Community Allies: the virtue of locally-owned businesses
|Ellen Shepard of Community Allies|
I said in an early piece for this blog that I believed local businesses like Brewed Awakenings Coffeehouse were more valuable to the city than national chains like the Caribou Coffee a block away. But I didn't have the evidence to tell me whether that was intuition or prejudice. Shepard presented a plethora of evidence from recent studies to back up that intuition:
- A 2005 study in Andersonville by Civic Economics found of every $100 spent at locally-owned businesses, $68 stays in the area, while $32 buys supplies that must be imported from elsewhere. Of every $100 spent at a non-local business, $43 stays, $57 leaves. She used the example of Starbucks, "a pretty good chain" in terms of how they treat their employees, and one that doesn't demand subsidies or infrastructure, but the corporation uses one firm for accounting and one law firm, and one graphic artist, and those are probably not located in the town where you're patronizing Starbucks.
- A study of businesses in Lane County, Oregon, found the cost to government of a job produced is many times larger for non-local than for local businesses.
- Old Pasadena, California (local businesses, traditional development pattern) outperforms New Pasadena (national chains, suburban development pattern) 2-1 in sales tax revenues.
- A relatively high ratio of firms-to-workers in a town correlates with better economic growth (Harvard Business Review, 2010) and per capita income growth (Economic Development Quarterly, 2011).
- A study by the University of Leeds found increased imports of consumer goods in Britain had created a 38 percent increase in greenhouse gas emissions during the period studied.
- access to capital
- a level playing field i.e. governments should stop favoring big corporations through subsidies, infrastructure and awarding contracts
- laws against monopolies enforced
- laws that allow cooperative ownership of real estate and community investments. While somewhat off topic, she also suggested the effects of gentrification also could be mitigated by community land trusts which, if formed early enough, could buy up properties to control the rise in rents
- easing business licensing, permitting and zoning, which are nearly impossible in Chicago due to the strong effect of political influence
I'm not opposed to national policies like minimum wage laws, and I am not opposed to seeing Donald J. Trump's bilious campaign get decisively defeated, but I think this community-based approach could go much farther to develop strong, inclusive local economies that would in turn help us face other seemingly intractable 21st century issues like climate, energy, diversity and government finance.
|The Coffee Shop near Loyola's campus.|
Within a block are a Starbucks and two Dunkin Donuts.
Civic Economics, http://www.civiceconomics.com/
Community Allies, http://www.communityallies.net
Democracy Collaborative, http://www.democracycollaborative.org
Institute for Local Self-Reliance, http://ilsr.org
Strong Towns, "The Wal-Mart Index: Results of Our Big Box Data Collection Are In," Strong Towns, 3 August 2016, http://www.strongtowns.org/journal/2016/8/1/the-walmart-index-results-of-our-big-box-data-collection-are-in