Building up our local businesses

American Falls is at an interesting place in its life. If you talk to some, the economics of American Falls has never been better. If you talk to others, the town is on the verge of collapse.

It’s easy to see why the naysayers of American Falls think it’s headed toward ghost town. Many of the buildings on Idaho Street are empty and many have for rent or for sale signs in their windows. There used to be two grocery stores; now there is one. There used to be three department stores, two large and one small; now we just have the small one.

I’m not an economist, but it seems to me there are some good reasons why some feel the town is failing and why others think it is not. Simply, some of us are doing quite well, and some of us are not. When you have to stretch a dollar, things don’t seem so rosy, but people becoming bitter about the economy because it has left them behind could cause the economy in American Falls to get worse.

The retail economy, the most visible part of the economy in American Falls, is struggling, obviously. As cars, roads, and infrastructure has improved, people started to head to Pocatello for retail outlets. At the same time it became easier to run to Pocatello, the retail outlets there changed their business models to one that required more customers.

It happened this way: products kept getting cheaper and cheaper as overseas trading cut labor costs. To compete with each other, retail outlets slashed prices to attract more customers. Products had a narrower profit margin, but stores could still turn large profits as they could move more stuff. Since the stuff they are selling doesn’t last as long as it used to, they could sell even more stuff pretty easily.

The current business model requires a lot of people. It works good for Walmarts in a big city, but not so much for rural Idaho. In fact, many of those stores in Pocatello need the patronage of American Falls residents, because Pocatello is probably on the verge of being too small for that business model to work.

This is before you throw in the competition that the internet started providing to local businesses. Compared to these other options, it seems like stuff costs more in American Falls. And because we are rural, getting stuff to our town costs more than it does to get it to a hub like Pocatello or Idaho Falls.

The retail situation for American Falls has even more problems. The larger stores in big cities have found ways to manipulate customers into believing that trendy is better. It is entirely possible there are people in American Falls who shop at Ikea. How far away is the closest Ikea? Two hours and 57 minutes. Why doesn’t Ikea open a store in Pocatello? Because people will drive three hours to go there! It makes it seem special. That’s one of the reasons Costco charges a membership fee; you feel like you are special shopping at an exclusive place. The lack of stores in American Falls doesn’t mean that there is no money here, or that the stores here were poorly managed. It means the way we do business in the United States is changing.

And so American Falls residents continue to complain that American Falls does not have the same retail options as a big city, which seems pretty odd if you don’t remember there being many options. But there used to be clothing stores and furniture stores and all sorts of retail here.

You hear questions like, why are there no good hotels? A group of business students at BYU-Idaho did a study on putting a hotel in American Falls and found that a hotel could not make money in the American Falls market. That is why the hotels here have turned into de facto low-income housing, not because the managers of the hotels failed to find a “secret sauce” that would suddenly make them successful in this market.

However, outside of retail, the economy of American Falls is booming. Bloomberg, the financial magazine, recently declared Idaho’s economy the best in the United States. Why? Because savvy farmers have jumped on exporting their goods faster than other places. That article could have been describing American Falls.

As a result, American Falls might have more money flowing through it now then it has ever had. So why are people complaining? Well, as is reflected in a lot of other parts of America right now, some of us are being left behind. Trump supporters will say immigrants have glutted the workforce, and that’s what caused it. Bernie Sanders people will say it’s the rich people hoarding all the money. But I think it’s more complicated still. For the most part, American Falls employers are paying what is acceptable as wages for the local market.

We live in a time of social and technological change. Because of a glut of cheap stuff, I believe it doesn’t cost as much to provide for a family as it used to, with inflation taken into account. And most families have two breadwinners now instead of one. If you fit the right demographic, there is plenty of government help that will keep you going at least on a certain level. All of these things and more play into what employers consider an acceptable wage. It doesn’t help that Idaho is a right to work state where unions are hard to organize, though I recognize that unions come with their own set of problems.

So a few of us just can’t seem to get ahead, no matter how hard we try. That can lead to a lot of frustration when we go to one of the few businesses in town and receive less than stellar service, especially if we feel like we could get better service somewhere else. However, if we immediately take to social media to complain about it, we shoot ourselves in the foot. A piece of bad fruit or a bad pizza might get us riled up over the bad situation we feel like we are in, but if we stop supporting our local businesses, soon the few that are left will be gone.

If we lose our grocery store or department store, or possibly any of our local restaurants, American Falls could become a ghost town fast. That’s enough motivation for me to overlook a problem or two, which happens at all stores, in American Falls or not. I even think that, consider the time and expense it takes to go to Pocatello, as well as the economic impact, shopping locally is not all that much more expensive.

I’m pretty good at pointing out problems, but I wish I had solutions. Some say that we should stop exporting and stop importing, and put America first. We could do the same by putting American Falls first and supporting out local businesses instead of tearing them down.

Thanks for reading!

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