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April 24, 2012

New York’s Suicidal War on Jobs

European immigrants landed in the Big Apple before settling in the heartland, and later Irish, Italians, Chinese and Puerto Ricans founded businesses and communities that have shaped the city into what it is today. Yet in recent years, New York has become less welcoming to its more entrepreneurial immigrants. Today’s New York Times discusses the byzantine system of fines and regulations that is putting street vendors, most of whom are recent immigrants, out of business:

For years, street vendors and their advocates have bristled at the penalties the city imposes. Hundreds of vendors say they have been forced out of business by the steep fines, which can quickly reach $1,000 each for even the least serious violations, advocates say. . . .

“The vast majority of tickets we see are for breaking one of these million rules they have: You’re a foot too close to the fire hydrant, a foot too close to the crosswalk, the table is too long,” said Mr. Basinski, who has been lobbying to change the fine structure for several years. “You can very quickly be at that $1,000 level for every ticket.”

Fortunately, new bills are being discussed that would change the way these fines are allocated and reduce their number, removing vendors from the burden of multiple thousand-dollar fines for such infractions as poor table placement.

Yet even if the bills pass, the larger problem remains. Like many deep blue cities, New York’s regulations make it extremely difficult to start new businesses, especially for those without the connections and money to navigate the city’s extensive bureaucracy. And while vendors operating on crowded streets do raise some serious issues, immigrants desperately need the work, and the city needs them to make a living and build new businesses.

The city’s goal should be to create conditions in which undercapitalized entrepreneurs can flourish. These are the people whose success will build the next generation of successful New Yorkers. The pushcart peddler is an American hero and our legislators should be looking for ways to promote rather than to punish them. Instead it sometimes seems like city officials forgot how New York grew and are trying to crush as much economic activity as they possibly can.

 

Posted in Blue Social Model, Quick Takes
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  • Mogden

    I’m not sure why you are soft-pedaling the accusation that city officials “are trying to crush as much economic activity as they possibly can”. They absolutely are doing so, in order to extract rents from corruption.

  • Tom Gates

    The tone of the article strikes me as being naive or somehow unfinished. Why is the City doing this? Is it more money for the CIty? Are building vendors complaining about hits to their own revenue? Is it health enforcement? Is the City trying to keep the streets from looking 3rd worldish? Is it safety? Is it anti-terrorism?There may be a perfectly good reason for all of us this.

  • Kenny

    Rent control, too, another form of thief.

  • QET

    I am surprised that you didn’t mention Tunisia, epicenter of the late Arab uprisings, as I believe it was the inability for a young guy to get a permit for his vegetable cart that finally led him to set himself on fire, kicking the whole thing off.

  • Angel Martin

    I really liked this article !

    It points out how self-destructive the blue model has become.

    But there is something else. The history of blue politics includes powerful critiques of the predatory forces that harmed the disadvantaged (including new immigrants).

    Now, with the taxation and regulatory regimes of the blue state governments, they can write many of those critiques in the first person !

  • http://fpri.org Robert L. Freedman

    In practice the rules you describe are used by government enforcement officials to solicit bribes for not giving summons. Eliminating many of these silly regulations will reduce the opportunities to solicit bribes, as well as make life easier for the entrepreneurs.

  • Kris

    Tom@2: “There may be a perfectly good reason for all of us this.”

    Unless you believe that “the City” is evil or brain-dead, of course there’s a good reason for this law, and for that regulation, and for each and every one of these uncountably many rules. The point of this post (and article) is that they have probably metastasized past any reasonable point.

  • Brian

    Our elite betters who make these laws’ look down upon people who work such businesses. We are turning into a people ruled by the powdered wig set, without the amusing constumes.

  • http://blogs.the-american-interest.com fernstalbert

    So, if its too expensive and difficult to do business in the Big Apple – its time to move elsewhere. Simple logic. Cheers.

  • Harry

    You need New York style regulations (and perhaps stronger regulations) to prevent chaos on the streets. It is profoundly unfair for any unregulated vendor to set up shop in a public way like a sidewalk and compete with a merchant who is established in the community and owns or pays rent on a bricks and mortar building. Indeed, it is a shame that New York lets rootless vendors set up shop on sidewalks at all. If you want to run a business, rent store space and become part of the community.

