In communities with a strong localized economy, there is less fluctuation and more money flowing from local business to local business. These communities tend to have a higher quality of life, lower crime rates and a friendlier, more neighborly attitude. What makes these towns different? They think local!
Many towns are realizing that local independent businesses return more money to the local economy than the national chain stores. Towns that are able to grow a good amount of their food, and source many of their consumer goods and services through local manufacturing and businesses are much more financially stable in uncertain times. They are also more sustainable and have a lower carbon footprint.
Local businesses are not shipping goods over thousands of miles and paying the higher fuel costs. Also, they tend to bank local, advertise in local papers, purchase local, use local contractors, and pay good wages and benefits to local people. That keeps money bouncing around longer in the local community. Each time that money passes through another pair of local hands, it improves the local economy a little more.
A recent study revealed that $1 earned by a local farmer had the impact of $2 on the farmer’s community because it changed hands so many times locally.
“About 42 percent of our economy is “place based” or created through small, locally owned businesses,” notes economist and author Michael Shuman. He estimates that we could expand this figure to 70 percent or more by localizing some of our main expenditures. In the process, we would boost our local economy and save money at the same time.
Most of our urban areas are surrounded by farms that produce lots of local foods that are shipped thousands of miles away. Ironically, 75 percent of fresh apples eaten in New York City come from Washington State and foreign countries. Meanwhile, a few miles upstate in New York farmers grow 10 times more apples than the Big Apple consumes. If we all started eating closer to home — say, within a 100-mile radius, eating in season and lower on the food chain — we could localize our food system.
The electricity for our houses and businesses most often flows through hundreds of miles of power lines from the source to our home. Imagine if cul-de-sac residents teamed up and purchased a communal wind turbine, or set up solar panels on all the southern-facing garage roofs. We could create a series of small-scale energy providers that could potentially meet their own power needs.
If we relocalized our towns so that residents could walk to the farmer’s market, hardware store, library and post office all in the same area, we wouldn’t have to drive so much. Driving is expensive and environmentally devastating. When you walk or bicycle, you go slower, appreciate the architecture and history, wave to the neighbors, and possibly engage in conversation. This kind of walkable downtown encourages local spending and reinforces community bonds.
If you want to stimulate economic growth in a geographic region, one tried-and-true method is to generate a local currency. It functions like the good old dollar, but is not legal tender; instead, it is more like a local barter. The people who use local currency make a conscious commitment to buy local first.
This article was contributed by Shawn Dell Joyce.