How Local Spending, Local Services, and Digital Infrastructure Shape Community Economic Outcomes
Quick List:
- Introduction
- Retail Leakage
- Restaurant Leakage
- Construction & Home Improvement Leakage
- Service Sector Leakage – The Hidden Local Powerhouses
- Food Systems, Agriculture & Grants -The Wins We Already Have
- Digital Identity & Local Visibility – The Infrastructure People Forget
- Plugging the Leaks – What Communities Can Do
- Conclusion – The Community We Build When We Choose Local
Introduction – What Is Money Leakage & Why It Matters
When dollars leave a community faster than they circulate, local economies struggle to grow – but even small shifts in spending can strengthen the resilience of Josephine County.
Every community has a unique economic fingerprint. It shows how money enters, moves, and eventually leaves the local system. In Josephine County, this movement reveals a quiet but powerful issue called economic leakage. Leakage happens when residents spend money at businesses whose profits or supply chains are based elsewhere. As a result, only part of each dollar stays to support local jobs and services, while the rest leaves the region.
Economists measure this through the local multiplier, which reflects how many times a dollar circulates before exiting. In national chains, often only 10–15¢ of every dollar remains in the community¹. In contrast, locally owned businesses – particularly service providers, trades, agriculture, and independent retailers – typically keep 45–70¢ circulating locally per dollar spent². That difference compounds quickly, shaping everything from job creation to school funding to the number of small businesses that can survive here.
Understanding leakage is not about guilt or blame. It is about clarity – seeing the mechanics of how our community grows or stagnates, and recognizing the real power residents hold through everyday choices. If 10,000 households shifted even one monthly purchase to a local provider, the cumulative effect would measure in millions of dollars of retained economic activity over a year. And if even a fraction of that is directed toward services, the impact becomes even greater, because service-sector spending has some of the highest local retention rates of any business category³.
This research began as a personal project – a way to understand the economic patterns shaping Josephine County and to illuminate opportunities that often go unnoticed. As a local business owner, researcher, and community member, my goal is to present this information clearly and usefully: not to critique individual choices, but to highlight how small, intentional shifts can strengthen the place we live.
In the sections that follow, we’ll explore how money moves through key areas of daily life – grocery shopping, eating out, home improvement, services, agriculture, and even digital presence – and how each of these categories can either weaken or reinforce our local economic foundation. The purpose is simple: to give Josephine County the information needed to make confident, empowered decisions that keep more dollars circulating here at home.
Retail Leakage – Where Grocery Dollars Go
Where we buy groceries shapes how much money stays in Josephine County – and even small shifts create measurable economic gains.
Grocery spending is one of the largest recurring expenses for most households, which makes it a major factor in how money circulates within a community. Yet not all grocery purchases contribute equally to the local economy. The difference depends on ownership structure, sourcing, and whether profits remain in Oregon or flow to out-of-state corporate systems.
Large national grocery chains typically retain only 10–15¢ of every dollar locally¹. The rest leaves the community through corporate profit extraction, national supply contracts, centralized distribution networks, and out-of-state shareholders. This pattern creates a predictable form of leakage: the more reliant a community becomes on national chains, the less capacity it has to grow its own economic base.
Locally rooted options keep far more money circulating close to home. Stores like Cartwright’s, the Grants Pass Growers Market, and even Grocery Outlet create stronger local retention. Grocery Outlet is not fully local, but its operator-owned model keeps more profit in the Rogue Valley than national chains. True local markets, such as Cartwright’s, return even more by sourcing locally, paying local wages, and reinvesting in community services and suppliers.
Local growers markets and direct farmer transactions produce the strongest retention rates of all. Dollars spent with local farms move through wages, farm supplies, local vendors, and regional services – supporting a chain of interconnected small businesses rather than leaving the state on day one. Research consistently shows that local food systems produce two to seven times more local economic activity than purchases made through national distributors².
