The Importance of Shopping Local

--by E. P. Taylor


August 8, 2016

We've all heard how important it is to shop locally. In this three-part series, we will examine just why shopping locally is so important, first from the perspective of the individual, secondly from the perspective of the community, and lastly from the perspective of how shopping locally has a positive impact on the very planet we all share.

The model we'll use in exploring the benefits of shopping locally is called the Triple Bottom Line model, or 3BL for short. While fundamentally an accounting framework, especially when speaking of public institutions and non-profit organizations, 3BL is a model that also allows the citizen to more-intelligently make choices when it comes to their purchasing decisions.

The Triple Bottom Line model accounts for three different "costs" of a business or organization: social, ecological, and financial. That is to say, it not only considers how much money a company makes or loses over a period (the financial rating), but also how the mere existence of that business, operating as it does, affects a community's people and environment. Negative effects, of course, weaken a company's bottom line as per the 3BL framework.

In this three-part series, we'll focus primarily on the two criteria which most affect the consumer: the effects of shopping locally on society and on the environment, and why a 'break even' or negative bottom line should concern the would-be customer. However, these kinds of topics don't exist in a vacuum: below, you'll find a comment board (powered by Facebook) that will allow you to question, comment, and discuss with others the ramifications detailed in the series.

The first in the series will be available August 17, 2016, and subsequent postings on each Wednesday through the end of the month. We look forward to hearing from you!

Part 1: The Individual

August 17, 2016

Markets drive Business. This may not seem so profound a statement at first glance; it borders on the obvious, really. But consider: in many places, and at many times, Business had the appearance of holding the upper hand. Sure, it was subject to many of the same forces as today but the average person, whether consumer or employee, often felt they simply had to accept the costs of Business' success.

This was by no means an exclusively negative prospect as the word 'cost' might imply. One could argue, and rightfully so, that the modern world was born of the 'costs' exacted by the capitalistic impulse. Jobs that paid well, the rise of the middle class; the various products and innovations many couldn't imagine living without -- all of these, the 'costs' of Business and of progress.

There were other costs, too. Thinkers in the latter days of the Industrial Revolution -- Henry David Thoreau in writing Walden, for instance -- began to notice these costs, and subsequently to expound upon them. Damage to the environment, to the social structure, and to the human psyche itself were all lamented, but the most an average person could manage in the face of these criticisms was to adopt a hearty dose of apathy and retort: "We have to eat!"

Business, for its part, came to rely on this apathy. Capitalism, after all, is a profit-driven and amoral construct, and for obvious reasons -- as an endeavour of freedom, no one was forced to endure its costs, at least in theory. An individual could choose the hustle of city life with it's modern conveniences and its dreary, ashen skies, or the individual could choose the farmer's life of his or her ancestors. As time and science advanced, however, it soon became clear that fewer and fewer could actually escape the costs of progress -- of Business -- theory aside. Still, the average person felt only able to shrug and accept.

It would remain this way for a long time. Sure, over the years and at the prompting of concerned citizens, governments began to take with increasing seriousness their role in providing for the public welfare. To this end, much legislation would be written throughout the 20th Century with the intention of protecting people (and, later, the environment), from the most egregious costs of Business. It wouldn't be until the final decade of that murky yet wondrous century that the balance would shift.

What shifted this balance, relieving Business of the apparent upper hand it'd held for centuries? People. The market, as a collection of individuals, began to realize they'd held the power the entire time. It was realized en masse that it was the individual's dollars which kept businesses good and bad afloat. No need for apathy -- it was the market which shaped Business all along.

Naturally, one might consider the above a rather trite oversimplification, and it certainly isn't always true for all folk in all places, even today. Further, it risks seeming to assert that individuals could have come to the above realization at any point. They probably couldn't have. In all likelihood, the realization wouldn't have been possible without the growing pains of Capitalism and the sheer number of viable options for the consumer those growing pains produced. Put another way, there was a time that, if you needed a tractor (for example) but had only one tractor maker accessible, you had to buy the tractor from that maker regardless of the costs his business affected on society. This, though, was to change in the modern world forever.

For the most part, todays individual indeed has options. Many, many options. In a case of near-irony, Business (or, more specifically, the model of Capitalism on which it is founded) became a "victim" of its own success. It is the many options the individual has which allows choice between the good and the bad, acceptable costs and those not so acceptable. Enter the triple bottom line framework.

