Amid the grim reality of COVID-19, one of the rare feel-good storylines has been a local business that changes its manufacturing setup in an immediate response to the pandemic. A craft gin distillery in Vermont starts producing hand sanitizer for the local food bank and first responders; a veteran-owned t-shirt manufacturer in Georgia switches to making face masks; and so on.

As gratifying as it may be to see entrepreneurs stepping up to the plate to meet the needs of the community during a crisis, these types of one-off pivots are not a long-term strategy. As the owner of the Georgia business told FOX News, “I want to return to making T-shirts. I do not want to be in the mask business.”

The core problem is that in general, the U.S. does not produce its own goods locally for local populations. Face masks are just one product getting all the attention now — and our mask shortage has undoubtedly accelerated the spread of the pandemic, as pointed out in the New York Times. While the Times quotes one medical equipment executive who says that 80 percent of the world’s supply of medical face masks are manufactured in China, this is not a “the U.S. gets everything from China” issue. The U.S. does, in fact, continue to manufacture everything from toilet paper to automobiles. It’s just that in such a geographically huge country, with variable climates, growing seasons and resources, not all products are manufactured close to where people need to use them. And so cities and regions import goods, from coast to coast. If you’re in Michigan and you want tomatoes in February, you’ll likely buy them from a grocery store that imported them from California or Arizona.

And that creates all the costs — economic and environmental — of producing, growing and transporting, across thousands of miles, everything from vegetables to medical equipment. Money paid for the products and producers exits the local community in the millions — sometimes billions — of dollars. And the carbon footprint alone of a single truck carrying 2,000 pounds of cargo 1,000 miles is a whopping 3.24 metric tons of CO2. The cost of importing everything we need, even domestically, quickly adds up.

“I think what we’re seeing, especially now, is the need to adapt and look at our existing resources,” says Rachel Moriarty, Director of Operations at The Schumacher Center, a “think and do tank” that advocates for locally based, just and sustainable economies, and creates models that can be implemented elsewhere. “[Right now,] there’s a run on toilet paper everywhere. Is there an opportunity to think proactively, prior to something catastrophic, to think about needs in a new way? Like [starting] local toilet paper companies?”

“We are so dependent on outside forces, and we are exporting [our] money to them,” says Moriarty. “‘What if we produced locally, kept money locally, so retail could keep local? … [Then] everybody starts to understand it’s not us versus them, it’s helping our neighbors adapt to needs.”

Against this backdrop, the import replacement movement is thinking about re-localization: how to bring back the goods and services communities need, while building up and keeping wealth within those communities.

The concept of import replacement is a city-specific version of the larger economic notion of import substitution. Import replacement was originally posited by activist Jane Jacobs in her 1985 work “Cities and the Wealth of Nations.” Susan Witt, executive director of the Schumacher Center for a New Economics, explains in an essay titled “The Grace of Import Replacement:” “Jacobs believed that the best way to achieve such sustainable economies is to examine what is now imported into a region and develop the conditions to produce those goods from local resources with local labor.” Re-localization keeps dollars in the community, with local businesses that are small and accountable and responsible to their employees as well as the neighborhoods they serve.

Evergreen Cooperative Laundry, a 100-percent worker-owned and worker-managed company, processes about 20 million pounds of laundry annually, most of it for anchor institution the Cleveland Clinic. (Credit: Democracy Collaborative/John Duda)

Is import replacement, then, the solution to scarcity, job loss and economic downturn, not only during a global crisis such as COVID-19, but in general? At a time of catastrophic unemployment, can re-localizing the means of production create the products and jobs we need and generate local economic growth?

In Cleveland, Evergreen Cooperatives has brought home multiple businesses and millions of dollars through enterprises including Evergreen Cooperative Laundry and Green City Growers. In the Pioneer Valley of Western Massachusetts, Wellspring Cooperative meets local food needs through their Wellspring Harvest Greenhouse. And in Albuquerque, New Mexico, the city government has demanded that their own departments purchase as much as they can locally. In each of these instances, places, people and local governments are figuring out how to bring back the local businesses that support the community, keeping the wealth at home and lifting up entire neighborhoods that might otherwise have been sacrificed at the altar of multinational capitalism.

Worker-Owners Set the Standard in Cleveland

“The example we reference regularly is of the Evergreen Cooperatives in Cleveland. A project of the Democracy Collaborative, the Evergreen coops feature a solar panel factory, greenhouse, and a laundry that services local healthcare institutions,” says Moriarty. Evergreen’s Fund for Employee Ownership also helps convert small businesses into worker-owned cooperatives, a growing trend in the “silver tsunami” movement of retiring baby boomers whose children do not want to take over the family small business.

Founded 20 years ago, Democracy Collaborative has been thinking about how to build a national, truly democratic economy where ownership is broadly held, says Ted Howard, its co-founder and director. The current economy common in the United States is extractive, he says: “highly productive, it keeps producing but not creating substantial wealth. It’s extracting and concentrating in fewer and fewer hands.”

So, they developed an alternative economic theory of community wealth building, part of which has manifested in building worker cooperatives that serve as import replacement and re-localization of industries, in collaboration with deeply rooted anchor institutions, such as hospitals. Institutions that are “not going to pick up and go to China,” Howard says.

The goal is to leverage the power of these anchor institutions as a reliable, built-in market to create community wealth and local opportunity. Anchor institutions, Howard says, make up $1.2 trillion dollars, or 9 percent of the US GDP. That’s a substantial sum to keep localized.

What’s more, Evergreen’s worker cooperatives focus their hiring on the unemployed and formerly incarcerated returning citizens, and they prioritize infrastructure support such as public transportation access. The shift to re-localization and import replacement is threefold, encompassing local hiring, local investment, and cultivating a local supply chain. The business models of these worker cooperative companies are specifically designed to supply local institutions with what they need.

John McMicken, CEO Of Evergreen Cooperative Corporation, notes it was University Hospitals, Case Western University and Cleveland Clinic coming together to start Evergreen, in their quest to fulfill their needs locally. They hired the Democracy Collaborative to research the hospitals and the university to determine how much money they were spending annually on goods and services outside Ohio, and what those businesses were. The high-level conclusion, says McMicken, was that $2 billion was leaving the state for needed goods and services. The question became, what businesses could they make viable locally, to bring that $2 billion a year home, turning it into local wealth building.

The Evergreen Cooperative Laundry was their first project, founded in 2009 with the Cleveland Clinic as an anchor institution. It employs 150 people, many formerly incarcerated, with profit sharing and good benefits, and it does all the laundry for the hospital — 20 million pounds of sheets and towels annually. Before Cleveland Clinic made their shift to working locally, the laundry contract was held by Sodexo, a multinational with corporate headquarters in France.

Evergreen Cooperative Laundry also sources locally as many products as it can, including its laundry chemicals, to keep money in the community. And the environmental impact is significant as well. Before going local, Cleveland Clinic was trucking their laundry to Pennsylvania, 150 to 200 miles away. Keeping the laundry in Cleveland reduces the carbon footprint on the transportation side, with the added benefit of reducing fuel costs as well; each of the two laundry facilities is not more than three or four miles from the hospital.