Why is Localism Better? Support the Movement!

WHAT IS LOCALISM?

Localism supports local production and consumption of goods and promotion of local culture and local identity. Localism is a systemic approach that allows local autonomy to be retained, and is conducive to the prosperity, mutual benefit, and ultimately, the increased quality of life for the citizens of the community.

For several decades the pace of net job creation has been declining, if not at the least subdued. This trend is not isolated to specific areas of the economy, although some areas are harder hit than others for a variety of reasons. Sadly, this trend can be witnessed in every part of the economy. Through the recent recession that we are still pulling out of, including the housing market bubble bursting, the trend has shown up with marked results in many areas of the country. These results include multitudes of houses across the country that were foreclosed upon still standing empty. Other effects can be seen in Detroit, Michigan, where significant portions of the city are essentially ghost towns. The main force that drives economic stability is entrepreneurs creating new companies and new jobs as a result.

JOB CREATION

For small businesses this trend was not seen. While during the recession jobs were shed from large firms, jobs remained stable in smaller firms. Overall, small businesses actually provided a net increase in the availability of jobs throughout the recession. Through this, financial stability is seen not only on a general level, but on an individual level. Unemployment numbers have been shown to be less severe in direct correlation with the amount of small businesses in a given area.

Studies show that for the past several decades the pace of net job creation has been, at the least, subdued. This decline is not selective to particular segments of the economy, but reaches every economic nook and cranny. This trend is also leading to business dynamism reaching an an all-time low; Which has been observed throughout the country.

During the great recession, job creation in the locally-owned small business sector showed a much more robust growth and retention rate than large chain-style businesses. It was the smaller businesses that retained net job growth, while larger inter-state and international firms were shedding jobs in an effort to maintain their profit margin. Small businesses account for close to 80 % of the jobs created nationwide.

Because of this, there is very strong evidence that local ownership matters greatly for economic growth, across both rural and urban areas.

It is plain to see that entrepreneurs play a critical role in sustained economic growth, in part through net job creation. This applies not only to their local economy, but to their state economy and beyond.

ECONOMY STIMULATION

Smaller, local businesses are very important to the overall economic strength of their surrounding areas. This is not restricted to the local village, town, or even city. Small and locally owned businesses contribute not only to their local economy, but to the state and even the country within which they reside. This can be seen through looking at overall statistics from the most recent recession; large businesses laid off a multitude of workers to keep their bottom line in the green and keep their shareholders happy, as opposed to local business being invested in not only their employees, but their local community.

For every $100 spent at local businesses, $43 stays local as opposed to chain-style businesses, whereas national chain-stores only return $13 of the same $100, showing that locally-owned businesses contribute significantly more to their local economies, especially when compared to non-local businesses.

This goes into sales tax collection which is one of the main sources of income for local economies. Many chain-style national chain stores are legally allowed to keep a portion of sales tax collected, and this situation gets even worse when shopping online. With online shopping, there is often no sales tax paid despite recent efforts to curb that. This again shows that spending you money at locally-owned businesses substantially benefits the local economy whereas chain-style stores, or even online shopping, takes most of that out of the local economy whereas online shopping can even remove it all together.

Independent merchants provide their local community with a tremendous injection of economic activity. We must also remember that the opposite is true when shopping at chain-style stores that any jobs and influx of money into the local economy is lost to a very real degree.

A study in San Francisco showed that increasing the independent locally-owned business market share by just 10% would give nearly $200 million in economic activity and produce nearly 1,300 new jobs. Taking that 10% away removes that $200 million and those 1,300 jobs. This activity has been seen over time, and if it continues will cost billions over time to the local economy. To achieve that 10% is not hard, just redirect a shopping trip every so often or seek out a locally-owned hardware store. Often the level of service and caring is immensely greater, as a direct result of the owner often living in the very same community as you do.

Chain stores do bring in more revenue for the area they are located in, but that is mitigated by the reduced return to the local economy compared to locally-owned businesses. Studies have shown that the surrounding communities often experience a drag on their economy, if not outright destruction. Here in San Diego county we have seen this historically, and even in action today. While we do have many locally-owned business, comparatively few large chain-style corporations are overriding those businesses, in essence robbing both our fellow San Diegans as well as our local economy.

The largest companies and chain-style stores are the recipients of government subsidies. Through appropriate political action, those subsidies can go to creating jobs in the small business sector over the chain stores that have profit margins making those subsidies worthless. This causes further inequality and stagnates wages at the low and middle income levels, as we have seen. To drive subsidies to where they can cause actual impact and economic growth is necessary to say the least.

