WHAT ARE THE DIFFERENCES AND SIMILARITIES IN REGULATION OF STREET VENDING IN THE TWO CITIES?
What is the Informal Sector?
The informal sector includes all workers and economic units which are not part of the regulated economic activities and protected employment relations. Certain features of the informal sector make it easier for certain groups of people to earn a living. For instance most of the jobs in the informal economy do not require many skills, thus they are labor intensive. Since workers with little or no education are unlikely to find a specialized job in the formal economy, they tend to seek employment in the informal sector. As working in the informal sector requires low skills level, starting a business there is comparatively easy and requires significantly less capital. For instance, a person with little or no education, low skill level and little savings can start street vending. However, it is highly unlikely that they would be able to own a business in the formal sector. (Bhowmik 3)
Developing countries tend to have a larger informal sector. Where the governments and the formal sector fail to satisfy the needs of the population, the informal sector emerges and provides the community with goods in short supply. It was originally believed that the informal sector is a transitory sector, which will be eventually absorbed into the formal sector as countries develop. However, today we can observe that the informal sector is growing tremendously in all countries, including developed ones (Bhowmik 4). Formal and informal economies are interdependent; the informal sector is not subject to laws binding the formal sector, and for this reason informal sector often manufactures cheaper components which are later used in the formal sector. On the other side, the informal sector relies on the formal sector for its sustenance (Bhowmik 6).
Poverty and Street Vending in “World Class Cities”
While the informal sector is unlikely to disappear, certain branches of the sector are becoming more regulated and prosecuted. This is the case with street vending. As cities grow and develop, the poor seeking employment through street vending are pushed out and denied an equal share of the city. Their businesses and their existences are criminalized. Their contributions to the city and their local communities have been ignored. In the “World Class Cities” there is no place for the poor nor their businesses. They are said to block traffic and sidewalks. They are perceived as eyesores of the urban development by the urban elites (Jhabvala 13). The poor are in every city, their informal businesses serve the local communities, as well as contribute to the development, vitality and the liveliness of the cities. Local governments of some cities have recognized the importance of their services, thus their businesses have been licensed and decriminalized. However, the situations is far from perfect.
Regulation and Licensing of Street Vending in NYC
It can not be denied that street vendors contribute to the economy of New York City. A 2012 report estimates that around 17, 960 jobs were provided through street vending, as well as 71.2 million dollars in taxes and 192.3 million dollars in wages (Carpenter, 29). However, the majority of the vendors are unlicensed, meaning that their businesses are illegal. An official NYC street vending fact sheet states that “ a person must obtain a license from the Department of Consumer Affairs. Unfortunately, with a legislative cap of only 853 licenses, and a waiting list of thousands, the chance of obtaining a license at this time is unlikely” (NYC Government 1). For food vending, one must obtain both the food vending license and a permit for the Food Unit (Cart or Vehicle) from the Department of Health. To simplify the process of obtaining the license the Department of Consumer Affairs and the Department of Health have established a combined office.