With the wealth of information such as the Internet provides, not to mention the many and varied options it places at one's fingertips, the consumer is equipped now to make purchasing decisions in ways the world had never known previously. No longer is the "take it or leave it" approach of yesteryear's Business climate viable. Unfortunately, the very nature of the game means there will be businesses which fail -- and there have been many already -- but these failures will be offset by greater successes. As Business adapts, the individual will benefit through an ever-increasing number of options, and those options are ever-more appealing. Ideally, anyway.

The same danger awaits the individual now as awaited her at the beginning of our tale: apathy. Many companies that probably should've changed or failed still exist, and many that did adapt and probably should've known success have disappeared before their time. That's why the onus is on the individual to become informed and stay that way, at least in a cursory manner. And, herein lies two major benefits of shopping locally: transparency and accountability.

The small businesses which exist in a community are often nimble enough to adapt quickly -- fewer stakeholders, for instance, means fewer competing interests; the smaller power structure of such companies allows greater agility in adapting to changes and consumer concerns; and, often being part of the communities they serve, local business leaders understandably share many of the individual's concerns about the costs their business might impose on that community.

Large-scale Business often can't meet the aforementioned criteria. Worse, a number have been guilty of "greenwashing", the practice of claiming concern for a local community, using all the buzzwords and branding indicative of true interest in the cares of the local population, while in reality greatly exaggerating their efforts to address those issues. A now-classic example of this is the many large food producers using words like 'natural' or 'organic' when the only difference between their product and that of the competition was a higher price.

Of course, I don't mean to give larger businesses an unfair rap -- many are addressing the needs of the communities they serve in exemplary fashion. Realize, too, that appearances may be deceiving: many of what one might recognize as a national chain are actually franchise operations, owned by a local member of the community. Granted, some folk in smaller towns across the nation only have access to the big box store down the street, for better or worse. (More about this last point next week).

Those lucky enough to live in as vibrant a city as Duluth, though, have access to a plethora of local businesses large and small -- a look in either direction down Superior Street makes this abundantly clear. Many of these focus their efforts on local and sustainable sourcing of their product, whatever it may be, and all of them recognize the importance of the support given them by their community.

So, what's the importance of shopping locally to the individual? Choice, transparency, and accountability for the consumer; support of your neighbors who, in turn, keep those dollars circulating in the community; increased confidence in the business climate, essential for generating new growth; and most importantly, the rightful sense that you're a part of something larger: your neighborhood, your community, your city.

'Til Next Time.

(Don't forget you can comment and discuss below!)

Why Buy Local rotator

Part 2: The Community

August 24, 2016

The first installment in this series focused on the impact of shopping locally on the individual, namely increased choice and increased say in how (and which) costs of Business affect a community. Admittedly, the article was a bit abstract, pointing to some of the less tangible ways shopping locally can provide voice to the consumer -- "Vote with your dollars" may well have been the theme -- but this second installment will dig into the nitty-gritty, numbers side of shopping locally. Rather than detailing such ephemeral concepts as "increased choice", we'll look at how spending your dollars locally keeps those dollars local, and how this helps your fellow citizens and community at large.

First and foremost, studies show that big chains tend to recirculate less than 14% of their revenue within a community. Small businesses, on the other hand, tend to recirculate close to 50% of their revenue. That's quite a difference, but the discrepencies don't stop here. When you consider that policy (even at the local level) tends to favor big chains -- "It's the money, Lebowski!" -- allowing for subsides and tax breaks simply on the promise these large outlets will create jobs, the picture gets even worse.

For instance, a study by Good Jobs First in 2015 showed that, even though there are many state-wide programs across the nation that provide economic development incentives (supposedly) for businesses of any size, a whopping 90% of these funds go to big chains. Subsides aren't limited to "cash giveaways", either. Hundreds of millions of dollars are spent by cities across the US to build the infrastructure required to accommodate the often large buildings these chains operate from. Roads, traffic lights, sewer and drainage, you name it. All very strange when you realize that many of these businesses are among the richest the world has ever seen.

