Harnassing the power of the pocketbook
By Belle Hatfield
If there were a way to bring millions into the local economy, without having to attract a new industry or secure a government subsidy, would it be worth pursuing?
That’s the question people could consider every time they opened their wallets.
A growing body of research suggests that the vibrancy of local economies, especially rural economies, is tied to support for, and development of, local businesses and locally sourced goods and services. The support-local movement has gained an ally within Nova Scotia’s labour movement.
CUPE NS president Danny Cavanagh is speaking to chambers of commerce and contacting mayors to introduce the concept of the 10% Shift campaign. It’s a movement, spawned in New England, that has spread to over 100 communities throughout North America, and seeks to encourage local economic development through consumers’ wallets.
The idea is to get wage earners to shift 10 per cent of their weekly spending towards local, independent businesses and/or locally produced goods and services.
“Economic activity is generated by making this simple shift in spending habits,” Cavanagh said in a recent letter to mayors.
In a 2010 edition of the Harvard Business Review, authors of a study said, “regional economic growth is highly correlated with the presence of many, small entrepreneurial employers, not a few big ones.”
When this notion of supporting local is distilled to its essence, it comes down to this: money circulates longer when it is spent within a local economy. Economists call it the multiplier effect.
The multiplier effect is measurable and some economists are making an increasingly convincing case that buying local can add up to seriously big bucks.
A 2013 study commissioned by the Canadian Union of Public Employees in British Columbia found that “independent businesses provide their communities with substantial, quantifiable economic benefits relative to their chain competitors, and that modest changes in purchasing habits can produce outsized impacts.”
That study, conducted by the American-based consultancy firm Civic Economics, found BC independent retailers and restaurants together recirculate more than 2.6 times as much revenue in the local economy as chain competitors.
Using figures gleaned from a series of community-economic studies across the United States and borne out most recently in the BC study, Cavanagh suggests that in a community with a population of about 18,000 and a median income of $31,000, if every resident were to shift 10 per cent of their spending, the potential impact is $55.6 million a year added to the local economy.
CUPE NS has begun a campaign to bring the Shift 10 message to communities throughout Nova Scotia. When Cavanagh speaks to groups he tries to emphasize the power of the individual consumer to effect change.
“We’re looking for somebody to lift a rock up and find millions of dollars. It’s not going to happen,” he told the Vanguard, adding that recent history has proven that businesses attracted by tax breaks and subsidies are usually not sustainable. The businesses often leave when the subsidies expire, chasing the next jurisdiction desperate enough to undercut the competition.
CUPE NS is following its BC counterpart in support of the Shift 10 movement. Why is a union movement championing small business?
Cavanagh says it’s a no-brainer. The public sector is only as healthy as the private sector that funds public services.
Addressing Yarmouth’s current economic situation, he points out that the unionized workforces – in the health, education and justice systems – are now the mainstay of the economy.
“If you took every unionized worker out of Yarmouth right now – if you eliminated the hospital, schools, people who work for the municipalities, postal workers – right out of Yarmouth, there really, essentially wouldn’t be a lot left,” he says.
Since it is public sector wages that are propping up Yarmouth’s economy, Cavanagh says it makes sense for CUPE NS to be encouraging its membership – and the public at large, to think about the power of their pay cheques.
He said the union has taken on this challenge of shifting people’s thinking across the province because, “at the end of the day we all want the same thing, great communities that are great places to live and raise a family.”
CUPE has developed an online pledge form that people can use to affirm their participation in the support-local campaign. It is found at www.novashift.ca. Cavanagh is also hoping the website can become a clearinghouse that can match producers of local products with consumers. He is encouraging local producers of goods and services to get in touch in order to develop a database.
“We want to make it easier for people to connect,” he said.