MainStreet Macro: A Walk down Main Street: Buffalo, N.Y.

When was the last time you took a walk down a real Main Street, the commercial hub of any small town or city?

I recently had a chance to do just that with Kai Ryssdal, host of the “Marketplace” broadcast on American Public Media. Kai and I took a tour of Elmwood Avenue, a happening strip of local businesses in central Buffalo.

Why Buffalo? Kai is a New York Giants fan, so it had nothing to do with the Bills’ near-flawless season.

No, we headed to Buffalo because ADP Research Institute data recently showed that wages for lower-paid workers in the city had skyrocketed, jumping 40 percent from 2019 to 2021. Last year, for the first time, low-end salaries grew more rapidly in America’s most affordable cities than anywhere else.

The story is bigger than Buffalo. Away from the public eye and removed from the campaign trail, Main Street businesses in towns and cities across the country are struggling, yes, but many also are living through the pain of inflation. They’re innovating, adapting, and changing up business as usual.

Affordable cities like Buffalo have become powerful lures for workers, who these days can be more choosey about where and when they work. But these lower-cost cities also allow local entrepreneurs the advantage of affordable commercial rents, where they can turn their passions into profitable Main Street enterprises.

That’s what we saw in Buffalo. There, a combination of affordable housing, available commercial space, steady customer demand, local political support, and innovation are clearing a path through the thicket of 40-year high inflation.

Kai and I talked to shop owners along Elmwood Avenue to find out how a Main Street in Anytown, U.S.A., was coping. We learned that small business owners, through hard work and innovation, are weathering the economic headwinds.

Taste of Soul: Help wanted, but not found

One of our first stops was Taste of Soul. Restaurant owner Khilialah Reese, who goes by Ms. Country, started selling her wares on Facebook, expanded to a food trailer, then opened the doors of her small eatery during the depths of the pandemic. 

Prices have since gone up on everything from food to food containers, but Ms. Country has managed by buying local, and customer demand remains strong. At 4 p.m. on a weekday,  her small restaurant was buzzing with delivery drivers and hungry people waiting for their orders.

Ms. Country’s challenge isn’t finding customers, it’s finding workers to serve them. She can’t find a cook for less than $26 an hour. With inflation, the most she can pay is $17.  Staff turnover is high because workers have a lot of options in Buffalo.

So Ms. Country has become a jack-of-all-trades: Business owner, cook, and all-around bootstrapper. It’s the only way she can keep up with the steady flow of customers who wait patiently for their orders.

What would make her business better?

“Oh, my goodness,” she tells us, “A few more employees!”

Put a Plant on It: Cultivating services

Up the street, we visited Put a Plant on It. Owner Johannah Dominguez left a New York City corporate job in 2020 to open a plant shop in Buffalo, something she could never afford to do in Manhattan.

Dominguez has a home-grown solution to pandemic supply chain challenges. With a few snips, soil, and TLC, she literally can grow her own inventory of exotic house plants.

The innovation doesn’t stop there. Dominguez is expanding into services and customer experiences. She recognizes that plants aren’t a necessity, so to keep the business viable during economic downturns, she’ll have to continually reseed her customer base.

Now she’s offering classes and events that have kept people wanting to buy plants, even during hard economic times.

“At the end of the day, plants are a luxury item,” she says. “A lot of people are more willing to spend more money on an experience, and that’s one thing we work hard here to give people.”

Campus Wheel Works: Training the customers

Our final stop was Campus Wheel Works, a bike store that opened in the 1990s. Owner Ethan Johnson said that an initial boom in bike sales during the pandemic was followed by inventory shortages that were a disaster for his business.

Now he has the opposite problem: Too much inventory just in time for the cold Buffalo winter. And big price increases being driven by his suppliers.

Like Dominguez, Johnson’s solution was to turn toward services – in this case bike repair – and make that a bigger part of his business.

But finding skilled bike mechanics, like finding qualified cooks, is challenging in Buffalo. So Johnson and his team now offer training to bike enthusiasts to qualify them to be mechanics. Staff turnover has been low because employees appreciate the opportunity to develop their skills – and they get sweet discounts on wheels.

“I think if it was too easy, I would have lost interest a long time ago,” Johnson says.

My Take

Small businesses like the ones Kai and I visited in Buffalo make up an estimated 44 percent of GDP and supply two-thirds of U.S. jobs, according to the Small Business Administration. 

On Thursday, the Department of Commerce reported that after six months of negative growth the U.S. economy grew at an annualized rate of 2.6 percent in the third quarter.

It was good news, but the numbers behind the headline are less encouraging. U.S. exports surged as inventory shortages eased in the third quarter, giving a boost to economic growth that’s unlikely to be repeated any time soon. In short, the economy still looks sluggish.

But on an avenue in Buffalo, I saw the power of Main Street, where small business owners are playing to win. On the Elmwood strip, they’re steadfastly focused on growth despite the stormy macro headwinds trying to beat them back.

That’s why Main Street is the lifeblood of the U.S. economy. Go Bills!

For more of my interviews with Kai Ryssdal in Buffalo check out “Marketplace” on your local NPR station or go to Marketplace.org for the three-part series starting Monday, October 31 through Wednesday, November 2.