CAREER OPPORTUNITIES

Locally owned businesses are a valuable resource for communities to retain their highly educated residents.

Local businesses also help to retain their highly educated residents, as well as promote the perpetuation of education in future generations. The idea of working in an encouraging environment, in which one can pursue their passions and utilize specialized knowledge and training, is in and of itself a priceless perception by a community’s youth. This, in stark contrast to failing economies seen in towns that have experienced the shock in outsourcing their business affairs to conglomerations, belies an overall optimism within the community. Instead of relegating themselves to the prospect of low-income, dead end jobs, and thus resorting to a life of vices to cope, future generations of workers and business owners can aspire to new heights in innovation, planning, and achievement. Furthermore, when an employee feels valued, and feels pride in their work, they in turn are more committed to their job. This leads to happy, productive employees, a successful business, and a thriving, diversified community.

Wage inequality within the working world is primarily driven by large firms, from entry-level to managerial levels and beyond. Simply put, the larger the firm, the larger wage inequalities will be found. For more equality we must look to the small independent and locally-owned businesses.

Locally owned stores often have higher payrolls, better benefits, shop locally themselves for their necessary goods and services, which retains a much larger share of their profits within their local economy. They also have less of a strain on the resources of the local economy and do not generally contribute to sprawl via new construction.

COMMUNITY AND COMRADERY

In Austin, Texas, there were two small businesses and a chain store attempted to open across from them which would have put them out of business. They successfully rallied together the local citizenry and effectively stopped the chain store from opening.

Entrepreneurship drives America’s economic innovation and prosperity along with serving as a key means for families to move out of low-wage jobs and into the middle class and beyond. In addition, the success of locally owned, independent businesses provides real-life inspiration to our young people, proving that they can stay in San Diego and make a life for themselves and their future families where they grew up.

Instead today’s youth seeing nothing to look forward to but low-level, minimum wage jobs provided by big corporations and chain businesses, see unique and varied opportunities; With the prospect of being a part of the next successful generation of entrepreneurs, they are motivated to get specialized vocational training and strive to reach their dreams. Alternately, the children of successful entrepreneurs can emulate their parents and take on the roles of responsibility and productivity that foster impactful, fulfilling lives and a thriving society.

Small business owners can network with eachother to attain an additional level of security and success. If Bob the butcher buys his bread from Ben the baker, and Ben the baker buys his steak from Bob the butcher, then they both benefit from a shared prosperity, and quality products (or services) the other local providers. And to take it one step further, if Bob sends his customers to Ben and Ben sends his customers to Bob, then all of those customers get to benefit from both companies, and both companies get to benefit from eachother’s customers. This leads to consumers getting a chance to have an active role in supporting their local economies by buying local. This in turn stimulates economic growth within the community.

When you consider that every member of a society is a possible contributor to that society, then we can all start systematically upholding our ideals and values to the mutual benefit of all.

INCREASED QUALITY OF LIFE

Working at small businesses and locally-owned businesses significantly increases and employee’s commitment to their organization. This leads to increased quality of life and a more resilient civil society.

Entrepreneurial culture facilitates the effectiveness of a community as a whole and provides for a problem-solving capacity for addressing local public health concerns. This leads to communities with a large concentration of small locally-owned businesses having greater levels of health within their local populations.

It’s clear to see that an entrepreneurial culture enhances the autonomy, prosperity, and even health within a community. Unlike large corporations, who are profit-oriented and distance themselves from their employees personal problems, small locally-owned businesses take on the challenges that communities face, and help in problem-solving in regards to the health and well-being of the citizenry.

ENVIRONMENT FRIENDLY PRACTICES

Mass production was the movement of the industrial age. Factories, with their large amounts of waste and air pollution, are the assets of these mega corporations. However, local businesses, like micro-farmers, micro-brewers, and craftsmen all keep their production on a small scale. Many try to minimize waste and their environmental impact, and source their materials locally as well.

When products are shipped in from the aforementioned distant factories, the fuel, additional packaging, combined with the need for large-scale warehouses which add strain to local grids via their additional electrical usage, all contribute to the overall negative impact on the environment. Bluntly put, the efficiency of the “industrial” scale is not all its cracked up to be. The wastefulness of this model of business is offset by Government subsidies, which abound among corporations. However, as the general public catches wise, this trend is slowly transitioning…

Land use restrictions are shifting things in the favor of locally owned businesses as locally owned businesses tend to use existing structures in favor of new construction.

