Monday, October 31, 2011

Why Buy Local?

No doubt you have seen the above image around town: stickers on bicycles, in store front windows and in local publications. Buy local first. But why? Why should we buy local?

If you go on the Local First Utah webpage you can read multiple case studies about the effects that buying local has on our community. I did just that and learned a lot of interesting information about why buying local is such a smart move and how buying at big chain stores can damage communities.

When You Buy Local, More of Your Money Stays In the Community

Let's start with the economy of it all. When you buy local, more of your money stays in the community.  Why? Big corporations come to communities with their businesses already set up. They are typically clones of existing stores. Local companies are more likely to spend money making their businesses work through other local businesses.  Local businesses hire local architects, designers, cabinet makers, sign makers, contractors, insurance brokers, computer consultants, attorneys, advertising agencies, accountants, etc. You money isn't just supporting the local business you are shopping at, but supporting all the little cogs that make that business work. Local businesses do not have staff headquartered in some far off metropolis. Their headquarters are here, so your money stays here.

Below is a chart from a study done in West Michigan in 2008 which tracked the dollars spent at locally and non-locally owned businesses. They found that for every $100 spent at local owned businesses $73 of it stays in the community, whereas $100 spent at a non-local business only retains $43 dollars in the community. These studies have been done in many communities and the numbers vary from town to town, but in every single study the money stayed in the community in much larger quantities when spent at locally owned companies.

Big Chains Cost Taxpayers More

Studies also prove that when big chain stores enter a community they actually cost more in taxpayer dollars (for safety and services, such as road maintenance) than they end up returning to the community. A study done in Ohio found that the retail development of large chain stores created a drain on municipal budgets by requiring more public services than generating in tax revenue. On average, retail buildings produce a net annual loss to communities of $0.44 a square foot.

Myth: Big Businesses Create More Jobs

When big corporate businesses come to town they often boast that they will create X number of jobs. Many studies have been done to prove that while jobs are created in the beginning, large corporate stores usually take away jobs from the community.

How is this possible?

When big stores come to town many locally owned smaller businesses are forced to close their doors. Big corporations not only take workers away from local stores, but provide positions that actually pay less and provide less benefits. Specifically Walmart. Walmart employees earn 12.4% less than the average retail worker. Walmart's arrival leads to a decline of approximately 20 local wholesale jobs in the first five years and an additional 10 wholesale jobs over the long run. In a study by Iowa State University, it was found that 84% of new Walmarts' sales simply sifted money away from local merchants. Within five years of the arrival of a Walmart, counties lost on average four small retail businesses, one mid-size store and one large store. Both municipal finance and quality of life suffer when a city loses its base of small retail establishments.

In 2000, total earnings of retail workers nationwide were reduced by $4.5 billion due to Walmarts' presence. States are also reporting high costs due to providing healthcare and other public assistance programs to employees from large chain stores since they are paid so little. The average Walmart worker requires $730 in taxpayer funded healthcare and $1,222 in other forms of assistance, such as food stamps and subsidized housing. Chain stores also usually devalue the properties around the store due to increased traffic and noise. It also devalues commercial property because most local businesses don't want to be located next to the competition.

Local stores are more likely to purchase their goods from other locals businesses.  Blonde Grizzly carries tons of merchandise from other Utah artists and craftspeople.  When you buy one of these items you are also supporting another local business besides Blonde Grizzly.  You are helping a local artist.

It's Green to Shop Local

On the other side of this, when you buy from a large box store you are purchasing an item that has most likely been shipped half was around the country or even the world. All the shipping these companies do has a horrible effect on the environment. Locally owned businesses also require far less land to generate an equivalent amount of economic activity, and are therefore better for the environment.

Doing Your Part

If everyone decided to do just 10% of their Holiday shopping at locally owned businesses the change would be tremendous.  A study  in the Austin, Texas area found that if each household in that county simply redirected $100 of their planned holiday spending away from chain stores to locally owned merchants, the local economic impact would reach approximately $10 million! Even modest shifts in your spending pattern can make a huge difference. Make an effort to do some of your shopping this season where your money will make the most difference.  Shopping local helps assure that you have a greater variety of goods to choose from. Help keep local businesses alive.  They are what make your city unique and fantastic.

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