Small shifts compound. Ten thousand households is not an abstract number – it is roughly the scale of daily life in Josephine County. If those households redirected even one routine purchase per month toward a local provider, the region would not merely “support small business.” It would alter the velocity of money itself. Grocery dollars, service calls, meals, and repairs would stop exiting the county on first contact and instead begin circulating through wages, suppliers, rent, and reinvestment³. The question is not whether this matters. The question is how large the effect becomes when it is repeated at scale.
This is not a call to abandon convenience or affordability; it is simply a recognition that everyday choices have cumulative influence. Choosing Cartwright’s once a month, adding the Growers Market to the weekly routine, or supporting a local operator-run Grocery Outlet makes a meaningful difference without requiring major lifestyle change.
Restaurant Leakage – Local Multiplier vs. National Chains
Where we choose to eat determines where our dollars live – and few spending categories show the impact of local retention as clearly as restaurants.
Restaurants play a major role in local economic circulation because they combine three powerful factors: labor, sourcing, and ownership. Each of these influences how many times a dollar moves through Josephine County before leaving. When these components are local, the effect is multiplied. When they are tied to national chains, the economic benefit dissipates quickly.
National chain restaurants operate on franchise models that send a portion of every sale to corporate headquarters in the form of royalties, brand fees, and national advertising funds. For chains like Buffalo Wild Wings or KFC, these combined fees typically account for 8–9% of gross sales¹, not including profits that also leave the region. Combined with national supply contracts and centralized food distribution, this results in a relatively low economic multiplier – averaging 1.1–1.2×, meaning only a small portion of each dollar continues circulating here².
Local restaurants, by contrast, consistently produce far stronger economic outcomes. Most independent restaurants source at least some ingredients from local suppliers, hire local employees, rely on local services (like trades, marketing, cleaning, and pest control), and reinvest their profits into the community where they live. The result is a significantly higher local multiplier – typically around 1.5×, and often more when they purchase locally³.
Two local businesses illustrate this difference clearly:
Cartwright’s Taprock Northwest Grill
Taprock is locally owned and rooted in the Rogue Valley. Their staff are local, their spending is local, and their profits stay here rather than being distributed to distant shareholders. Even when sourcing through regional distributors, the ownership factor alone keeps far more money circulating in Josephine County compared to a national chain.
Blaze-N-Monkey’s Food Truck
Food trucks are uniquely powerful in local economies because their operational structure keeps nearly every dollar local. Ingredients, fuel, repairs, licensing, equipment, and labor all originate within the region. A single thriving food truck like Blaze-N-Monkey’s can produce several layers of reinvestment simply by operating here – and because their supply chain is so compact, very little money leaves the area.
When you compare a national chain’s 1.1× multiplier to a local restaurant’s 1.5× multiplier, the difference becomes dramatic over time. If a household spends $200 per month on dining out, switching even one meal per month to a local restaurant creates more local wages, more vendor purchases, and more community-level reinvestment – all without changing total spending.
This section is not about eliminating national chains. Rather, it’s about recognizing that locally owned restaurants are economic engines, and small shifts in where we eat can generate outsized benefit for our region.
Construction & Home Improvement Leakage
Local contractors keep significantly more money circulating in Josephine County than national home-improvement chains, because nearly every dollar they earn becomes income, supplies, services, and taxes that stay right here in the Rogue Valley.
Construction and home improvement spending is one of the most powerful yet overlooked ways communities retain economic value. When residents hire a local contractor, almost all of that money enters a highly local supply chain: wages for local workers, purchases from nearby suppliers, subcontractor payments, fuel from local gas stations, local insurance carriers, and reinvestment into local services. This creates multiple rounds of circulation, which economists identify as a strong multiplier effect.
In contrast, big-box home improvement stores and national installation services operate through centralized supply chains. While they employ local workers and pay local property taxes, the majority of each dollar leaves the region through national contracts, corporate profits, and out-of-state distribution networks. These companies are convenient and necessary for materials, but they do not create the same economic lift as hiring a local contractor.
