Local Purchasing Models

A priority of Wellbeing Economies is to change the economy at the local level.  We want to go beyond reducing inequality to other factors that produce wellbeing – wealth building, work that brings dignity and happiness, building community and eliminating the fear of falling through the societal gap.

Local and Regional Economies contain many important levers to begin the shift from extractive models (moving money out of the local economy) to virtuous models that keep money local and build from there.

When you shop at a large chain store a small portion of that money stays local.  The employees get their wages and a few local businesses may  support that location.  A local business keeps more of that money in the region through higher wages, paying taxes locally and through distributions to local owners.

Over the last few decades we shifted a big percent of our personal and business spending towards big multi-state businesses that extract money from our economy and suppress wages.

We can shift all sorts of spending back to our local economy.

Democracy Collaborative (one of our partners) has pioneered some of this work.  Sometimes called “The Anchor Institution Model” or “The Cleveland Model” this work entails getting commitments from the community and especially large institutions that are not going to move away (they are anchored to the community) to purchase more locally.

To give you a sense of how impactful this can be, the Democracy Collaborative estimates that Hospitals and Universities alone account for 9% of US GDP. Hospitals alone employ over 1 million people and spend over 50 billion in purchasing annually!

Democracy Collaborative has published books and papers on this model and you can read an overview on their website here.

The Institute for Local Self Reliance (ILSR) promotes other ways to shift from big corporations to local businesses.   For example, their report on the impact of Dollar Tree and Dollar General is quite eye-opening.   It is not surprising to learn that they pay low wages, but there are so many other effects that they have on employee wellbeing and other community impacts.  Can your community support local businesses to serve these needs instead?

Our goal at WEAll California is to bring you resources like these to consider as you develop your local community vision for a healthier economy.   Contact us for more tools.