Biggest Bang for Your Local Buck

If you’re reading this blog, I’m going to assume you know all of the economic benefits of shopping with locally owned businesses. (If you don’t here’s a post I did for the bookstore with lots of data.) Executive summary: Karma wheel, it all comes back to you. Or to put this a different way; profitable locally owned businesses are good for the locales in which they are owned and operated. The more profitable they are, the more they can donate, the more taxes they pay, and the higher the employees salary, all of which is good for you. I'm also going to assume that you're not an eccentric millionaire and that you want to do as much as you can, within your means, to contribute to your community. Here are some ways to amplify the economic benefits of your local spending, without actually spending any more money.

Pay in Cash: Credit cards are convenient, but that convenience comes at a cost. Some of it is interest payments and customer fees, but much of that cost is paid by the stores themselves in the form of merchant or vendor fees. (This is not a knock on it, but if you've ever wondered what's in it for American Express with the whole Small Business Saturday thing, this is it.) In the long term, these fees lead to more expensive stuff, as the fees are built into the cost of goods, and in the short term they can be a major burden on small businesses. After staffing, credit card processing fees tend to be the next biggest single non-discretionary expense. There are no fees for cash, of course. Cash, though, takes some planning ahead. At PSB at least, if you place an order online and choose the “Pay in Store” option, not only will the books be set aside for you, you’ll also see the exact total and will only have to take out what you need. This is a little trickier if you're shopping at a store without e-commerce, but, if you've got one of those fancy computers that also make phone calls in your pocket, you can calculate your cost. You spend the same amount, but the store makes more profit.

Take a Half Day During the Week: Things tend to be a little slower at stores in the mid-afternoon and mid-morning during the week. If you can arrange to shop during those times, not only will you have a relatively quiet, relatively stress-free shopping experience (and all the bookseller help you can stand if you're at PSB), you’ll lessen the rush on the weekends making it easier for other shoppers to shop. Spreading out the sales also makes it easier for employees to do the kind of maintenance (like re-shelving books and bringing down overstock) that make it easier for everyone to find what they're looking for. A store in good working order, with enough staff time to give the personalized service that makes shopping local such a pleasant experience, and a generally less Hunger Games atmosphere, all lead to more sales and more profits. (And just take a minute to dream with me here, and imagine your weekend, when you've done all the shopping on Wednesday.)

Bring Your Own Bag: Dude. Seriously. Are you still getting a bag whenever you go shopping? Sure, taking a bag isn't the most evil thing you can do, but it's probably the easiest evil thing to not do. Just put a collapsible bag in every single satchel, handbag, purse, carry-all, you've got (and maybe one in every coat). I mean, seriously, last I counted, we still only have one planet and last I checked, we're still punching it in the taint. Yes, there are a lot of things we're doing that are far worse (Hi there, mountain top coal mining and deep water oil drilling. Also, fuck you.) but these little daily habits add up when everybody does them all the time and they don't require a miracle of science to fix. At the store, I will give you a bag if you want one and I'll do it with a smile, because I don't know what is in your life that has brought you to this particular decision. I know there are times when a bag is totally justifiable and so when I'm behind the counter, in the moment, I always assume a customer takes a bag because it is one of those times. But, fuckin' seriously, dude, you have hands, you probably want Boston to not be underwater when your grandkids are adults, so fuckin' carry that shit out. Phew. OK. More to the point, bags are one of those little costs (like replacing all those pens that disappear) that chip away at profits. Most stores accept bags, pens, etc, as part of their operating costs, but that doesn't mean you need to use them. (Seriously, did you just “forget” I handed you that pen, like 3 seconds ago?) If you don't, the store makes more profits on the sale, the more profits they make, the more taxes they pay, the more inventory they buy, the more their employees make, the bigger the impact your dollar has on your community.

So to summarize: see you on Wednesday when you bring your own bag and pay in cash.

One more point to wrap this up. Shopping local is not a nostalgic pity party. It is not about preserving the good old days of ye olde maine ftreet fhop. This is rational self-interest. Yes, there is an emotional content to shopping locally (and given that humans are pretty emotional entities, it seems like that argument does belong in the whole “rational self-interest” thing but I don't want to make any economists cry right before the holidays) but there is also significant monetary value as well. Given all the data, even Ayn Rand would shop locally, except when she owned stock in national and international corporations. And that's really how you should think of shopping locally. (Swish.) You are simply buying from a company in which you own stock. The dividends aren't paid out the same way, but they are undeniable. And these three strategies will help increase your return on investment.

