Spotlight Exclusives

Street Vending and the American Dream

Dick M. Carpenter II, Institute for Justice Dick M. Carpenter II, Institute for Justice, posted on

When Silvio Membreno came to the United States legally from his native Nicaragua in 1998, he sought better opportunities for his young family. The 36-year-old never imagined he would leave his home country, but years of war, corruption, dictatorship, and economic turmoil convinced him he couldn’t raise his family there.

Upon arriving in Hialeah, Florida, Silvio worked in construction but found it difficult to balance work against his children’s needs. As he drove between construction sites, he noticed Hialeah’s street vending scene and came to see it as a way to provide for his family while enjoying the flexibility he needed as a single father. He also identified a market gap for quick-service, fresh-cut flowers. Soon, Silvio was vending on the side, and eventually he left construction altogether to operate a successful vending business full time.

Throughout America’s history, a version of Silvio’s story has been told many times over. For people with ambition and an entrepreneurial spirit but few resources, vending has long offered a way to climb the economic and social ladder. But as a 2011 Institute for Justice report documents, cities have increasingly sought to restrict, if not eliminate, the vending industry through burdensome regulations. These restrictions not only undermine a key path of upward mobility, but also inhibit an industry that brings clear benefits to local economies.

Although the purported rationale for all of this regulation is public health and safety, the true motivation is more often to protect brick-and-mortar business owners from perceived competitors. Indeed, many regulations lack even a fig leaf to hide their anticompetitive purpose. For example, until recently, Hialeah made it illegal for vendors to work within 300 feet of any store selling “the same or similar” merchandise.

Rather than recognizing vending as a legitimate business to be encouraged and vendors as small business owners to be applauded, cities too often consider them a nuisance, an economic problem to be fixed. However, the evidence tells a different story.

For our recent report – Upwardly Mobile: Street Vending and the American Dream – we surveyed 763 licensed vendors, asking questions about them and their businesses. We also gathered detailed data in New York City that enabled us to estimate the vending industry’s economic contributions. The results show that, far from being a nuisance, vending and vendors contribute to vibrant streets and economies.

First, vending offers an accessible avenue to entrepreneurship, especially for immigrants, minorities, and those with less formal education. Like Silvio, 96 percent of vendors own their businesses. More than 50 percent of vendors are immigrants, and the average immigrant vendor has been in the United States 22 years—even longer than Silvio. Like the cities they serve, vendors are diverse: 62 percent are persons of color. Almost 30 percent didn’t complete high school, and 63 percent completed no specialized training before becoming vendors.

Second, despite having less formal education, vendors are successful, hard-working business owners and job creators—just the people cities should welcome with open arms. Silvio, for example, works seven days a week. He begins his day at 5:00 a.m., arranging flowers to sell to drivers who wave him over while stopped at a red light or to customers who pull into the parking lot where he sets up shop. He remains in his spot until 10:00 p.m.

Silvio is no anomaly. Our study found that full-time vendors work, on average, more than 11 hours a day, five-and-a-half days a week, and three out of four part-time vendors hold a second job. Almost 40 percent of vendors employ others, and one out of three vending business owners plans to expand.

Third, through their economic activity, vending businesses can make sizable contributions to their local economies. In 2012, vendors’ contributions to the New York City economy totaled an estimated 17,960 jobs, $192.3 million in wages, and $292.7 million in goods and services. New York City vendors also contributed an estimated $71.2 million to local, state, and federal tax coffers. And all of this despite the city’s artificial caps on licenses and permits that have kept countless would-be vendors out of business and forced others to operate illegally.

Many other cities, including Los Angeles, Miami, and Chicago, likewise dampen vending’s economic potential through anticompetitive regulations. These rules not only cost cities economic activity, jobs, and taxes, but also close off an otherwise viable path to entrepreneurship and upward mobility. For cities looking to expand economic opportunities, facilitate job growth, and realize greater tax revenue, welcoming street vendors is a low-cost and potentially high-reward option.

Indeed, unleashing such economic potential is as simple as clearing away outmoded and anticompetitive regulations and opening streets and sidewalks to vending entrepreneurs like Silvio who simply want to pursue their American Dream.

To print a PDF version of this document, click here.

Dick M. Carpenter II is the director of strategic research at the Institute for Justice and a professor of leadership, research, and foundations at the University of Colorado Colorado Springs.

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