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Lamar County - Paris Economic Development Plan <br />However, before the community can support improving a local economy, it first needs to know <br />what one is.... <br />What is a "Local Economy ?" <br />A local economy is a geographic area in which a preponderance of the population lives and <br />works, earns and spends. The place of work is where the wealth is created; the place of <br />residence is typically where the wealth is spent. <br />Money flows into the local economy as a result of the activity of the "primary industries." <br />Primary, or contributory industries, are those which sell their goods or services outside the <br />geographic boundaries of the local economy, thus importing wealth to the area. <br />The imported wealth or money is mixed and churned within the economy, circulating from <br />business to business, person to person, until it is eventually consumed and leaves the area. <br />A local economy will grow and expand, decline and fall, in direct proportion to the amount of <br />wealth being imported to the area. A vast majority of the businesses, as well as their employees, <br />depend upon the wealth being imported to the area by the primary industries. These are known <br />as dependent or consumptive industries. Typically, for every one primary job created, there are <br />between two and three dependent jobs also created. <br />The "quality" of a local economy, which determines the standard of living for the people who <br />live and work in an area, is determined by the wages paid within the primary industries. For the <br />most part, the average wages paid to workers employed in the dependent jobs will approach but <br />rarely exceed the wages paid in the primary industry sectors. <br />If the primary jobs are "low- wage," then the overall economy will be a low -wage economy. If <br />the primary industries are high -wage, then the overall standard of living in the area will be pulled <br />upward toward the "high- wage" level. <br />Local economies with multiple (diversified) primary industries have the best chance of having a <br />stable economy over an extended period of time. Typically, if one of the contributory industries <br />declines, there are others which are still contributing, perhaps even growing, and thus preventing <br />a significant economic decline in the area. <br />Areas which depend upon one or two primary industries are in a precarious position. Should <br />their main contributor fail, the entire economy will collapse. <br />An area will grow in size by adding more primary industry jobs, which import more money into <br />the economy. <br />An area will grow in "quality" if a preponderance of the new primary jobs pays a wage higher <br />than the area average. <br />Paris Economic Development Corporation Page 8 <br />