By Susan Odum Extension Educator Community & Economic Development University of Illinois Extension
Buying local keeps money circulating closer to where you spend it creating a ripple effect throughout the community. Therefore, a local purchase not only helps grow the local business you purchased from, but other businesses in the community, as well as contributing to the growth of the local tax base.
As dollars are circulated and re-circulated and sales taxes are generated locally, we can strengthen our local economies and better enable our local governments to provide essential services like public safety, parks and recreation, utilities and infrastructure.
The local multiplier is related to the number of times that a “dollar” is re-circulated within a local economy before leaking out of the economy as consumers purchase goods and services outside the local area. In the rural communities throughout Illinois, the local multiplier is generally low as consumers typically travel outside of the local area to spend their discretionary income at regional shopping destinations, often in neighboring states. This trend has led to an economic contraction in our rural economies, resulting in fewer local businesses and fewer local jobs, while placing increased pressure on local governments to generate needed revenues to support local services.
Now is the time to reverse that trend and get it heading in the other direction. This can be accomplished as we invest in our local economies by purchasing goods and services locally, whenever possible. Significantly more of your buying dollar stays in the local community when you make local purchases, because local business owners tend to invest in local financial institutions, pay local taxes, and in turn spend some of their profits on local goods and services; therefore, increasing the local multiplier.
In addition, local business owners pay wages to local employees, who in turn spend a portion of their paychecks at other local businesses. In turn, those local businesses pay taxes and spend a portion of their profits on local goods and services, in addition to paying their employees, who then spend a portion of their paychecks at other local businesses, and the cycle continues. Spending locally keeps money in the community, creates jobs and opportunity and allows local communities to prosper. Before your next purchase, please ask yourself this question, “Can I get this item from a local business?” If the answer is “yes”, please make your purchase locally.
No one person can revitalize our local communities alone, however, if everyone commits to making an investment in the local economy by buying local whenever possible, the return on investment (ROI) will be huge.
MARION CHAMBER OF COMMERCE 2305 West Main St PO Box 307 Marion, Illinois 62959