Local economy most conducive to good health, study suggests

Chris and Rebecca Bursch of the startup franchise operation Office Pride chat with Chamber official Kathryn Foster. Small business contributes to physical health of a town, a study says.

We make our friends; we make our enemies; but God makes our next door neighbour.

— G.K. Chesterton

We little expected in our explorations of local economy to find so quickly scholarly support for our hunches. A trio of scholars with large brains and careful, dry academic language recently sifted studies about business size and public health, and offer support for a line of reasoning that will resonate with every friend of local economy.

Namely this. A population marked by small business and a lococentric context for livelihoods is healthier than one in the shadow of big factories and corporate behemoths. Apparently local economy has more “collective efficacy” even though workers in the factory economy may have better pay and richer health benefits, according to a study.

“As I understand it,” says Chattanooga architect David Barlew Jr. in a recent post, “collective efficacy refers to a community’s ability to interact, build relationships, create trust, work together, get along, and collectively solve problems. Simply put, towns with a healthy small business sector have it, and towns without a healthy small business sector don’t.”

THE “BIGGER IS BETTER” school of thought that has controlled academia for decades speaks well of big players such as VW. The jobs pay well, benefits packages are extensive, unions and “other work structures” bring long-term secure employment. People at large plants make use of insurance for health services. Chambers of commerce have traditionally played this market, attempting to lure corporate giants to their industrial parks and counting job growth goals as an ideal measure for justifying the use of members’ dues.

But a town with large employers such as Volkswagen, TVA, Amazon and Wal-Mart is hobbled by disadvantages, the study suggests. Here, people participate less in local affairs because they are “alienated from the decision-making process as corporate goals take priority over the needs of local residents.” Residents in big-company towns feel more stress because social ties and support are lacking. A town dotted by big retailers will tend to have higher rates of adult obesity and age-adjusted mortality, one cited study says. A people’s sense of economic security is also subject to the whim of foreign markets and actors in faraway places, notes the Cambridge Journal of Regions, Economy and Society in a 2011 analysis.

Dominance by big players reduces the role of the common man in his city’s affairs because residents are “alienated *** as corporate goals take priority over the needs of local residents.” But a small-business competitive environment brings personal commitment to civic and public duty and a “higher level of community efficacy.”

AN ECONOMY OF SMALL firms also has downsides. Small outfits lack the scale to offer high wages and generous health insurance benefits. They are readily buffeted by the doings of bigger companies.

But the strength of such an economy meets with the authors’ favor.

➤ A strong small-business environment makes it easier for a locale to solve problems. A “diffusion of economic activity across a larger number of business owners *** results in a pluralistic power structure where a large number of business leaders compete for prestige and influence in local decision-making.” A town can be held hostage to big players who want their own way.

➤ High levels of personal interaction and trust among townspeople allows for more interaction, and higher levels of trust help create a better public health environment.

➤ “Our findings support a small business perspective. We find that counties with a vibrant small-business sector have lower rates of mortality and lower prevalence of obesity and diabetes. Small-business owners produce important noneconomic rewards for communities, such as enhanced stocks of social capital and collective efficacy. *** [T]he small business sector may produce salutary rather than unfavorable community health outcomes” (italics in original).

“The small-business sector is part of the locally oriented, civically engaged independent middle class,” the report says. “Our analysis demonstrates that investment in locally grown enterprise has the potential to yield large returns for communities” as regards public health.

The study does not surprise Kathryn Foster of the Chattanooga Chamber of Commerce, who says the positive direction of small-business life spills over into the public’s quality of life.

The authors urge colleagues to explore how entrepreneurial and creative culture interacts with “religious institutions that provide a theological underpinning for entrepreneurship.”

Heeding the scholars’ suggestion, we plan In a future post to explore the connection between local economy and good works of the kind taught by the Christian church.


[This essay was first published Aug. 24, 2012. DJT]

Sources: David Barlew’s blog is at http://www.barlew.com/about.html; download the paper as a PDF (14 pages) through a link at Mr. Barlew’s blog; “The health and wealth of [U.S.] counties: how the small business environment impacts alternative measures of development,” Cambridge Journal of Regions, Economy and Society, Troy Blanchard, Charles Tolbert and Carson Mencken, 2011.