Research from regional economic studies shows that local construction and trade spending retains 45–70¢ per dollar through wages, services, and subcontracting, while big-box purchases retain **only 10–20¢**¹. That difference compounds rapidly when applied to home improvement projects, which often involve large dollar amounts.
Service Sector Leakage – The Hidden Local Powerhouses
Service businesses keep more money in the community than almost any other category because their value comes from local skill, labor, and ongoing relationships rather than imported products.
When people think about “shopping local,” they often imagine groceries, shops, or restaurants. But the service sector-electricians, cleaners, pest control technicians, contractors, landscapers, bookkeepers, mechanics-is where local economies experience the highest retention of dollars. That’s because service work is powered almost entirely by local labor rather than products manufactured elsewhere.
Economists have long noted that service businesses often retain 60–80¢ of every dollar within the community through wages, subcontracting, insurance, fuel, local suppliers, and the personal spending of employees¹. By comparison, national service franchises frequently return far less: their fees, franchise royalties, national marketing funds, and required vendor contracts send money out of state before it even touches the local economy².
Josephine County’s service businesses are the backbone of local economic resilience. They are often family-owned, hire local workers, rely on local vendors, and spend their profits here. Even small service businesses create persistent, multi-layered circulation loops because their operations require ongoing, localized activity.
To illustrate this, here are two Rogue Valley Business Collective members whose spending patterns show the power of local services:
Valley Inspections & Pests – Local Problem-Solvers Who Keep Dollars Local
Valley Inspections & Pests shows how independent service businesses strengthen the local economy. The company hires local technicians and relies on local fuel, insurance, accounting, and suppliers. Because revenue stays in Josephine County instead of leaving through franchise fees, more dollars circulate here. Pest control is also recurring work, so VIP’s operations create continuous local loops that support many other small businesses.
Three Trees Cleaning – Local Jobs, Local Wages, Local Retention
Three Trees Cleaning has a simple but powerful economic impact. The company works entirely within local homes and rental properties. It hires local employees and pays wages that stay in the Rogue Valley. When possible, it buys cleaning supplies from local stores and depends on local vendors for equipment, fuel, bookkeeping, and marketing.
Cleaning services have one of the highest wage-to-expense ratios, meaning most customer dollars go directly into paychecks that are spent in local stores, restaurants, and services³.
Why the Service Sector Is the Economic Engine of Josephine County
Service companies:
- Hire local
- Pay local
- Purchase locally
- Maintain long-term client relationships
- Re-spend profits locally
- Use local trades and professional services (accountants, designers, insurance agents, repair shops)
- Generate recurring transactions rather than one-time sales
This creates stacked layers of economic retention that national franchises and out-of-town service networks simply cannot replicate. Local service companies are, dollar for dollar, among the most economically productive businesses a community can support⁴.
That is why even one household choosing a local pest company, a local cleaner, a local electrician, or a local carpenter over a national service provider has a measurable economic effect. The money stays here, moves here, and strengthens Josephine County with every loop.
Food Systems, Agriculture & Grants – The Wins We Already Have
Josephine County’s food system already demonstrates how local spending and local support programs reduce economic leakage – and how targeted efforts can turn outside funding into lasting community value.
Not all economic news is about loss or leakage. In fact, one of the strongest examples of local economic resilience in Josephine County comes from the regional food and agriculture sector – particularly through farm-to-school initiatives, community partnerships, and grant-funded programs that redirect external dollars into local farms and local wages.
Programs such as the Oregon Farm-to-School and School Garden Network, along with regional collaborators like the JoCo Farm Collective and OSU Extension, illustrate how local food systems retain a far higher share of economic value within a community. OSU Extension’s economic impact analysis shows that locally produced food can retain roughly 76 cents of every dollar in the local economy-compared to only about 28 cents when those same dollars flow through imported or non-local food systems.³ When multiplied through wages, local services, and farm purchases, each dollar often generates $1.00–$1.30 in total local economic impact².