Large interstate and international chains prefer developing new construction in undeveloped areas whereas locally owned businesses tend to use existing structures in town centers. The town centers become ghost towns of un-rented commercial buildings. While areas of undeveloped land are leveled and built up as superstores surrounded by giant parking lots, or generic and homogeneous malls or mini-malls with little variety or local personality.

As an example, an instance occurred in Alpine, CA, wherein the locals banded together to stop such a conglomeration from taking over a beloved area of land known as Wrights Field. Instead of letting the corporation destroy precious habitat and gorgeous hiking trails for the sake of their concrete monstrosity, the residents paid into a trust and hosted fundraisers to pay for the land outright, with the pretense that the undeveloped land shall remain intact and would always be made available to the public for recreational use.

SUPPORT YOUR LOCAL ECONOMY

We are forced to ask this question: Is it fair to give taxpayer money to big corporations that will then use it to put existing locally-owned businesses out of business?

If everyone within the community, entrepreneurs and consumers alike, adopt the mindset of being an integral part of the grander scheme of things, then we can all do our part to help sustain and gain momentum in the “buy local” movement.

As previously mentioned, every $100 spent at a locally owned business keeps roughly half of that in the local economy, through taxes, wages, and services required. This helps to create and maintain additional local jobs and acts to expand the overall tax base.

This is in stark contrast to chains or franchises, through which less than 15% of their income is redistributed back to their host communities.

What does this mean? It means the the local consumers then become dependent upon the mega-corporations for their goods and services. It means that the locals then only have those few remaining options when choosing where to go for things they need and want.

Large conglomerations can simply funnel money into sustaining more challenging store locations, driving price-wars among competitors until the competitors run out of funds and go out of business as a result. Once their competition has been destroyed, they can then mark prices back up to where they want when no one has a choice but to accept it. As local consumers we can simply shop locally to stem the tide of corporate takeover

WHAT CONSUMERS CAN DO TO HELP

Shop local! You can help to sustain the perpetuation of the local start ups and family businesses by showing your support. This creates a boon for buyers, sellers, and service providers alike. It creates a win/win situation: If the money being spent by a community’s consumers is spent with local small business owners, then the whole town will see a revitalization to the enrichment of all, whereas, mega-corporation businesses vying for the locals’ patronage has an unfair advantage over small businesses, because they can pour money into one of their branches until it sees a profit, and even run at a loss for an extended period of time until the local competitors close their doors.

You can be part of the movement by simply shopping locally a mere 10% of the time! Just redirect a shopping trip every so often or seek out a locally-owned specialty store. They are passionate about their business and will most likely have years of experience in their field of work. Even if the prices are slightly higher than the chain stores, you will most likely receive a higher quality of service and/or product in exchange. When you realize the bigger picture, that extra 10 cents you paid is a small price to pay for all the added benefits inherent in your shopping practices.

Share the vision! Help spread the word to get momentum behind this movement! You know that localism is a good thing that creates a win/win situation for everyone in the community! Now its time to tell others about it! Share the ideals of localism on social media. Get the word out! The more people who can commit just 10% of their spending on shopping locally, the more of a positive impact we can make!

WHAT BUSINESSES CAN DO TO HELP

Create a Network of Success! You can become the catalyst for prosperity and greatness by networking with other entrepreneurs with similar ethics and ideals. Like-minded people who band together have, historically, caused revolutionary changes to take place. Look at how the origination of unions started a movement to protect workers from hazardous and dangerous work conditions. Look at how the women’s suffrage movement gave women the same equal rights as men.

Now that the US economy drives the disparity between the mega rich and the “lower classes”, it is more important now more than ever to rise up and fight back!

Unite Small Business Owners! Not only can family-owned businesses thrive with the support and patronage of the local community, but when local businesses pull together and support one another, they create a network of success, despite any pressures placed by chain stores or interstate or international corporations. When local business subsist on each other’s services, then it is conducive to an idyllic, win-win situation. When local business owners not only buy from each other, but recommend each other to other consumers the benefits are multi-fold; Locals see them as reliable experts in their field. Keeping money circulating within the local economy sustains mutual success and prosperity to all involved, as well as ensures a sense of comradery and “native” pride among the citizenry.