At the Next Economy Workshop, Donald Jackson said he was interested in considering currency designs that would support small businesses since they are especially vulnerable during an economic crisis. Yesterday, Donald wrote Alternative Currencies and Independent Business Wages. In Donald’s analysis, a fundamental problem small businesses have is paying competitive wages compared to large corporate firms. The solution:

Let us suppose that on top of existing base pay, local employers added an extra $3-4 dollars worth an hour for their employees. However, instead of being issued in dollars, let us suppose this wage boost is issued in a local currency that is only accepted by those very same firms. All of the local, independent firms in a network issue the wage increase, but those increased wages can only be spent within that local network.

Next Economy Potluck Lunch and Workshop
Saturday, December 13, 2008 10:30AM - 2:30PM
Ruiz Branch Library, 1600 Grove Blvd, Austin 78741
Register here: http://nexteconomy.eventbrite.com (free)
The resilience needed to absorb hard times can be provided by regional loyalty currencies. Why isn’t anybody doing it, then?
In fact, they are:

• 300 businesses in Berkshire County, Massachusetts accept Berkshares (launched on September 29, 2006).
• 600 businesses in South East Bavaria accept the Chiemgauer (launched in 2003)
• 60,000 businesses in Switzerland accept the Swiss WIR (launched in 1934 by 16 businessmen)
  The Swiss WIR was created in response to the scarcity of credit during the depression. The WIR is responsible for the economic resilience of the Swiss economy.
  Collective responses for economic relocalization are springing up like mushrooms in Austin. This could have a positive impact on very small businesses, which are particularly vulnerable during economic downturns. Brian Kelsey, economic development coordinator for the Capital Area Council of Governments, is quoted in this week’s Austin Chronicle: “businesses with fewer than 10 employees experienced negative growth in 2001, which implies they may have been disproportionally hurt when the last recession hit.”
  This downturn may not be a “normal” recession, but a symptom of the collapse of economic models that no longer work because they’re not sustainable. Our economic assumptions may be transformed over the next months. It’s time to explore alternatives. This is the first in a series of discussions that will consider solutions for the next economy.
  Bring a covered dish or drinks, plates, etc. and join fellow weekend economic warriors to talk, learn, and plan.
  Onsite childcare available.