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Investing in Main Street and the Local Economy to Create Jobs & Lasting Wealth

Michael Shuman Talks about Investing in Main Street and the Local Economy to Create Jobs & Lasting Wealth

Michael Shuman speaks at the National Trust Main Street Center Green Summit (Feb 2011). This 11 minute video clip includes an overview of the Business Alliance for Local Living Economies (BALLE). BALLE includes about 22,000 businesses organized in 80+ local networks. Shuman cites studies that demonstrate how every dollar spent  in locally owned businesses generates 2-4 times the income, jobs, and wealth. The Kellogg Foundation study indicates that most money spent to create jobs is being invested in non-local businesses. Shuman compares the average cost of 45 programs was $22,000, or about 10 times more expensive than the $2000 cost per job when invested in small businesses. And after 10 years, the net cost for attracting out of state jobs is around $67, 000 because many companies left before delivering on their promise of new jobs. The US has about 26 trillion dollars in various savings, insurance, and pension related accounts, Since about 1/2 of the total US economy is local, we could expect half of our savings, or about 13 trillion dollars, would be invested in local businesses.  In fact, almost none of our savings are available to local businesses. Shuman proposes changes that will begin to transfer our wealth from Wall Street to Main Street.

Michael Shuman

Michael Shuman

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2 thoughts on “Investing in Main Street and the Local Economy to Create Jobs & Lasting Wealth

  1. Dalina

    In your reporting, did you find evidence that communities that invested locally were more resilient during the recession?

    • localist Post author

      Yes. In an interview with FastCompany, author Amy Cortese mentions local investing helps community resist the effects of recessions.

      Yes, absolutely. One of the best examples is Hardwick, Vermont, where community investing has been unfolding for a decade. It started when the area’s new generation of farmers and entrepreneurs began getting together to help each other work through business issues. Many of them, such as Tom Stearns of High Mowing Seeds and Pete Johnson of Pete’s Greens, were experiencing rapid growth and would run into cash flow problems, so they began lending money to each other to get through lean times. Around 2005, Stearns raised $1.1 million from a group of (accredited) local investors, all within 50 miles. Other community investments followed. Claire’s Restaurant, which showcases food grown or raised by the area’s farmers, sold prepaid “food coupons” to 50 residents for $1,000 apiece, which entitled them to $25 off a meal once a month for four years. It’s sort of modern day barn raising. All of this mutual support and reinforcement has attracted more entrepreneurs to Hardwick, like the Vermont Food Venture Center, a shared use facility for food producers and startups, which has relocated to Hardwick from Burlington to be part of the action. In the last three years, while most of the country was struggling with unemployment, Hardwick created 100 food and agriculture-related jobs, increasing local jobs by 25 percent.

      Read the full interview here.


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