Craft Beer and the Next Economy

Picture from Brewfest Link

A couple of Saturdays ago I went to the Hyperlocal Brewfest at the Somerville armory. It was a dozen or so area craft, micro, and other (the other being Sam Adams & Narraganset, which was nice because I'd been intrigued by the Sam Adams Porch Rocker, but wanted to try some before committing to a six-pack. Verdict: It'd be perfect if I'd just mowed a lawn, but I think I'll fill my fridge with other beers) brewers giving tall pours and unlimited samples of their wares. I tried beers from Cambridge Brewing Company, Watch City, Backlash, Idle Hands, Jack's Abby, Somerville Brewing Company, and Night Shift. The CBC, Jack's Abby (which I didn't realize was local) and Somerville Brewing Company, had the best individual beers, and the pims beer (which really tasted like a pims cup, meaning it was cucumber beer) from Cape Anne was really interesting, but the best beverage I had was a combination of Night Shift's Taza Chocolate Stout AND! Viva Habanero, a rye malt with habanero peppers. (For the love of peace and justice and the children and puppies, put that in a bottle!)

Of course, this is all part of the growing localism trend, the absurd belief that life is better when you give enough of a shit about the town or city you live in to shop in a way that supports said economy of said town. (Aside, I wonder how strong the locavore movement is in this small-town value-driven, um, towns, that people keep telling me are the real America. What? Wal-mart put all those stores out of business? OK then.) But with the national unemployment rate hovering around the 8s and looking like its going to stay there for awhile, and the growing concerns around global warming and climate change, I wonder if, more than just producing a delicious, delicious beverage, local-focused craft beer might be leading the way to the next American economy.

In general, locally owned businesses hire more people per dollar of sales than national and international businesses, at least in terms of retail. Part of this employment difference, of course, has to do with duplication of services. A thousand different locally owned businesses will all have their own marketing coordinator, personnel manager, receiver etc, while a large national chain will only have one or a small group meeting those responsibilities. (Part of this difference might also be that locally owned independent businesses don't usually have some rich asshole at the top demanding shmillions of dollars a year in earnings.) And, of course, the other benefits of shopping locally, such as tax revenue, property values, and general economic activity, are well documented, but I think the craft-micro-local beer industry might have even more to teach us.

What about an economy of small-scale manufacturing and production? When we think about restoring manufacturing in America, we tend to think about car factories, and other massive endeavors, the kind of industry that defined the, um, industrial revolution, but maybe the answer to our manufacturing deficit is to go small. Thousands of small operations around the country, hiring people with a productive level of redundancy and, perhaps, making high quality goods in an environmentally rational way at reasonable prices to boot.

Beer, of course, is the perfect product for sustainable small-scale production. You can start your business in your kitchen. If things go well you can be a tenant brewer as Pretty Things did, renting space in existing breweries to make your beer. And even if you end up owning your own brewery, you don't need a huge space for it. And there seems to be a range of economic sustainabilities in making beer; you've got your Sam Adams and Harpoon, and you've got your Peak, Notch, Cape Ann, Ipswitch, and you've got your Night Watch, Pretty Things, and Somerville Brewing Company.

In metro-Somerbridge, we're seeing a little bit of this, especially in terms of various food products, but is there a way to develop, small-scale clothing, appliance, home goods, electronics, and other manufacturing? Cities, towns, and state subsidize businesses all the time, usually through tax breaks and low interest loans, but nearly all of the time these subsidies go to big national chains. Wal-Mart walks into the local city council meeting promises adding 500 jobs by building a warehouse in the town and then casually hints they suppose they could build that warehouse in the next town over unless they don't have to pay property tax on the warehouse for ten years. (Then, because this is Wal-Mart, they deliver half the jobs they promised generally at a non-liveable wage, and if a few local businesses go out because of this, the city's tax base usually erodes even further, but I doubt I needed to tell you Wal-Mart is bad.) Millions or perhaps billions of dollars in local funds have been poured into massive and already successful and profitable businesses. It's kind of like the steroid era in baseball, the strongest are just getting stronger. (A couple places for all the data: The Institute for Local Self-Reliance and The 10% Shift)

But what if towns, cities, and counties, started subsidizing small-scale manufacturing and production? You would probably create more jobs for less money and, in terms of the city's investment, jobs that aren't going to up and relocate to Bangladesh. It would be investments in business owners who are themselves specifically invested in the well-being of the city. And this wouldn't have to mean the end of large-scale production.

Some products, cars, solar panels, wind turbines, etc. just can't be produced at the local level and that's fine. There can be room in our economy for the large-scale and the small-scale, the local and the international, the big and the small. The only reason we don't see more of a mixed economy is because big businesses tend to spend a lot of money on getting bigger, usually in the form of lobbying the shit out of Congress and local governments for tax breaks, subsidies, and lax regulation that gives them economic advantages. Or, they just take a 6.025% price advantage by not collecting and remitting sales tax. (AMAZON!)

But, as usual, it starts with beer. By making home brewing legal Jimmy Carter maybe have begun the process of the next American economy, a small-scale, sustainable, productive economy that creates jobs and lowers our carbon footprints. And delicious beer. Delicious delicious beer.