Someone locally. Who runs the store that makes the profit and pays the employee? Someone local. There may be additional points of contact along the supply chain as well which support local jobs.
So, the first consideration is this; just because the product is made elsewhere, it doesn't mean that it does not support local jobs.
This kind of thinking gets even more dangerous when you not only switch the products you buy, but try to spite certain chains by trying to affect buying patterns to shift consumers to other stores which perhaps stock more local products.
The next two points are around cost. Foreign goods generally become popular because they are cheaper to produce elsewhere. A lot of people seem to think that the increase in cost is justifiable. Which is wonderful. If you can afford it. But, the fact is, many people can't. If you affect enough change to drive out foreign interests, you could make staple foods or supplies too expensive for those that need them most.
The next point is that these items don't always end up being more expensive to the buyer. But, again, no one is going to pay to import something if it costs the same abroad as it does locally, and there is enough supply. This generally means that even when a domestic and foreign product are priced the same that the markup on the domestic product is lower. Which in turn means that while it may help the local producer more, it may actually supply less cash to the rest of the local supply chain. Ultimately resulting in a net negative impact on the local economy.
The two points above around cost basically boil down to this; a supply chain doesn't JUST consist of the producer and the consumer. There are MANY points of contact along the supply chain. And many of those points of contact will be domestic. Lower cost foreign goods allow for more profit margin at the same price which allows the product to support more jobs. Both domestically and abroad.
Another problem a lot of people don't have the foresight to think about is the cost of success. Many of the most successful Canadian businesses end up being bought up by foreign interests. They didn't get bought up because they were smaller businesses. They got bought up because they were successful. Molson's, Hershey's and so on. These giants of industry were once Canadian businesses. Canadian's bought the products in mass quantities. It supported local businesses almost exclusively. But, the success attracted foreign investors. The companies ceased being Canadian. And eventually, parts of the supply chain, including the production were moved elsewhere.
Today, these companies still support a great many Canadian jobs. Certain types of jobs have moved elsewhere. But, a large part of the supply chain still goes on in Canada.
And, those jobs that were lost? Well it is actually safe to presume that many would have been lost anyway. Why? Well, why was manufacturing shut down in Canada in the first place? It was just to spite us. It would have been because it could have been done more efficiently elsewhere. Which would have meant that over time companies like Molson's would have needed to either raise prices which would make competition harder, or become more efficient, which generally means doing the same or more with less resources (AKA employees).
There are a lot of factors which go into international trade. And yes, people and their lives are affected by every decision.
But, it is sheer lunacy to believe that if we shifted our buying towards local products only that we wouldn't lose jobs locally.
Sounds counter intuitive. But here are the factors you're missing.
Go into a store and buy a "Made in China" product. Where is that store located? Locally. Who sold you the product? Someone in your community. Who unloaded it from the truck? Someone locally. Who runs the store that makes the profit and pays the employee? Someone local. There may be additional points of contact along the supply chain as well which support local jobs.
So, the first consideration is this; just because the product is made elsewhere, it doesn't mean that it does not support local jobs.
This kind of thinking gets even more dangerous when you not only switch the products you buy, but try to spite certain chains by trying to affect buying patterns to shift consumers to other stores which perhaps stock more local products.
The next two points are around cost. Foreign goods generally become popular because they are cheaper to produce elsewhere. A lot of people seem to think that the increase in cost is justifiable. Which is wonderful. If you can afford it. But, the fact is, many people can't. If you affect enough change to drive out foreign interests, you could make staple foods or supplies too expensive for those that need them most.
The next point is that these items don't always end up being more expensive to the buyer. But, again, no one is going to pay to import something if it costs the same abroad as it does locally, and there is enough supply. This generally means that even when a domestic and foreign product are priced the same that the markup on the domestic product is lower. Which in turn means that while it may help the local producer more, it may actually supply less cash to the rest of the local supply chain. Ultimately resulting in a net negative impact on the local economy.
The two points above around cost basically boil down to this; a supply chain doesn't JUST consist of the producer and the consumer. There are MANY points of contact along the supply chain. And many of those points of contact will be domestic. Lower cost foreign goods allow for more profit margin at the same price which allows the product to support more jobs. Both domestically and abroad.
Another problem a lot of people don't have the foresight to think about is the cost of success. Many of the most successful Canadian businesses end up being bought up by foreign interests. They didn't get bought up because they were smaller businesses. They got bought up because they were successful. Molson's, Hershey's and so on. These giants of industry were once Canadian businesses. Canadian's bought the products in mass quantities. It supported local businesses almost exclusively. But, the success attracted foreign investors. The companies ceased being Canadian. And eventually, parts of the supply chain, including the production were moved elsewhere.
Today, these companies still support a great many Canadian jobs. Certain types of jobs have moved elsewhere. But, a large part of the supply chain still goes on in Canada.
And, those jobs that were lost? Well it is actually safe to presume that many would have been lost anyway. Why? Well, why was manufacturing shut down in Canada in the first place? It was just to spite us. It would have been because it could have been done more efficiently elsewhere. Which would have meant that over time companies like Molson's would have needed to either raise prices which would make competition harder, or become more efficient, which generally means doing the same or more with less resources (AKA employees).
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