The justification used by both sides (the chains and the politicians apparently beholden to them) is that these corporations will provide plenty of jobs and spur economic growth. Is this the case? No. Fact is, large companies tend to swallow smaller businesses, often resulting in no net gain of jobs, and often a net loss in a given community. Even worse, these jobs tend to be of a lower wage than are jobs provided by the average small business, with wages so low as to trigger a "back door" subsidy by way of social programs being required to help their employees survive. Add to this the fact that the aforementioned tax breaks often result in no revenue for the city or state these companies reside in, and you'll begin to appreciate what a raw deal it is, draining resources which could otherwise go to funding infrastructure, education, and development for the many rather than the few.

With all I've stated above, one might still be inclined to cite the lower prices and "better" bargains offered by large retail outlets as being either an economically fiscal and wise thing to utilize, or an economically necessary decision. While I can certainly understand such sentiment, I hope the costs, as illustrated, are truly understood by the consumer. The tax burden alone, passed from these corporations to the individual, should be incentive enough to reject such short-sighted thinking. Considering that no one likes to pay taxes, the least a citizen should expect is something in return -- good schools, well-paved roads, etc. Now, think of how many times you've driven by a newly built big box store and thought to yourself, "that place is so shiny and bright", all the while worrying how you'll afford a front-end alignment because of all the potholes. Think of how many mom-and-pop shoppes you've seen with "Out of Business" signs in the windows. Think of all the cities and states with budget shortfalls that, subsequently, have to deny teachers and police officers their earned pensions. Think. Does shopping that big box store still seem fiscally wise?

But, enough beating up on the mega retailers (for now). This is an article about why it's actually good to shop locally, not just 'not bad'. Small business owners, affected as they are by such things, understand the importance of shopping locally -- they aren't in a position, as often is the case with the big guys, to own their entire chain of supply -- and often look to other small businesses in the area for the products they use internally or for resale. They tend to pay higher wages to their workers, avoiding the "back door"-type subsidies I wrote of above, which also, in turn, generates further economic activity. Since they're often financially incapable of "bribing" local, state, or national officials, they actually pay into the system and, similarly, don't usually qualify for subsidies of any kind. And, they literally give back to the community; charitable giving by small business accounts for roughly 3% of what gets recirculated in the local economy. (The last story I heard about "charitable giving" as concerns a giant retail store, Walmart had set up a way for customers to donate food so Walmart workers in the store could have a half-way decent Thanksgiving. How altruistic).

Despite the efforts of better-actors in public and private avenues of society, it's becoming increasingly difficult to shop small businesses. Studies show that, because of big business systematically rigging the playing field in their favor, there are fewer start-ups able to gain traction in todays market. Since many of the largest of national chains have a monopoly over whichever niche they cater to, it's getting harder and harder for young, self-motivated entrepreneurs to get a start. Essentially, this means that, if you like stationary (for example), you'll have to get a minimum wage job at your local business supply chain store rather than start a business and follow your passion in the field. Restaurants have an even worse go at it: most new food joints don't survive their first decade in existence. That, and, rigging aside, the largest corporations are able to undercut their upstart competition by taking a loss on a product until their competitor tanks, leaving the consumer with less choice.

Another point, especially salient to a tourism capitol such as is Duluth, the winnowing of local business, of choice, diminishes the character of a given locale. Folk don't visit a city to have the same experiences they could have at home. If all shops are forcibly homogenized, a city such as ours runs the real risk of becoming bland and boring, of no value to the very reasons which prompt recreational travel in the first place. When have you ever heard a person, getting back from vacation, fawn over the burgers at another citys McDonalds, or over the unique selection at another citys Walmart?

In summary, shopping local benefits your community, helps maintain its character, and fosters choice and competition, all the while allowing your city to focus on providing adequate services to all citizens with your tax dollars. Small businesses are usually made up of folk knowledgeable and passionate about their wares, allowing for better overall performance and a better shopping experience. And, shopping locally puts you in touch with your neighbors, many of whom run those small shoppes. Is shopping locally always practical or viable? Probably not. However, it is essential to maintaining the quality of life in your city for all it's inhabitants.

'Til Next Time.

(Don't forget you can comment and discuss below!)

Part 3: The Environment

August 31, 2016

Over the past few weeks, we've touched on just how shopping locally helps the consumer in terms of choice, and how it has a positive impact on their community. Today, we'll expand on the benefits to one's community by examining the role such conscientious decisions play in helping the environment.

Naturally, a discussion on the environment brings to mind, per se, the ecological impact of shopping locally, which we'll cover; however, we'll wrap things up with a brief look at the impact on the social environment as well.

