What Are Ithaca Hours?
The Ithaca HOUR is a form of local currency issued and used in the locality of Ithaca, NY. It is designed to encourage patronage of local businesses in Ithaca and surrounding communities and to prevent that money from leaving the local economy. The United States government does not back it, and companies in Ithaca are not required to accept it.
The value of one HOUR is pegged at $10 and is a time-based currency system where one hour of any work is equivalent to another hour of work. Today, there are over $100,000 worth of Ithaca Hours in circulation.
- Ithaca HOURs are a local, time-based currency system established in Ithaca, NY in 1991.
- The scheme is intended to encourage local economic growth by keeping the currency bounded by the community.
- One Ithaca HOUR is valued at US $10 and is generally recommended to be used as payment for one hour's work, although the rate is negotiable.
Understanding Ithaca Hours
Ithaca HOURS were first introduced in 1991 and remain the oldest local currency of its kind still in use in the United States. Local currencies were mostly outlawed by Congress in the late 18th century but enjoyed a brief revival during the Great Depression. The revival is due to communities attempts to extricate themselves from the troubled national economy.
In 1991, Paul Glover launched the new Ithaca currency and set the value of an HOUR at $10. This new value was the approximate average hourly pay in Ithaca at the time. Glover hoped that the HOURS project would keep money in the local economy, and avoid the social and economic costs which he associated with the increasingly global financial system. Glover promoted the HOURS aggressively, and by the end of 1991, about 20 local businesses had pledged to accept the new currency. That number grew into the hundreds during the 1990s.
Since then, dozens of U.S. communities have followed Ithaca’s lead and introduced local currencies designed to promote local business and limit the movement of that currency to a particular locality. In most cases, the local currencies are intended to operate alongside U.S. dollars. Like social media today, these currencies benefit from the network effect, as more people and businesses use the system, the benefits that they can derive increase.
Ithaca Hours and Online Payments
The HOURS system relied more fundamentally on the evangelism of its founder, who worked full-time to educate residents and business owners of the uses for HOURS.
The rise in electronic payment systems, plus Glover’s departure from Ithaca, contributed to a steady decrease in the use of HOURS in the early 2000s. Efforts to revive the currency have yet to take hold. In recent years, an organization known as Ithacash has attempted to introduce internet-based local money that they have named Ithaca Dollars. This currency has not been issued in physical form. Ithacash operates an online marketplace where users can transact in Ithaca or U.S. dollars. The business is attempting to take advantage of the networking power of the internet to build a sustainable community of merchants and individuals.