Ithaca HOURS Local Currency: History, Functionality, and 2025 Insights

What Are Ithaca HOURS?

Introduced in 1991, Ithaca HOURS was a pioneering local currency designed to boost Ithaca, New York's economy by encouraging residents and businesses to trade goods and services within the community. Each HOUR was pegged to $10, representing one hour of labor, creating a time-based currency system that valued work equally regardless of the type of service.

Key Highlights

• Launched in 1991 in Ithaca, New York, as a community currency.
• Designed to stimulate local economic activity by keeping currency circulation within Ithaca.
• One Ithaca HOUR equaled $10 and corresponded to an hour of work.
• Phased out by the 2010s but remains a significant example of local currency innovation.

How Ithaca HOURS Worked

Created by activist Paul Glover, Ithaca HOURS introduced $110,000 worth of currency into circulation to empower local trade and reduce reliance on the global financial system. This currency was time-based, with each HOUR representing an hour of labor valued at approximately $10, reflecting the local average hourly wage at the time.

Initially, about 20 businesses accepted HOURS, growing to hundreds as the currency gained traction. Participants received HOURS as incentives to join and list their services, fostering a strong community network. However, the currency was restricted to Ithaca and could not be used outside the city limits.

Important Considerations

Unlike government-issued money, Ithaca HOURS were not legal tender and participation was voluntary. Transactions involving professional services were taxable under U.S. law, while exchanges for local goods and services were generally exempt.

Benefits of Using Ithaca HOURS

The currency offered multiple advantages to Ithaca’s community, including:

• Supporting and promoting local businesses.
• Encouraging residents to shop locally and strengthen the economy.
• Increasing the local money supply and boosting economic resilience.
• Raising the effective local minimum wage to $10 per hour.
• Creating new job opportunities and business ventures.
• Lowering transportation costs by reducing dependence on imports.
• Providing interest-free loans and grants to non-profit organizations.

Comparing Ithaca HOURS with Other Local Currencies

Inspired by Ithaca, many U.S. and Canadian communities developed their own local currencies to promote economic sustainability. These currencies typically coexist with national currencies and gain value through widespread local adoption.

For example, the Calgary Dollar, established in 1995 in Alberta, Canada, functions similarly by allowing residents and businesses to trade locally either online or in person.

Quick Fact

Ithaca HOURS facilitated zero-interest loans ranging from $50 to $30,000, supporting local entrepreneurs and organizations.

The Decline of Ithaca HOURS

Despite initial success with hundreds of active users and extensive listings, Ithaca HOURS gradually declined in the 2000s. The departure of founder Paul Glover and the rise of electronic payment systems led to reduced participation. By the 2010s, the currency was phased out.

Efforts to revive Ithaca HOURS emerged in 2019, involving local businesses and nonprofits, but no definitive relaunch has occurred. Additionally, Ithacash attempted to create an online version called Ithaca Dollars, but the project ceased activity by 2017.

Understanding Local Currencies

Local currencies are typically issued by communities or organizations to encourage spending within a specific area. While exchangeable for national currencies, they are not government-backed and rely on community trust and participation.

Should You Withdraw Local Currency?

When traveling internationally, withdrawing local currency is beneficial to avoid unfavorable exchange rates. However, within U.S. regions issuing local currencies like Ithaca HOURS, U.S. dollars remain more widely accepted and practical.

Are Ithaca HOURS Still in Use?

As of 2024, Ithaca HOURS are no longer accepted for transactions in Ithaca, despite past attempts to revive the currency.

Conclusion

Ithaca HOURS was a groundbreaking experiment in community-based currency that aimed to retain economic value locally and empower residents. Although it is no longer active, the concept inspired similar initiatives worldwide and remains a valuable case study in alternative economic systems. Local currencies like Ithaca HOURS operate legally alongside national currencies but lack official government recognition.

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