A phrase often bandied about when speaking of ecological impact is "carbon footprint". What this describes, generally speaking, is how much CO2 is released in the production and/or acquisition of goods. You can measure it from any perspective, but it follows a "downhill trajectory", meaning that an individual's own carbon footprint reflects not only their own efforts in acquiring the product, but also adds in the 'costs' of product production. That is, you have a larger footprint if you buy a product made in China (for instance) than you do in buying one made in Ohio.

Measuring one's carbon footprint is a complicated and convoluted process that, to be accurate, would require much more information than the typical consumer has ready access to. We won't be doing that here. For simplicity, we'll look at it in broad terms, and consider two of the largest factors: environmental protection policy in the products place of origin, and the distance between producer and consumer.

The closer an individual is to the place where goods are produced cuts down on the environmental impact by virtue of the goods having less a distance to travel. Planes, trains, and semi-trailers are notorious for their contribution of CO2 to the atmosphere. It should be apparent how shopping for locally produced goods (defined here as goods made within 400 miles of the consumer) would help reduce this source of CO2 emissions. Even when this isn't possible or practical, buying them locally (as opposed to online), while less effective, still results in a significant decrease of one's overall carbon footprint.

The second large factor to consider is that of the environmental protection policies in place at the location goods are produced. Going back to China as an example, their combined, total CO2 output is now double that of the US. Granted, the total output is exaggerated by their significantly larger population, but it isn't exactly their rice farmers releasing all the extra carbon into the atmosphere; rather, it is the factories which mainly produce goods purchased by Western shoppers. In addition, CO2 is often not the only harmful chemical resulting from the production of such goods, and these chemicals are usually just as dangerous to the locale and the workers as they can be to the end users.

This last fact highlights one of the 'costs' measured by the Triple Bottom Line effect: the harm production of goods causes to the workers and local environment. As informed shoppers, we should always be willing to consider the effect our purchases have on the folk who make the goods, and their environment. Don't get me wrong, this can be a double-edged sword -- if no one buys goods produced by methods that result in workers getting cancer, great, no more workers are getting cancer in that way. However, those workers may now be out of a job if the factory closes -- but, keep in mind that taking the long view helps prevent or minimize such gross dichotomies in the future.

The last topic as concerns the ecology we'll discuss is that of so-called 'urban sprawl'. While most small businesses tend to utilize existing buildings in the heart of the local shopping district, many chain stores are required to build new. These stores, then, tend to be located in undeveloped areas and often on the outskirts of town. On the plus side, such developments often make use of local contractors, which leads to many of the same benefits of shopping locally by the individual. However, these benefits are short lived and are quickly reduced by all the negative effects -- the destruction of local habitat, for instance, and the fact that would-be customers often have to drive further to reach the location.

Finally, in making the decision to shop locally, one must consider the "social environment". While such a topic would require it's own article to detail fully, we'll just cover some of the highlights. First, though, it may be useful to look at what I mean by the "social environment". For the purposes of this article, the social environment refers to 'social capital' and civic engagement. Social capital, roughly put, is the quality of citizens in a location -- health, education level, upward mobility...that sort of thing; and, civic engagement is the level of interest and involvement in one's community.

According to studies, both factors of the social environment greatly benefit from a prevalence of small businesses, while both aspects greatly diminish in the prevalence of larger outlets. One of the more surprising findings is that college-educated folk tend to stay put in towns and cities they feel are unique. As discussed previously, the predominance of small, local businesses is part of what helps give any city it's own particular charm. And it's partly that charm which will keep the best and the brightest local.

Other interesting finds of such studies include the fact that crime tends to increase in areas void of local business; that health tends to be poorer, while mortality rates, obesity, and diabetes tend to increase; and that civic participation (voting) tends to drop significantly. (Please refer to the compilation of studies available here).

In other words, and not to put too fine a point on it, not shopping locally is shooting yourself in the foot. No man is an island, and communities rely on each other. So, go out there and become familiar with what your local shops have to offer; meet your neighbors who own them. Help increase prosperity in your area, help improve the quality of life for everyone. Help keep the next generation here and driving our economy forward. Help save the freakin' planet! Like I said before, today's world all but precludes the ability to shop locally in every instance, but you might be surprised at the great deals and unique, quality products you can find locally.

Hope you enjoyed this series, and I look forward to a lively discussion in the comments below!

'Til Next Time.

(Don't forget you can comment and discuss below!)