ISU researcher: ‘Buy local’ works

An Iowa State University professor and researcher says a new Cedar Rapids City Council “buy local” policy should spur job growth.

The council on Jan. 6 overwhelmingly agreed to institute a local-preference policy that will give local business special consideration in the sale of goods and services to the city. Davenport and Des Moines also have local-preference policies.

Dave Swenson, speaking at a “Lunch and Learn” seminar at the Lowe Park Arts & Environment Center sponsored by the Marion Economic Development Co., said every dollar retained in a community helps create jobs.

“If you increase the volume of what you buy from within your economy and you decrease the money that goes out, that money has a multiplier,” Swenson said. “That multiplier will enhance employment in the local economy.

“When you send a dollar out of the community, you never see it return. If you're able to keep a dollar in the community for one or two more rounds, you get a multiplier effect.”

Swenson, who focuses on regional economic changes, said “buy local” works when communities do not pay substantially more for goods and services purchased from local businesses than they would buying them from outside firms.

The Cedar Rapids local-preference policy does not apply to sealed competitive bids on certain matters and other purchases governed by state or federal law.

On other subjects, Swenson said the out-migration of younger Iowans - those between ages 25 and 44 - will continue unless Iowa is able to offer quality jobs with competitive pay.

“They don't just wake up one day and decide ‘I'm a Kansas City kind of guy.' They leave Iowa because they see better opportunities in other states,” Swenson said. “We need to increase the pay and demand for a higher strata of jobs to intercept them. It's a slow process, but we need to do it to halt this out-migration.”

Swenson said the Cedar Rapids-Iowa City Corridor economy likely will grow substantially over the next decade. He said federal financial assistance in the aftermath of the June 2008 flood will help spur construction and resulting job creation, transforming the community over the next decade.

“You have the potential to be a shining star in the state of Iowa,” Swenson said.