Importance of Buying Local
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The Importance of a BUY LOCAL FIRST! Campaign
Money Spent Local, Stays Local
Several studies have shown that money spent at a locally owned business stays in the local economy and continues to strengthen the economic base of the community. A 2002 case study in Austin, Texas showed that for every $100 in consumer spending at a national bookstore in Austin, Texas the local economic impact was only $13. The same amount spent at locally based bookstores yielded $45, or more than three times the local economic impact. (Civic Economics, Austin Unchained October 2003)
A 2003 case study of Midcoast Maine covering several lines of goods and services validated these findings. In Maine eight locally owned businesses were surveyed. The survey found that the businesses spent 44.6 percent of their revenue within the surrounding two counties. Another 8.7 percent was spent elsewhere in the state of Maine. The four largest components of this local spending were: wages and benefits paid to local employees; goods and services purchased from other local businesses; profits that accrued to local owners and taxes paid to local and state government. All eight businesses banked locally, used local accountants, advertised in local businesses publications, purchased inventory from local manufacturers, and used local Internet service providers and repair people. The study estimated that a big box retailer returns just 14.1 percent of its revenue to the local economy, mostly in the form of payroll. The rest leaves the state, flowing to out-of-state suppliers and back to corporate headquarters. (The Economic Impact of Locally Owned Business vs. Chains: A Case Study in Midcoast Maine - New Rules Project, September 2003.)
Local Owners are Local Contributors
There are other benefits to buying local as well. Research has shown that small local businesses make indispensable contributions to communities and neighborhoods. A study of businesses in Oregon, detailing charitable giving showed that when in-kind contributions were included, small firms gave an average of $789 per employee, medium sized firms $172, and large firms $334. (NFIB Small Business Policy Guide) Additionally, large firms contribute primarily to the area where the corporation is headquartered, not necessarily where they do business.
Local Businesses Offer Stable Employment
Small businesses account for the largest share of net new jobs generated each year, and locally based business provide some of the most stable employment opportunities in a community. For all their economic power, the number of jobs provided by global corporations relative to the world's workforce is small. The 200 largest corporations in the world employ less than 1 percent of the global workforce although they account for about 30 percent of global economic activity. Between 1983 and 1999 the number of people they employ grew by 14 percent while their profits grew over 360 percent. Most job growth comes from local independent businesses. (Korten)
Lower Environmental Impact
In addition to building a strong economic base, supporting the local community and creating new jobs, small businesses, which are more often located in central business districts, have less impact on local ecosystems compared to larger retailers located in strip malls or stand-alone buildings. To accommodate large retail development, roads and parking lots must be built which results in a greater reliance on cars and an increase in auto emissions. As big box stores and chain retailers consume more and more undeveloped land, polluted runoff from their parking lots is placing an ever-greater burden on the nation's rivers, lakes, and coastal waters. One way to preserve a community's land and natural resources is to channel retail activity back into downtowns and neighborhood shops. Multistory buildings reduce the footprint of buildings. Higher densities and greater access for pedestrians and public transit mean significantly less land devoted to roads and parking lots. (New Rules Project, Home Town Advantage Bulletin, September 2003)
Tax Revenue Goes Further
Local businesses in town centers also require comparatively little infrastructure investment and make more efficient use of public services. The taxes paid by large retailers often do not cover the increase in public services that are required and the difference can be dramatic, according to a recent study in Barnstable, Massachusetts, a city of 48,000 people. The study, conducted by Tischler & Associates, compared public revenue and costs for various land uses. It found that the city's small, downtown stores generate a net annual surplus (tax revenue minus costs) of $326 per 1,000 square feet. Big-box stores, strip shopping centers, and fast-food outlets, however, require more in services than they produce in revenue. A big-box store creates an annual tax deficit of $468 per 1,000 square feet. (Stacy Mitchell, Main Street News, Feb 2004)
Maintain Uniqueness
Additionally, an economy of diverse, unique businesses promoted by locally owned business attracts today's skilled workers and investors who can choose to settle and grow businesses anywhere. In his research, Richard Florida, author of The Rise of the Creative Class, shows that today's creative workers are choosing to settle in places that preserve their distinctive character. And, Richard Moe, president of the National Historic Preservation Trust says these one-of-a-kind communities attract tourists as well. What tourists want is the sense of being Someplace, not Just Anyplace. They aren't interested in visiting communities that have transformed themselves into a sad hodge-podge of cookie-cutter housing tracts, cluttered commercial strips and bleak downtowns.
Adapted from an article by Michelle and Derek Long, www.sustainableconnections.org
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