These programs demonstrate a critical lesson: when money begins local and stays local, it compounds, but when money begins elsewhere and stays local through targeted purchasing, the effect is even greater. Grants pull in external funding – money that did not originate in Josephine County – and transform it into local wages and purchases that ripple outward long after the initial program ends.
Local agriculture strengthens the economy by:
- Supporting farmers directly through ingredient purchases
- Creating markets for fresh produce
- Relying on local drivers, distributors, and processors
- Retaining profits inside the region
- Increasing food security and lowering dependency on imports
Even businesses like Three Little Peppers Sauce Co. and other small food producers benefit indirectly from these systems, as stronger local agriculture creates more availability of ingredients, more local partnerships, and more opportunities for value-added products that keep food dollars circulating in the Rogue Valley.
Read more about how our farmers struggle within a system that wasn’t designed for them:
Southern Oregon Farmers Are Not The Problem, The System Is.
Digital Identity & Local Visibility – The Infrastructure People Forget
In 2025, a website isn’t just a marketing tool – it’s economic infrastructure. When local businesses lack digital visibility, money leaks out of the community not because residents prefer national brands, but because they never see the local options in the first place.
Most people don’t think of websites, online listings, or digital credibility as part of a local economy. Yet, in an era where almost every purchase begins with an online search, digital identity determines who gets found and who gets overlooked. And when local businesses can’t be found, customers unintentionally send their dollars to national chains without ever realizing a local provider existed.
Across Oregon, there are 409,958 small businesses³. Of these, approximately 73% have a website, and 80–90% of those have their own custom domain, which is essential for being indexed, trusted, and discoverable⁴. However, visibility is not guaranteed. A website without search optimization, schema markup, or a functioning Google Business Profile (GBP) may as well not exist online – and in that vacuum, large national brands dominate search results through scale, ad spending, and algorithmic presence.
This becomes a form of digital leakage:
Not because residents choose national services intentionally, but because algorithmic visibility hides local competitors. When a Grants Pass resident searches for an electrician, pest control, cleaning service, or contractor, Google will show whichever businesses have strong digital infrastructure. If national chains outrank local businesses, local dollars leak out simply because the digital pathways aren’t aligned to keep them here.
Local visibility works the same way traditional infrastructure works:
- Roads determine where people travel.
- Maps determine where people go.
- And digital infrastructure determines which businesses the community sees.
This is where community-built systems help fill the gap. The Rogue Valley Business Collective (RVBC) strengthens local visibility by ensuring that legitimate, verified small businesses are findable, linked, structured, and connected online. It creates a digital “cluster effect,” where multiple local businesses strengthen one another’s presence through consistent data, clean structure, and cross-linking.
Similarly, improved digital identity work – like accurate GBP listings, structured data markup, locally hosted websites, and transparent online footprints – ensures that money meant to stay in Josephine County actually reaches local providers. And while RMS contributes to this landscape, it is best understood not as a marketing firm but as a piece of economic infrastructure that helps small businesses take their rightful place in the local search ecosystem.
Digital visibility is not glamorous. It is not emotional. But it is quietly one of the strongest tools a community has to prevent economic leakage, because it ensures that local residents see local options first – the way it should be.
Plugging the Leaks – What Communities Can Do
Preventing economic leakage doesn’t require perfection or major sacrifices. In reality, the community becomes stronger when thousands of small decisions gently shift toward local businesses.
One of the most common worries people express when learning about economic leakage is the belief that they must completely overhaul their spending habits to make a difference. Fortunately, the research shows the opposite. Local economies respond dramatically to small, aggregated shifts, especially when those shifts involve service-sector spending, home improvement decisions, or recurring needs like groceries and dining.
The principle is simple: you don’t need to choose local every time for the community to benefit – you just need to choose local more often than before.
