Local Development
Detroit has a strong foundation for emerging worker owned cooperatives. The collaborative relationships among our local businesses, history of union organizing and community based cooperatives from food distribution to bike building should be strengthened by public policies that recognize such efforts are key to the rebuilding of our city.
Far too much of our recent history has been shaped by efforts to recapture the giant industrial production of a century ago. These efforts dominate our public policies in spite of the fact that statistics demonstrate that small, community based businesses drive economic and creative development. Small businesses have generated 64% of the net new jobs over the last 15 years, creating more than half of our GNP. The majority of these businesses are locally based, employing a range of skilled workers including about 40% of all high tech workers in the country and they produce 13 times the patents per employee of large firms.
Fostering small cooperative businesses means redirecting our spending in ways that encourage local production. That is why we should all welcome the recent efforts by the Detroit Medical Center, Henry Ford Hospital and Wayne State University to increase their local purchasing. These are key anchor institutions in Detroit that could have a tremendous economic impact on the local business community. Currently the combined spending of these institutions is about $1.6 billion annually. Less than 10% of that is spent in Detroit.
DTE Energy has encouraged local buying for several years with 43% of its billion dollar budget going to Michigan. Only a little over 7%, however, is spent in Detroit.
These efforts at increased local spending, as well as those encouraging employees to move into the city, are essential first steps, but they lack the support of public policy and are limited in scope. Currently, none of these anchor institutions have even reached the 10% mark for local spending.
In contrast to this, much of the success of our neighbors in Cleveland in starting worker owned cooperatives such as the much celebrated Evergreen Alliance has been because of the combined efforts of community leaders, foundations and public policies encouraging all anchor institutions to increase local purchases.
The City of San Francisco has taken even more direct measures. In an effort to stimulate local employment San Francisco passed a local hire ordinance that requires all county funded projects worth $400,000 or more built within 70 miles of the county borders must hire at least 20% of their people from the city by the end of this year. Over the next 7 years, the goal will be to hire 50% of all workers from within the city limits.
San Francisco Mayor Ed Lee worked with labor unions and local businesses to get support for the law that took effect in March. He said, "Local hire will not only boost our local economy and get San Francisco families back to work, but it will translate into a reinvestment in our city that will help pay for parks, public safety and social services."
There is no reason why our Mayor and City Council cannot begin to establish policies that direct local spending by all of our anchor institutions. A modest goal of increasing local spending by these institutions to 15% would more than double what they are currently spending, stimulating further activity.
Meanwhile we the people can set a model for these institutions by redirecting our own spending to more locally produced goods and services. Especially during this summer garden season we can accelerate our local neighborhood farmers by buying local produce and asking local markets to carry it. We can also begin to see ourselves not only as consumers, but as producers of new, sustainable, meaningful work.