Fixing New Bedford’s cash flow problem to create a booming economy

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By Michael Silvia

If you run a business then you know that positive cash flow is critical to running a growing, successful business. This is also true for running a town or city like New Bedford.

Economics can be boring, so I’ll keep it simple. If you have more money flowing into New Bedford than flowing out, you have a positive cash flow. More cash means higher wages and more jobs.

A major contributor to New Bedford’s high unemployment and low income is too much cash flowing out of the city. Reversing the trend involves two of the largest spenders in New Bedford: the fishing industry and the City of New Bedford. It also starts and ends with you.

Let’s cover each of these three points in detail and what needs to happen.

1. The City of New Bedford needs to keep more money in New Bedford

New Bedford Mayor Jon Mitchell proposed a $312 million FY2017 budget in May. While it’s not possible to spend every penny in the city, the goal should be to keep as much money as possible in New Bedford. While this seems obvious, it needs to be happening more.

A few years ago, the City of New Bedford spent $100,000 on a new website. It was a good move as the older website was outdated. The big issue was the website was built by a company outside of New Bedford. No one in New Bedford could build a Word Press website? I know plenty of New Bedford residents that can. That’s $100,000 that flowed out of New Bedford, but didn’t have to. How many well paying contracts like this are sent out of New Bedford?

If you follow the New Bedford City Council monthly meetings you’ll notice a lot of high paying jobs going to non-New Bedford residents. Residency waivers are requested by the mayor’s office and approved by the New Bedford City Council throughout the year. A lot of them.

While it is understandable to hire the best qualified person for the job, is the New Bedford government doing their best to train New Bedford residents for the jobs of the future? Is New Bedford communicating these openings to the largest audience possible? Every time a job goes to a non-resident, are leaders asking why?

If you jump into the job waiver rabbit hole you’ll likely find the percentage of non-residents taking high paying jobs increasing, not decreasing. The city needs to disseminate these jobs to a wider New Bedford audience and get New Bedford residents qualified for future jobs. Ten jobs paying $50,000 a year means $500,000 is flowing out of the city; 100 jobs equates to $5 million negative cash flow. The money to pay these jobs comes out of property and other taxes paid by New Bedford residents. The City should do everything possible to give the people paying taxes the jobs.

2. The New Bedford fishing industry needs to be more locally owned and spend more of the profits here.

I’ve always been baffled that New Bedford no longer has a scallop festival. According to the official Port of New Bedford website, New Bedford is America’s #1 Fishing Port with fish landings valued at $369 million. How much of that $369 million stays in New Bedford? That’s $50 million more revenue than the entire City of New Bedford FY17 budget.

How much of the Port of New Bedford is owned by New Bedford residents? How much of the $369 million stays in New Bedford? Without a legitimate study, it’s impossible to provide accurate answers. Why hasn’t the City of New Bedford done a study like this to see if there are ways to keep as much of the cash in New Bedford?

There is no question that the fishing industry plays a significant, positive role in New Bedford’s economy. It’s a valuable and loved industry. But how many New Bedford residents own a plant or boats? Or fill the highest paid positions like boat captains? How much of the profits are put back into New Bedford? If the answer is “very few or little” then our harbor is benefiting more people outside the city than inside it.

3. New Bedford businesses and consumers need to spend their money on local companies

Here’s where YOU come in. Your local government and fishing industry won’t change anytime soon. Even if they did, it would take years to change how they operate. The good news is that YOU can make a difference today.

Every New Bedford business and resident needs to make a conscious effort to spend their money with companies that keep their profits local. Eat at restaurants that are owned locally, buy their food locally and spend their profits locally. Businesses need to do the same; review your spending and shift your costs to local business. Own a restaurant? Use local farms more than Sysco. Advertise? Ditch the billboards and corporate print and radio. Spend your money with local media that keeps their money local like New Bedford Guide, Neighborhood News and The Wanderer.

Corporate owned businesses pay minimum wage, mostly hire part-time workers and send their profits out of state. If every resident and business shifted their spending local companies that spend their profits locally New Bedford’s economy would boom, wages would rise and more jobs would be creative. If the City of New Bedford and fishing industry followed, New Bedford’s economy could match the days of Whaling and textiles.

About Michael Silvia

Served 20 years in the United States Air Force. Owner of New Bedford Guide.

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3 comments

  1. Your ideas are all counterproductive. How about this? New Bedford, Dartmouth, Fairhaven, Fall River, Boston, and everybody else hire the best people for the job no matter where they live?

  2. While this is a nice thought, governmemt and business are two different things, and running a business vs. running a government is not the same. A government funds a lot of things that don’t produce cash or profit for said gocerment. They run much more like a non profit than a for profit company where cash flow is king

  3. I don’t always agree with your political point of view, but I support you 100% on this.

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