Ekdog

I saw this on Facebook and thought it might provoke some interesting conversation here. What say ye?

wphamilton

It is a lot of money leaving the local economy due to car ownership expenses. But what suggests that the extra money from reducing car ownership would still stay in the local economy? Surely some if not most of it would still be spent on items or services that aren't local.

Roody

I don't think it's so bad. I live in an area where two GM assembly plants are located, as well as numerous auto supply factories. So some of the money that's leaving your community...is flowing into my community.

gerv 

We've been discussing this very topic for a long time. If you buy a book on Amazon vs your local bookshop. If you get Salmon flown in from Chile vs your local trout stream. If you look at the roughly $6k annual car cost vs what that money could provide the local economy.

Anything that can be sourced out of your own community is going to benefit your community rather than Roody's backyard.

That's why we look at the local bike co-op as a great community effort. The bikes are already in the community. Mostly sitting in basements. Rather than give Walmart and China the revenue, we provide a couple of extra jobs, get basements cleared out, keep landfills free of bikes... it all adds up.

GodsBassist

Anecdotally, living car free allows me to eat out more. A lot more. Most of those restaurants are locally owned, small family type establishments. But I do save a ton more money, too. And all that goes into investments managed by some broker in who knows where.

If you're taking public transportation instead of driving, then that supports quite a few jobs in the local area...

It's probably a wash, but I don't know.

mrodgers

"Funds leaving the local community...."

Gas: I live in the middle of nowhere. I come home and grab gas for the cars generally at a local owned truckstop along the interstate.
Insurance: My insurance agent lives right down the road from me.
Purchase over time: I buy used cars. If the car is local, then my money stays local.
Finance charges: Loans would be through the local credit union I belong to.

If I did buy new cars, I work for an oem automotive supplier. You can't get any more local to oneself than one's own pocket. The used cars I buy, someone has already put that money in my pocket prior to me buying it used.

lasauge

I'd question those numbers - at least where I live, because there's definitely a lot of commercial activity that directly serves automobile use (car sales, gasoline sales, repair and painting services, car washes, parts retail, paving and plowing services) and a large majority of commercial development is based around the prevalence of automobiles (grocery stores that encourage buying in bulk, mega-retailers like Walmart and Target, commercial real estate and residential development planned around automobile infrastructure, retailers of all sorts locating at cheaper locations far from potential customers instead of in centralized commercial districts or integrated with residences). Granted, the pattern of development here is largely a result of an auto-centric lifestyle, but now that it's here, removing too many cars from the equation would be like letting air out of a balloon.

I'd also question the notion of money "leaving" the local economy - in an era where local, national, and international markets are more connected than ever, is there such a thing as net-loss of value to a community when the object in question is something fluid like currency? Even an international conglomerate business that technically takes its profits elsewhere has to pay local labor. Obviously with physical objects (like the used bikes at Gerv's co-op) there's an advantage to using what is locally available instead of expending wealth/time/resources/labor to importing the same object from halfway around the world, but when we're talking about currency I don't think it's that simple.

wphamilton

I understand all that, but what suggests that the people who would be saving money by giving up their cars (money that currently flows out of the local area) are not going to spend it on Amazon or Salmon from Chile for example? Even if it occurred to every one of them, and they all tried to use only local products and services as much as possible, it still isn't that easy. The point being that the $127 million in that graphic does not represent "money that could stay" in the local economy. A fraction of that money might stay in the local economy, but only if at least some of the individuals made a conscious effort and even then only they made an uncommon effort to research the sources of what they buy.

gerv 

The question is what percentage of earned currency has to leave the community to support one transportation or the other. If you think about the car's fixed cost and even its fuel, a large percentage of dollars spend immediately leave the community. For example, a sizable chunk of the fuel expenditure heads straight to Saudi Arabia or some Alberta tar sand project. There little opportunity for you money to make several circuits of a local economy before it is bled out.

No guarantee the excess money saved by not owning an automobile will stay a while with the community, but it does give the community the opportunity to attract that money and do something with it. But unless you town has an oil field, money spent on gas is heading straight out the door.

Roody

How many cars do you have? It sounds like a lot!

