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HOOSER: Use COVID cash to help small businesses

Within the next 14 days at least $21 million ($600 per person) and possibly up to $70 million ($2,000 per person) will fall from the sky and into the pockets of local Kaua‘i residents.

How we collectively spend these funds is important, and whenever possible we should support locally-owned businesses, selling locally-produced products and services, that employ local residents.

For many, this money, along with the extended unemployment benefits, is critically important to paying the rent, putting food on the table, or perhaps buying those much-needed new shoes for the keiki. For others the funds are “extra” and will be spent accordingly on extra, non-essential items.

These funds will help those living beneath the very-real economic stress brought about by the pandemic. In addition, the money also serves an important function of stimulating the local economy.

A whole lot of cash is going to be dumped into our economy in a short amount of time, and with just a little bit of thought and effort we could easily double or triple its economic impact.

Please, take care of your family first, and then, if you have the luxury to do so, spend that money to help all Kaua‘i.

If you spend the money to purchase products from Amazon, or electronic fun stuff from a local big-box store, you will benefit personally, but the money will instantly exit the Kaua‘i economy and be gone as quickly as it arrived.

There will be no local economic stimulus whatsoever — none, zip, nada. Personal pleasure, personal satisfaction and personal benefit, perhaps, but no community benefit, and certainly no local economic stimulus.

However, if residents are able to spend that money on local businesses and purchase local products, that money will go into the paychecks of local employees. Those local employees (our friends and neighbors) could then also spend that same money on local businesses and local products, supporting the employment of even more local employees, thus doubling or tripling or more the impact of the initial stimulus.

“If you imagine the local economy as a bucket full of water, every time you spend money that goes outside the local area, it leaks out the bucket,” said the New Economics Foundation.

”Generally, our energy is focused on trying to pour more money into an area so as to keep filling up the bucket. However, a better starting point for strengthening the local economy should be to try to prevent the money leaking out in the first place…A higher proportion of money re-spent in the local economy means a higher multiplier effect because more income is generated for local people,” according to the New Economics Foundation.

Our locally-owned restaurants and local farmers especially need our help at the moment and, if possible, this is where the lion’s share of those funds should be spent.

$100 spent at a local farmers’ market or directly from a local farmer is $100 that stays on Kaua‘i and in the pockets of hardworking, local farmers. That same $100 spent at a big-box store or fast-food chain is to a great extent exported off-island to pay for the imported food, transportation, administrative overhead and profits of that offshore corporation.

Similarly, spending that money at a locally-owned restaurant that serves local beef, fish and greens is an investment in our community and in our local economy.

And, not to worry, the jobs created by the big-box stores and their fast-food counterparts will not be going away if we choose to spend our COVID money at locally-owned businesses, buying local products and services. While the news has been full of stories about the hardship and closing of locally-owned businesses and restaurants, I have yet to see the same for fast-food chains or national retailers.

According to the U.S. census, approximately 70,000 people call Kaua‘i home, and the median income is approximately $70,000. Consequently, approximately 50% of Kaua‘i will qualify for the stimulus payment. Translation: Depending on the final outcome of the discussions now occurring in the U.S. Senate, between $21 million (@$600 per person) and $70 million (@$2,000 per person) will arrive here on our little island within the next 10 days.

The priorities of paying for housing and the core expenses of supporting our families must, of course, come first. But for those who have a little extra, let’s do what we can to support our small businesses and launch our 2021 local economy with a bang. Spend your COVID money if at all possible at locally-owned businesses, selling locally-grown food, locally produced products, and locally provided services. And yes, when eating out ask specifically for “local-grown options,” and, of course, tip your server generously as well. 🙂

Happy New Year to all!


Gary Hooser is the former vice-chair of the Democratic Party of Hawai‘i, and served eight years in the state Senate, where he was majority leader. He also served for eight years on the Kaua‘i County Council, and was former director of the state Office of Environmental Quality Control. He serves presently in a volunteer capacity as board president of the Hawai‘i Alliance for Progressive Action and is executive director of the Pono Hawai‘i Initiative.
Source: The Garden Island

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