The Neighbor Co-ops have a Big Impact
added 10/28/08
by Terry Appleby
This past March we were among a group of food co-ops from our region of New England that commissioned a study of the economic impacts co-ops have on our communities. Seventeen co-ops from western Massachusetts, Vermont, and New Hampshire participated, and the results are both surprising and encouraging. We hope to use the results of the study to help identify where we are today and where we might be in the future if we can leverage the power of our organizations. The following is a summary of the study.
The Economic and Fiscal Impacts of Food Cooperatives in Northwestern New England
Using survey data from 17 food cooperatives in Vermont, New Hampshire, Massachusetts, and Connecticut, we estimated their impact on the regional economy. The results are impressive. Note: Although the co-ops are legally separate entities, they are linked by a shared vision, as well as organizational and governance structures that empower workers and members. They are also committed to buying and selling locally produced goods and services.
Direct Impacts
Members : 64,000, which is more than 7 percent of the total population of their host counties.
Sales: Aggregate sales = $161 million last year, equal to ~ 8 percent of sales for supermarkets in those counties.
Employees: The co-ops employ 1,240 workers; 62 percent work full-time, compared to 43 percent in supermarkets. The Vermont total is 623, which would make those ten co-ops one of the top 25 employers in the state.
Wages: Total annual wages were $28.6 million and the
average wage is $23,049, which is 18 percent higher than the average for food and beverage stores in the same states.
Economic and Fiscal Impacts
| Category | Direct | Indirect and Induced | Totals |
| Output | $161,026,662 | $118,281,350 | $279,308,012 |
| Employment | 1,214 | 1,049 | 2,263 |
| Compensation | $34,339,587 | $40,669,446 | $75,009,033 |
| Other Property Income | $4,929,074 | $23,757,307 | $28,686,381 |
| Indirect State Taxes | $7,318,935 | $6,377,947 | $13,696,882 |
| Direct State Taxes | $433,938 | $402,895 | $836,843 |
Buying Local: The co-ops bought $33 million in local products: $10m for fresh farm products (fruit, eggs, vegetables, and meat), $18m for processed foods (bread, cheese, sauces, etc.), and $5m for other local products.
State & Local Taxes
Indirect (sales, excise, and other taxes paid during normal operations): $7.3 million.
Personal income: The 1,240 co-op employees paid approximately $434,000 in state income taxes.
Property: 11 of the 17 co-ops own their stores and paid almost $500,000 in property taxes last year.
The multiplier effects of circulating money in the local economy are significant. The co-ops buy from wholesalers, farmers, and service providers who spend some of the money locally for payroll, equipment, supplies, utilities, and taxes (“indirect” effects). Some of the wages paid to co-op employees and to workers down the supply chains are spent locally too (“induced” effects).
Other Benefits
Livable wages: Part-time work is a choice for some, but most people need full-time jobs. Full-time hours plus higher than average wages means that experienced workers in the lowest paid jobs earn a livable wage.
Workplace democracy: Some co-ops are managed collectively, while others encourage workers to participate in key business decisions. This provides workers with opportunities to gain valuable skills.
Buying local is a powerful economic development strategy and an important tool for protecting the health and productive value of open land. It helps existing farmers seeking to diversify and those who want to enter this challenging field. In the end, it’s about building community and increasing self-reliance.
What Do You Think?
Have some thoughts about this article? We’d love to hear from you! Please email us your suggestion or question.