Roody

Even if your town has an oil field, it is drilled by a multinational, leaving pennies on the dollar in the local economy right from the start. Then the crude is piped out to a refinery hundreds or thousands of miles away before being shipped back as gasoline.

It would be interesting to find out how much benefit a town gets from a local oil field. After taking into account pollution and social/infrastructure services, it might even be a negative number.

mrodgers

Just 2 like everyone else. 1 old one as my work runner and my wife's which is the newer for her work runner, grocery runner, and family car.

What did I post that makes it sound like I have a lot?

gerv 

Actually, I know a little about other side effects since the city where I lived in Canada has undergone a serious oil boom.

Real estate prices escalate, so your old friends may no longer afford a place to live. Salaries shoot up, but so do expenditures... so everyone lives on the margin of their line of credit.

The upside awaits the tumble...

cycleobsidian

Love that picture graph. I first saw it in an ad in Time magazine.

As another poster said, there is no guarantee the money saved will be spent in the local economy.

However, if you are without a car, you might be more apt to frequent your neighborhood amenities for convenience sake.

That is certainly the case for me. I have extra disposable income since we downsized to one car, and I tend to also eat out alot in local restaurants and buy groceries downtown.

I think the two event are related.

Roody

Lol

B. Carfree

That was especially noteworthy considering the title of this sub-forum. Having multiple motorized couches is fine, if that's your thing. Assuming that everyone else does is somewhere in that sad/funny domain.

surreal

So....

Your local truck stop along the interstate is drilling for oil locally, and refining it right there? Awesome. And, I'm glad to hear that your insurance agent is pocketing 100% of your premium; I hope he sets some aside, in case you ever file a claim. I'm also delighted to note that the folks who sell you their used cars aren't using the proceeds from your purchase to buy any new cars. I guess, in the middle of nowhere, ppl just buy and sell the same fleet of used cars for all eternity. And, I'm mightily impressed that your credit union is able to offer and guarantee loans without participation from ppl outside of "the middle of nowhere". (I'm guessing, if western PA is the "middle" of "nowhere", then Nowhere occupies the space between Philly and Cleveland?)

The fact is, that truckstop's profits from gasoline represent a very small percentage of their total gasoline sales. Your agent likely makes some sort of commission, but the lion's share of your premiums go to whatever company he underwrites for. The guy who is selling you a 2007 Camry may well take your cash to the Toyota dealer for a shiny new one. TBH, I'm not sure where the interest your paying to the CU is flowing, but I'd be amazed if it all stayed in Pennsyltucky, let alone your hometown.

Money goes to money, they say. I have observed that, quite often, this adage is true. If you don't live in a wealthy area, then you might investigate and find that much of the money you're spending"locally" is being funneled out of your local economy.

prathmann

Just as with your comment about the car assembly plants in your town, this also varies with location. Our local oil fields are pretty minor (I rarely see the pumps operating), but Chevron headquarters is only a couple blocks from my house and employs quite a few people from the local area. And there are substantial refineries that I go by frequently on local group rides.

The OP graphic indicated that costs going outside the local economy included gas costs (some of which aid my local economy), purchase price (some of which aids your local economy), insurance, and finance charges. But many communities have insurance agents and adjusters who get some of those costs and all but the smallest have auto body shops, other repair facilities, and ER rooms that all get some of the proceeds from insurance payouts - not to mention lawyers who would also generally be local. And finance charges go to maintain a variety of financial institutions that also have a substantial local presence in most communities. I don't think the picture is anywhere near as clear as that graphic tries to paint it.

Roody

Automobiles represent one of the biggest segments of the total consumer economy, so there's lots of car money to go around. The local economy gets to keep some of that money, but it's a damn small sliver of the whole pie. So I think the graphic has the right idea, even if the numbers aren't precisely accurate.

wahoonc

Look up the Shop Local Movement(s). More of the money spent at a locally owned business stays in the community versus spending it at a chain store. If memory serves me 45% of the dollars spent at locally owned businesses stays in the community versus around 20% of dollars spent at national chain stores. Also FWIW many big box stores and their associated developments get tax breaks that take money away from the local community and seldom put enough back into the community to fully offset them.

Aaron