By Noa Kornbluh, Fall Fellow
One often hears the slogan “buy local,” but I was never really convinced that buying local made a significant impact. Why buy local when local goods are often more expensive and less convenient than products from national chains? Not too long ago I came across a powerful economic argument for buying local. I was told that for every dollar spent at a national store 13% goes back into the local economy and if that same dollar was spent at a locally-owned business 43% returns to the community. That is a 30% difference made with each dollar I spend, and that is a significant impact.
One often hears the slogan “buy local,” but I was never really convinced that buying local made a significant impact. Why buy local when local goods are often more expensive and less convenient than products from national chains? Not too long ago I came across a powerful economic argument for buying local. I was told that for every dollar spent at a national store 13% goes back into the local economy and if that same dollar was spent at a locally-owned business 43% returns to the community. That is a 30% difference made with each dollar I spend, and that is a significant impact.
This
statistic comes from a study done by Civic Economics in Austin, Texas comparing
the economic impact of local versus national book stores. Civic Economics repeated a similar study in
the San Francisco
area. The San Francisco study produced the same
striking results, indicating that local businesses contribute much more to the
local economy than national chains. Economists
found three aspects of local versus national businesses that create a profound
difference in the impact on the local economy.
First, due to scale, local businesses have a higher ratio of jobs per
market share. National chains have
corporate offices where they employ accountants and other administrators who
work for the whole company. Local
businesses staff these jobs locally. Second,
local enterprises source more of their goods locally than national chains. Due to convenience and scale, local
business owners are more likely to buy from other local businesses instead of
global suppliers. Lastly, in local
businesses a larger percentage of profits stay in the community. Profits from small local businesses are spent
by business owners in their neighborhoods on goods and services such as rent or
going out to eat. National and
international businesses have stock holders located all over the world who
share in profits. Buying local may at times be
more expensive or less convenient but it is an investment in the neighborhood
we live in. In the long run, the choices
we make on a daily basis will shape the economic future of our community.
Women’s
Initiative graduates work towards starting locally-owned businesses and in
doing so they strengthen local economies.
Graduates open store fronts, provide jobs and invest in their
communities. When you purchase goods or
services from a Women’s Initiative graduate you are not just supporting an
incredible woman and entrepreneur, you are also investing in the local
economy.