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Blocking the Paths Out of Poverty

Comment

Have you noticed how often government takes sides against the little guy?

Street vending has been a path out of poverty for Americans. And like other such paths (say, driving a taxi), this one is increasingly difficult to navigate. Why? Because entrenched interests don't like competition. So they lobby their powerful friends to erect high hurdles to upstarts. It's an old story.

Now, growing local governments are crushing street vendors.

The city of Atlanta, for example, has turned all street vending over to a monopoly contractor. In feudalist fashion, all existing vendors were told they must work for the monopoly or not vend at all.

"Vendors who used to paying $250 a year for their vending site must now hand over $500 to $1,600 every month for the privilege of working for the monopoly," wrote Bob Ewing in The Freeman. Ewing works for the Institute for Justice, the libertarian public-interest law firm that defends victims of anticompetitive regulation.

IJ has sued the city on behalf of two popular vendors.

In Hialeah, Fla., if you operate a flower stand too close to a flower store or if you're not constantly moving, you can be arrested.

Institute lawyer Elizabeth Foley says the regulations make "it virtually impossible to be an effective street vendor. You can't be within 300 feet of any place that sells the same or similar merchandise. That's absolutely ridiculous for the government to use its power to enact a law like that. ... These people are just trying to make an honest living, and the city is making it impossible to do so."

The law does seem designed to cripple street vending.

"You have to be in constant motion, which is completely unsafe."

Raul Martinez, the mayor when the law passed, defended the rule.

"You don't want to have everybody in the middle of the streets competing for space on the sidewalk without some sort of regulations. In the city of Hialeah, we're not overregulating anybody."

He says one purpose of the law is simple fairness: Street vendors don't pay property taxes. Brick-and-mortar stores must.

"They also create jobs," Martinez said.

"What we did back then is we got all the groups together and we came with an ordinance that was satisfactory to all of the parties at the time."

But they couldn't have gotten "all the groups" together because people who hadn't yet entered the business weren't included. How could they have been? No one knew who they would be. What the mayor did was get the established guys together. Such "fairness" regulation kills job growth and reduces consumer welfare because the entrenched interests write rules that cripple new competition.

Mayor Martinez argued that "you create an unfair advantage when you allow that vendor selling in the front of a flower shop to sell the same flowers that the flower shop sells, and to sell them at a much reduced price. That's unfair competition."

It's a fair point: Why open a brick-and-mortar store and pay property tax if you could save maybe $3,000 a year by selling from a cart?

"These are different types of business models," Foley replied. "A florist can offer professional arrangement. A florist can offer delivery. A florist has a bathroom. Air conditioning. A street vendor is out there on the street, and the way they compete is on price and convenience; you can drive up and get your flowers and go home quickly. There's nothing wrong with having two different types of business models competing near each other. It happens in America all the time.

"It's not legitimate for government to use its incredible power to make one business model have an unfair advantage over another."

As a libertarian, I'd say that the store owners' beef is with the local government that imposes the property tax, not the street vendor struggling to make a better life.

If government destroys all the paths out of poverty, the welfare state will look like the only way to help the poor.

Maybe, in addition to helping entrenched interests, that's the bureaucrats' goal.

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity." To find out more about John Stossel, visit his site at <a href="http://www.johnstossel.com" <http://www.johnstossel.com>>johnstossel.com</a>. To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

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Comments

7 Comments | Post Comment
We have been warned . . . many times . . . and over centuries. When high maintenance (consumes more than they produce) citizens put high maintenance officials into power, liberty suffers. Bastiat was particularly eloquent in his description for and consequences what he called "The Law Perverted".

The Prime Directive of government under the Constitution is the defense of liberty. The fundamental right of every honorable citizen to be left alone. The net effect of runaway regulation in the hands of despotic progressives is to place every citizen at-risk for being labeled 'criminal' . . . not for having violated the liberty of another citizen . . . but for having failed to observe some rule.
Comment: #1
Posted by: Bob Nuckolls
Wed Nov 30, 2011 7:32 AM
Corporate America has issues that fall on the Most destined of People That Face Monumental Hurdles To Survive Homelessness, Poverty and Hate Crimes Against The Society of Thieves and Hypocrite. We Know This. Why Do Veterans Fall In This Mix Because America is Still The Empire That Adopted Babylon.

You Bring The Story As Poverty Grows In This Stars and Stripes Society that Colonialism still rings on the Zippers of Men! You Have To Bring Media In To Focus On Us To Override Them!

You Talk About Vendors Because They Are Easier For The Crime Boys To Linger!

Thirty Years as a Veteran, Dignified Because I am a Woman, But Don't Take Interest in The Corporate Conglomerate That defaces The American Life Of What Freedom Stands For. We aren't Green just covered in dust of the Ashes left over from Yesterday. For Us, America holds a Gun Down Our Throat
Comment: #2
Posted by: Jalica
Wed Nov 30, 2011 7:38 AM
The final moments of world history are unfolding before us.
Comment: #3
Posted by: Just9numbers
Wed Nov 30, 2011 8:39 AM
Street vendors of the world, unite.
Let mean local governments know,
As organized labor, you'll fight
For freedom from oppressive foe.
Your union leaders will make deals
With political bureaucrats,
To give more power to your wheels.
Roll over brick and mortar rats.
Unorganized and you will lose
To those who want to keep you poor.
But come with us and pay your dues,
And you'll prosper like a real store.

You don't want to be like Walmart,
Join us and be a union cart.
Comment: #4
Posted by: Ima Ryma
Thu Dec 1, 2011 1:23 AM
I can see both sides. But I do lean toward the brick and mortar, established businesses. Mostly, because you are more protected by law if you buy from a business that can be sued if they don't do as promised. It's convenient to pick up an item from a street vendor but in reality you don't know what you are getting...possibly stolen, misrepresented, or malfunctioning goods. What do you do when you get home and find you've been taken? Who can you complain to? Who can you sue? The scene and scenario looks and sounds familiar, doesn't it? Do we really want to look like some third world country with stalls, animals running loose, and assorted goods spread out to the open air? It's certainly something to consider on a serious level. The United States stresses education as a way to rise above poverty and offers anyone opportunities to get an education. Now, it seems we have a whole new population who wants to circumvent that system and possibly remain in the "street vendor" life forever and onto the next generation. Surely we must look to the future and finds way to hold on to the American way.
Comment: #5
Posted by: Sandra O'Connor
Sun Dec 4, 2011 7:20 AM
Re: Bob Nuckolls
Bob, I don't know if you'll ever see this but your comment was superb. Thanks.
Comment: #6
Posted by: Lynn Repko
Sun Dec 4, 2011 2:26 PM
John,
You seem to be weirdly obsessed with blaming the government for everything. The vender story is about two competing
businesses with the government in between, trying to arbitrate some sort of settlement.
Comment: #7
Posted by: John Anderson
Sun Dec 4, 2011 4:53 PM
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