Consider a single farmers market visit. If 10,000 households each spent $100 locally just once in a season, that is $1,000,000 injected directly into Southern Oregon producers. Local businesses retain roughly 45-70 percent of each dollar, meaning $450,000 to $700,000 of that million stays in the region on the first pass alone.
Those dollars then circulate through wages, rent, equipment, and local services. Applying a conservative 1.5x local economic multiplier, that single community action becomes $1.5 million in total regional economic activity. The same $100 supports multiple households before it ever leaves the county. Extend that behavior across months, categories, and services, and the scale of what “small” actions can do becomes unmistakable.
Because this research is meant to be empowering, not demanding, the following ideas are offered gently – simple reminders that can help the community keep more of its own money at home:
- When you need a service, check for a local provider first.
Electricians, pest control companies, cleaners, carpenters, plumbers, and other trades keep 60–80% of each dollar circulating locally². - When eating out, incorporate a local restaurant into your routine.
Even one visit per month to businesses like Taprock, Blazin’ Monkeys, or any family-owned restaurant increases local multipliers. - When buying groceries, blend convenience with local choices.
Maybe it’s Cartwright’s once a month, the Growers Market when in season, or your nearby operator-run Grocery Outlet. - When starting a project, consider local trades first.
Joseph R Ward Expert Carpentry & Construction, Next Step Electrical Solutions, and many other local trades move money through dozens of local hands before a dollar exits the region. - When possible, support local producers and small-batch makers.
Farmers, food artisans, and small producers circulate nearly all revenue inside the community.
These actions aren’t rules – they’re opportunities. Most people are already making many local choices without realizing their impact. This section simply connects the dots between individual action and community strength.
And importantly, these shifts also make Josephine County more attractive for future investment. When local businesses thrive, they create the foundation for larger community projects – including the possibility of new gathering spaces, entertainment venues, expanded markets, and the long-term vision of a local grocery store or skating rink.
Economic resilience is built from the bottom up. A community doesn’t become stronger because a few people make perfect choices – it becomes stronger because many people make small, sustainable choices together.
Conclusion – The Community We Build When We Choose Local
Local economies are shaped by everyday decisions. When we choose local more often, even in small ways, we build a stronger, more resilient Josephine County – one where opportunity flows through the hands of the people who live here.
Economic leakage can feel like an abstract concept until you see how clearly it appears in groceries, restaurants, services, trades, and even digital visibility. But the lessons throughout this paper point to something much more encouraging: none of this is out of our control. In fact, our community already has the tools, the businesses, and the momentum needed to keep more of our money circulating at home.
Local agriculture programs already show strong retention rates. Local restaurants, trades, and service businesses add even more value by keeping money circulating through the region. The Rogue Valley Business Collective helps residents find and support these businesses. Digital identity work across the valley also builds long-term infrastructure that quietly reduces leakage.
This research began with a simple question: Where does our money go?
The answer revealed something deeper: our dollars mirror our values. When we choose local businesses, we invest in our neighbors, families, schools, and the long-term health of Josephine County. We support a stronger job market, more resilient community services, and opportunities that stay here instead of drifting outward.
The most important point is that nobody has to be perfect. You don’t need to shop local every time. What matters is that small decisions add up. When even 10% of households shift one purchase a month, the impact grows through local wages, suppliers, reinvestment, and future community projects.
Small choices build big futures.
So whether it’s a grocery run, a dinner out, a pest control visit, a cleaning service, an electrical upgrade, a carpentry project, or the simple act of checking for a local provider before choosing a national one – each decision carries weight.
Josephine County’s future is not determined by outside forces. It’s shaped by us. By the people who live here, work here, raise families here, and want to see this region thrive.
When the opportunity comes, choose local.
Not out of pressure, but out of possibility – the possibility of building the kind of community we all want to live in.
If you liked this article, check out our next blog: Southern Oregon Farmers Are Not The Problem, The System Is.