Joined: Mar 2009
Posts: 5038
It's not an either/or proposal. Both local businesses and big retailers provide necessary employment in the community. What the difference is, however, is in the type and number of jobs provided, as well as real estate implications.
Let's say, for example, that Big Box A, a general retailer, has 10,000 transactions a week, and employs 150 local people. We'll assume there's a mix of full and part time, at a ratio of about 50% full time (let's be generous). Now, keep in mind, that's 150 people TOTAL, including stockers, cleaners, management, office staff, and front-line workers like cashiers.
Now, there are currently no "locally owned and operated" general retailer in this city that can service 5000 people a week. So, instead of a single Big Box retailer, you might have 10 small retailers, that can each service 1000 people a week, which works out to be about an average 142 transactions a day (about 12 transactions a hour), assuming they're open Sundays. I've worked small retail, and that would be phenomenal if there were 140+ transactions a day for a lot of these businesses.
Now let's also assume, because there's no Big Box retailer, than the Small Retailers are open 9 to 9, or 12 hours a day, 6 days a week (and only 6 hours on Sunday). That's 78 hours they are open a week. Most places with that many transactions will have at least 2 (if for no other reason other than safety), if not 3 front-line staff on duty during peak hours. For simplicity, let's estimate at 2 staff all the time, which means there's 156 man-hours that need staffing during a week. To cover those 156 open hours, you would need at least 4 staff (which gives them 39/hours a week, or full-time hours, something Big Box doesn't do).
Now, this is only an estimate. Many people work part-time hours, students for example. So let's assume that only 2 of those positions are full-time (39 hours), and the other 2 positions are divided to make part-time hours of about 19 hours each. So now, we have a total of 6 staff working front line positions (2 full time + 4 part time).
But wait. Who's stocking? Is business sufficiently slow that the front-line staff can stock as they go during the day? Maybe. Certainly when it's slow, you can have one on till and one stocking, but not during busy times when stocking might be more critical. Maybe you do the stocking mostly at night. If it's a food retailer, there will be stocking needing to be done during the day. If nothing else, you need someone loading and unloading stock as it arrives so it can move to the floor. Let's assume there's 2 stockers/merchandisers that work full-time or close to full-time, to keep things humming in the back and moving to the front. They won't always need to be there, and sometimes you might need both, but it works out you have 2 full-time guys doing that. Keeping in the 50% is part time, that means 1 full time person but 2 part timers, so a total of 3 staff.
Cleaning. Who cleans? In small businesses, often general cleaning happens during slow times, but usually there's someone who will come after hours and do a deep cleaning, floors, etc. Do you hire a dedicated person to do this several times a week, or hire out? If you keep it in-house, it's probably only 1 person anyway. You could also hire a local contractor.
So, so far we've employed 10 people without even breaking a sweat. But we're not done yet!!
Management: You might run the store yourself, but in all likelyhood you'll hire a manager if you're sufficiently busy. One position full-time, maybe 1 or 2 part-timers. So now our theoretical business might be up to 13 people just under your pay umbrella.
But city by-law says that the sidewalk in front of the business must be cleared, and you don't have enough staff to be shoveling. Contract out to a local business.
You need payroll, so you either hire an accountant/bookkeeper or just hire out a payroll company. The payroll is done locally, because now there's enough local businesses to merit having a local company doing payroll instead of shipping it to corporate, possibly in Winnipeg, Toronto or the US somewhere.
You need IT infrastructure and servicing, and maybe a website. You hire local people instead of relying on corporate.
Maybe you need a local warehouse instead of getting everything shipped from Winnipeg from a central warehouse, like the Big Box people do. So a local warehouse sets up, servicing a few similar businesses. Those jobs are here instead of Winnipeg or somewhere else. There's also local guys employed to drive the delivery trucks.
So you see how that works? Not only do local businesses have the potential to directly employ the same number of people, the economic activity they generate locally instead of shipping it off to corporate or Winnipeg or wherever generates more higher-end employment and, in turn, supports more small businesses, which generates more employment, etc.
The example of the internet service provider - yes both the Local Guy and The Others have local staff for installs and infrastructure, but if you call the help desk, where does it pick up? Winnipeg or Brandon? Where are the parts getting warehoused? Here or somewhere else? Ultimately, where are the profits distributed? Here or shareholders?
In terms of real estate, you could have a single mega-entity taking up a huge parcel of land, or many smaller entities infilling in different places around the city. Also, buildings need to be maintained and managed. Which one will generate more spin-off employment?
There's a lot to think about in these types of discussions.