Making 'Shop Locally' a Meaningful Suggestion
Nicholas Johnson
Iowa City Press-Citizen
December 3, 2010, p. A9

Many local businesses become profitable, "go into the black," the day after Thanksgiving ("Black Friday"). If it weren't for our purchases from Thanksgiving through the end of the year, many wouldn't be around in 2011.

So the Press-Citizen Editorial Board is urging us to "shop locally."

But what does "buy local" mean?

To analyze in detail what happens to each portion of the dollars we spend in Johnson County establishments would require more data and degrees in economics than most of us would ever have or want.

Raw materials. We cannot control the portion of what we pay that goes for raw materials, or where they come from -- such as iron or aluminum ore. (China controls over 90 percent of the rare earth minerals in cell phones and electronic products.) An exception would be locally produced foods at our farmers markets. (Although even farmers may import seeds or fertilizer.)

Manufacturing. What portion of what we pay for products "bought locally" goes to manufacturers in the U.S., let alone Iowa City? Almost none, except for local artists and artisans -- who may use brushes and metals from elsewhere.

Packaging, transportation and warehousing. What portion goes for packing and shipping? The worker who made your cold cereal box earned a larger share of what you paid than the farmer who grew the grain -- and neither of them lives here. That's true for most of the packaged products we "buy locally."

Rent and utilities. A portion of what's embedded in the price we pay are things like rent and utilities. Last I knew MidAmerican Energy was owned in significant part by Warren Buffet. Mediacom is owned by some guy in New York. The portion of our "local purchase" that we, or a local business, promptly sends out of state does little for our local economy.

Franchises; national chains. How large a portion of the price of anything at Best Buy stays in Coralville, rather than going to corporate headquarters? Why, and by how much, is that better than an online Best Buy purchase? How large a portion of our "buy local" money do other "local businesses" send to the remote corporate headquarters of national chain restaurants, retail outlets and motels?

"Local" owners. Whether a stand-alone business, or a franchise, how "local" is the owner or manager? Do they spend the profits here -- or invest in a distant mutual fund? Or have they long since retired to Arizona or Florida, and spend there?

Workers' pay and benefits. Finally, how much of what you're spending when you "buy local" is actually ending up in the pockets of the workers in that establishment? Does the owner pay a "livable wage"? If you want your money to circulate as fast as possible locally, giving more of it to local workers is the answer.

There also can be other-than-economic benefits of "buy local," in quality, environmentally, socially and healthier foods.

So, what should the Press-Citizen Editorial Board do if it's really serious about its "shop locally" campaign?

Get real. Get specific. Give us the information we need to fall in step, intelligently and meaningfully, behind its drum major. Do the research and give us the answers to the dozens of questions, such as, "what's the difference, in terms of what stays in the local economy, between buying a hamburger at Hamburg Inn No. 2 and at McDonalds?" Tell us how much of our merchants' rent money leaves town.

If the Press-Citizen would give us the tools -- the precision tools -- we need, I and a lot of other local citizens would be willing to do the job.

Without the tools, "shop locally" is just a rousing bumper sticker of a slogan, and, as Tom Joad says to the filling station attendant in Grapes of Wrath: "You're jus' singin' a kinda song."
Nicholas Johnson, a former FCC commissioner, teaches at the University of Iowa College of Law and maintains and