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Would #BoycottBlackFriday help Ferguson, or Wal-Mart?

Dan Weissmann Nov 26, 2014
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Would #BoycottBlackFriday help Ferguson, or Wal-Mart?

Dan Weissmann Nov 26, 2014
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After the Ferguson, Missouri, grand jury decided not to indict a white cop for shooting a black teenager, an idea for economic protest started circulating on Twitter: #BoycottBlackFriday. If lots of consumers decide to sit out what’s traditionally the biggest shopping day of the year, what might the economic impacts be? It depends. 

A Black Friday boycott could hurt low-income consumers more than anyone. Surveys show this group represents a disproportionate number of Black Friday shoppers, looking for deals.

“If people boycott these sales, I think it’s probably good for the retailers,” says Georgetown University economist Kurt Carlson, who runs a survey of how shoppers plan their Thanksgiving-weekend shopping.

Assuming those shoppers don’t toss out their shopping lists, retailers could just sell the same stuff later, at higher prices. 

“No big deal,” he says. “Unless people say, ‘I am not spending this holiday season.'”

And that is something they might do if they pay attention to another protest suggestion circulating on social media: Donate to Ferguson’s Public Library.

To run the numbers on that scenario, I talked with Rob Sentz from Economic Modeling Specialists, a company that looks at how dollars spent in different sectors benefit a local economy; the “ripple effect.”

At first, he doubted the library would compare favorably to Wal-Mart. “I’m sure the retail ‘ripple effect’ is higher, from a sales and jobs perspective,” he said.

But he humored me, and l0oked up a key number called a “multiplier” — how much of the money spent on a given enterprise stays local.

First, he looked at the multiplier for big-box retail in the St. Louis area.

Then he looked at local government, like the library. The number popped: “Whoops!” he said. “There, you got a higher multiplier. So, all the money’s going to stay in the region.”

He also looked at how much workers got paid, and how many jobs got created. Advantage: Ferguson library.  

“You’ve got a decent argument that it does have a better local impact,” he said.

WalMart multipliers

Data from Economic Modeling Specialists shows the “multiplier” effects of dollars spent at super-center stores like Wal-Mart.

EMSI multipliers for local governments

EMSI data show higher mulitpliers for local government spending.

 

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