Local Economy: The Path to Resilience

Bloomberg Businessweek has a story this week about the growing “buy local” movement. The article states that there are now 130 cities or regions that have “buy local” groups, up from 41 just 3 years ago. A lot of this is feel good stuff about supporting our friends and neighbors, as well as backlash against crap made in China and a growing resentment against the devastation that chain stores have wrought in our communities.

 

But to me the key point of the article is that buying local is actually the strongest economic development tool that we have these days. I know you all know this but it bears repeating:

  • locally owned stores spend proportionately more on payroll than chains – better for humans
  • for every $100 spent at a locally owned store, $45 remains in the local economy, compared with about $13 per $100 spent at a big box – that’s 3.5 TIMES more – I’m not a business person, but isn’t this better for us as a city? That money will get recirculated again and again rather than disappearing to Bentoville or whever…

The article offers a case study example: 

“…in 2007 booksellers in San Francisco asked Civic Economics to calculate what would happen if Bay Area consumers shifted 10% of their spending from chains. The forecast: $192 million in increased economic activity for the region and almost 1,300 new jobs. ‘If any single business promised that, the governor would be downtown handing out checks,’ says Dan Houston, co-founder of Civic Economics.” 

In Lexington our city government – the thing that provides all the services we enjoy – is enormously dependent on local income taxes. Wouldn’t it make sense to promote local as a way to grow jobs? Wouldn’t it make sense to make local the central element of every single thing we do? Yet what are our nominal “leaders” doing to truly build a local economy here? Not much. Like members of a cargo cult, they are looking to the skies for the plane loaded with goodies to arrive from heaven, or somewhere. 

Meanwhile, the real leaders in our community are just doing it. Thankfully, the folks who created and support LocalFirstLexington are leading the way.http://www.localfirstlexington.com/ - visit their site and support our local businesses!  

I’m sure you’ve heard of these local economy ideas: 

You may not have heard of these:  

  •  Utah Local First, with 2,500 members, gets funding from both Salt Lake City and the county.
  • Grand Rapids Local First helped persuade its town to give a 1% bid preference to local businesses

Again, does our government do this here? 

Building a local economy is a huge part to adaptation and resilience in the face of what is coming (see post below, for example). “If there had been no oil crisis and no financial crisis,” says Michael Shuman, director of research and economic development for the nonprofit Business Alliance for Local Living Economies, “we’d be whistling in the wind.” I take this to mean that building a local economy is the ONLY way for communities to face realities. 

http://www.businessweek.com/magazine/content/10_09/b4168057813351.htm

1 Comment

Filed under Economy

One response to “Local Economy: The Path to Resilience

  1. Credit unions are all about the community and giving back to their member owners. They are owned by the people and for the people… not just an elite few shareholders.

    There is a great video contest in the voting stages right now to complement the Move Your Money campaign and show the power of credit unions and people helping people: http://www.youngfreehq.com/blog/music-video-contest-entry-8-james-robert-lay.html

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