Diminishing Consumer Power and the Future of Small Business

by Eric Goldschein

Consumers vote with their dollar. When they go out and spend money at one store over another, they are wielding immense power, helping to decide the fate of small business and big business, too. But unlike a vote, the power of the dollar is variable. And over the last few years, consumers have seen their dollar falter, often forcing them to make choices that favor big corporations over small businesses.

As wages continue to stagnate and purchasing power diminishes, everyday people—whether they’re making minimum wage or six figures—have less of a reason to shop small than to shop smart, even if their heart wishes otherwise. This is part of the reason that small businesses are slowly disappearing and are being replaced by big businesses—or, occasionally, big businesses masquerading as small ones.

Wages ain’t what they used to be

No doubt you’ve heard this phrase before, but it’s true: Wages in America have flatlined. The federal minimum wage has been stuck at $7.25 an hour since 2009, having only made minimal gains before that. Adjusted for inflation, the minimum wage actually peaked in 1968. We were getting more bang for our minimum wage buck almost 40 years ago.

It’s true that in many states and the District of Columbia, the minimum wage is higher: $11.50 in D.C., $10.50 in California, $9.70 in New York and…

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