From The Professor: The Economic Impact of Buying Local

THE BENEFITS OF BUYING LOCAL

• Strengthens the local economy

• Protects the environment

• Supports small businesses

• May lead to better living standards

The local business community in the State of Kansas has been recovering from the negative implications of the ongoing pandemic using stimulus funds provided by the federal, state and local governments. Along with these government incentives, the practice of “buying local,” in which households’ purchasing behavior prioritizes local goods and services over non-local ones, could ease the negative impact of the current pandemic by strengthening the local business community and maintaining a more robust local economy in the long run.

In a report released on May 20, 2020, the U.S. Small Business Administration reported that 99.1% of Kansas businesses are small businesses, employing 50.5% of the private workforce. When consumers buy local, the demand for the local goods and services provided by small businesses increases, thereby increasing the wages, profits, and jobs available in the local economy. In other words, if Kansas households substitute local goods and services made by small local businesses for a portion of non-local goods and services, the State’s economic output will increase; therefore, local businesses gain more revenues, and households would have access to a variety of local products and probably higher local job opportunities.

A study published by Maine Center for Economic Policy shows that if residents of Portland were to shift 10% of their spending from chains to locally owned businesses, $127 million value would be added to the local economic activity, and 874 new jobs would be created.

BUYING LOCAL is environmentally friendly

Local small business owners demand fewer resources to run their businesses, and this causes less environmental disruption than globalized businesses. For example, local farmers’ farm products take less fuel to transport than products shipped from overseas or a long-distance farming location. Food transportation generates fuel emissions and higher energy consumption. Reducing the distance between where the final products are produced and consumed will reduce fuel emissions and maintain a sustainable environment. When households purchase local products, they reduce fuel emissions caused by transporting goods from non-local businesses.

BUYING LOCAL generates wealth in our local communities

Spending a higher proportion of money in the local economy supports local businesses, which generate a higher income for local people, a higher purchasing power, and more job opportunities. Not only that, but it also generates more tax revenues for the government. The tax revenues generated by buying local could be used to provide more funds to schools, build better infrastructure, and build cohesive institutions that serve local people’s needs, all of which could lead to better living standards.