Today, we share number three in our top five posts countdown, one of our executive director's essays.
Brian Depew writes about economic development in rural communities, taking a look at discount retailer Dollar General. He suggests strategies to protect communities from corporate interests and to keep local ownership of small businesses, farms, and ranches making communities stronger. This was posted in May.
Dollar General has become a ubiquitous feature of America’s small towns. The discount retailer is opening new stores at a rate of 1,000 a year. There are now more than 16,000 spread across the country, including two in the county where I live. The unmistakable concrete walls, steel roof, and bright yellow sign are now commonplace on the outskirts of small towns and stand out like palmer amaranth in a soybean field.
Many local economic developers see the discount retailer as a threat to local retail. Dollar General added limited groceries in 2003, posing a unique threat to local grocery stores, which often operate on tight margins.
Other economic developers argue Dollar General creates jobs and helps keep shoppers in town. I get it. In thousands of miles spent traversing the rural Midwest, I have found myself in small towns with no other retail or grocery options.
The irony is that this solution makes the situation worse with low-wage jobs, loss of local ownership, and loss of local tax revenue when other businesses close or fail to open because they cannot, or don’t want to, compete with a corporate behemoth.
We must grow and nurture the communities we want to live in. Local ownership of small businesses, farms, and ranches makes communities stronger. Local owners care about their towns, neighbors, and customers.
When you shop at the local hardware store, the profit stays in town and builds the local economy. At Dollar General, every dollar of profit goes to Wall Street. The company reported $27.8 billion in sales in 2019, and its stock climbed 700% in 10 years.
Protecting our communities from these corporate interests is difficult, but here are a few strategies to consider.
End the common practice of awarding tax and development incentives to massive corporations. Dollar General is a highly profitable company. Subsidizing new stores is a cash transfer from local taxpayers to corporate shareholders.
Use local zoning codes to encourage good growth and discourage harmful businesses. A report available from the Institute for Local Self Reliance outlines zoning strategies to limit construction of box outlets like Dollar General.
Raise the minimum wage. The stagnant minimum wage is a subsidy we allow Dollar General to collect from the working poor. An increase will improve the lives of low-wage workers, and make Dollar General foot more of the real cost of labor.
Support local retail options when you can. We can each choose, when possible, to spend our retail dollars at stores that keep profit and ownership closer to home.
Write and call lawmakers to ask for stronger antitrust protections. While I am highlighting the case of Dollar General here, the same can be said about Walmart and now Amazon, too. Elsewhere in the rural economy multinational meatpackers, seed companies, and input suppliers have hammered local business.
In the Dollar General model, large corporations and their shareholders get rich while workers and communities suffer. There is an alternative. We must work together to create it.
