Today, MECEP is releasing a report titled “Going Local: Quantifying the Economic Impacts of Buying from Locally Owned Businesses in Portland, Maine.”
MECEP’s study confirms that, on a dollar-for-dollar basis, the local economic impact of consumer spending at locally owned businesses in Portland is significantly greater than that of national chains. Every $100 consumers spend at locally owned businesses generates an additional $58 in the local economy. By comparison, $100 spent at a representative national chain store in Portland generates an additional $33 in local economic impact.
These findings make clear that buying from locally owned businesses has an increased multiplier effect that creates jobs and can help grow Maine’s economy. Shifting just 10% of consumer spending from national chains to local businesses in Cumberland County would generate an additional $127 million for the local economy, creating 874 new jobs paying $35 million in wages. This is particularly compelling when we consider that since January of 2011, Maine has lost over 2,200 jobs.
To conduct this study, MECEP relied on financial data provided by 28 independent businesses in Portland and information obtained from corporate filings for a representative national chain to model local economic impact. Previous studies of the economic impacts of local businesses in other locales have produced similar findings.
MECEP acknowledges that this study was funded by the Portland Independent Business and Community Alliance with grants from the Maine Community Foundation, the New England Grassroots Environment Fund, and the New England Independent Booksellers Association. MECEP claims sole responsibility for developing the research methodology and for conducting independent analysis of confidential business surveys and other publicly available information.
In closing, jobs are the most pressing issue on everyone’s mind. Because locally owned businesses keep their profits in the community and are more likely to purchase goods and services from local sources, consumer spending at these businesses has a multiplier effect that increases local economic activity and creates jobs.
Garrett Martin is the executive director of the Maine Center for Economic Policy.
