What do you do when you can’t find a place to buy underwear?
The people of Saranac City, NY, a sleepy hamlet in the state’s Adirondack Region have turned to an alternate form of capitalism to answer that question, and to help solve their lack of local shopping options. From the NY Times:
It’s a situation familiar to many communities these days. But rather than accept their fate, residents of Saranac Lake did something unusual: they decided to raise capital to open their own department store. Shares in the store, priced at $100 each, were marketed to local residents as a way to “take control of our future and help our community,” said Melinda Little, a Saranac Lake resident who has been involved in the effort from the start. “The idea was, this is an investment in the community as well as the store.”
It took nearly five years — the recession added to the challenge — but the organizers reached their $500,000 goal last spring. By then, some 600 people had chipped in an average of $800 each. And so, on Oct. 29, as an early winter storm threatened the region, the Saranac Lake Community Store opened its doors to the public for the first time. By 9:30 in the morning, the store, in a former restaurant space on Main Street opposite the Hotel Saranac, was packed with shoppers, well-wishers and the curious.
Shares in the company were sold for $100, and investors were limited to a $10,000 stake. And the result is a business that is by its own nature extremely stable and sustainable. The customer base is built in, and unlike Wall Street’s constant drumbeat of ‘maximizing short-term shareholder value,’ the owners of the Saranac Lake Community Store can make their decisions with a long-term focus.
One nugget of information found deep in the article also speaks to my philosophy of strong local economies driving the nation’s future.
In a recent analysis of nearly 3,000 rural and urban areas across the United States, a pair of Pennsylvania State University economists found that the areas with more small, locally owned businesses (with fewer than 100 employees) had greater per capita income growth over the period from 2000 to 2007, while the presence of larger, nonlocal firms depressed economic growth.
That analysis - Does Local Firm Ownership Matter? - was published in Economic Development Quarterly by David A. Fleming and Stephan J. Goetz, and its’ abstract states that “these results provide strong evidence that local ownership matters for economic growth but only in the small size category.”
Adding to the theme of “strong evidence,” the USDA dropped a whopper of a number this month:
A new U.S. Department of Agriculture report says sales of “local foods,” whether sold direct to consumers at farmers markets or through intermediaries such as grocers or restaurants, amounted to $4.8 billion in 2008. That’s a number several times greater than earlier estimates, and the department predicts locally grown foods will generate $7 billion in sales this year.
Even the slimmest definition of local – the farmers market/farm stand business – was worth $1.2 billion annually. These local foods are helping to restore a national system of eating that has gotten out of whack in the last 30 years, creating near-monopolies where three to four companies dominate most food commodity markets (beef, corn, soybeans, etc.), and where skewed subsidies give us make hamburgers, chips and soda cheaper than broccoli.
Makes you wonder what they’re eating in Saranac Lake.