  • dmitryb

    even if in each individual case the fine or the fee makes sense and is optimal, it doesn’t mean that taken as a whole the system is optimal or logical. There is a methodology in manufecturing called Lean. It’s based on Toyota’s production model, which was the first one to streamline the supply chain line resulting in Toyota being the most efficient and profitable car company in the world. This methodology poses that optimizing locally does not work. Any change has to be evaluated in the context of how it affects the entire system. And there are plenty examples where making a link in the chain less efficient than possible improves the overall performance.

  • http://sinequanon.spleenville.com charles austin

    No, there isn’t really a good reason for a lot of these regulations. Many of them are by their very nature utopian in design and based on yet another variant of zero tolerance. Where is the risk reward analysis for any of this? Mostly, it just serves to make us all criminals so they can pick and choose who they want to prosecute.

  • TomB

    Harry, apparently, you haven’t read the article. Vendors have always been an established part of the street life of NYC and particularly good vendors add character to any neighborhood. Nowhere is anybody calling for “unregulated vendors” A favorite canard of the left is to take a reasoned argument for reducing regulations to those which are needed for public health and safety, and say people are calling for the removal of *all* regulations. You prove Mr Mead’s point.

  • Quique

    NYC would rather give you a handout than let you try to earn it on your own. That way you’re beholden to the elected, not the other way around.

  • Gary from Jersey

    Street vendors provide valuable and affordable services to countless thousands of people through lower costs, convenience and time-saving. They also clog sidewalks, spill into heavily traveled streets and aren’t always the most sanitary. The city needs to balance these sometimes conflicting conditions with reasonable regulation. But as Prof. Meade and others note, regulations has become yet another way to shake down businesses and residents to feed an enormous bureacracy, which is what these regulations do.

  • Dr. Kenneth Noisewater

    Stories like this just make the smile on my face grow a little bit wider.

    /escaped from New York, best decision I ever made. EVER.

  • Bill Dalasio

    “And while vendors operating on crowded streets do raise some serious issues…”

    Please don’t take this the wrong way, because I really liked your article, but where exactly are these areas that are plagued by vendors blocking crowded streets and sidewalks? Most seem pretty eager to have a steady flow of traffic rather than an annoyed bottleneck.

  • Forbes

    Burjeoning growth in the business of facilitators and expeditors to obtain permits and approvals in NYC. In many cases, it’s just paying someone to stand in line for some city dept. to sign off on completed paperwork (red tape). Now that’s one job Americans don’t want to do!

  • https://www.facebook.com/ritchietheriveter Ritchie The Riveter

    Harry … “become part of the community” is too often implemented as “be assimilated into the collective … at the spot the Powers That Be assign you”.

    Local laws/codes may start out with good intentions, but too often they are perverted to keep competition out and protect established, politically-connected entities (business and union) … locking out new businesses who might just serve the citizens better than the old.

    That flies in the face of the unalienable right of the individual, to pursue happiness … on both sides of the transaction.

  • f1guyus

    It’s Ayn Rand’s world. We just get to live in it.

  • Mike

    “New York’s regulations make it extremely difficult to start new businesses, especially for those without the connections and money to navigate the city’s extensive bureaucracy.”

    That’s exactly the point of those regulations. Those regulations, and the council members who passed them, were bought and paid for fair and square by restauranteurs. They’re designed to kill competition, and they’re working as intended!

    Don’t be so naive.

  • tim maguire

    Harry, as someone who has navigated the jaw-dropping process for getting approval for sidewalk tables for a cafe in New York City (I was required to hire an architect (!) to draw the placement of the tables and chairs), I can assure you, they do pay a great deal to set up shop on the sidewalk–the city rents that space to them at a pretty penny. It’s hardly free.

    And even if they didn’t, why is the store proprietor’s relationship with his landlord the problem of the street vendor?

    Why is it the city’s job to play the role of your heavy?

    Most of the commenters here have it right–New York City is run like a 3rd world country. There are 2 ways of doing things: the official way, which involves endless permits, delays, and red tape; and the way the connected people do it, which is through handshakes, phone calls and favors.

    Did you know there is an actual job called “Facilitator,” whose sole purpose is to guide people needing permits through city bureaucracy (and the permit might be for something as simple as painting the common areas of a condominium building).

    Small wonder New York has a thriving underground economy.

  • JimGl

    Walter, please change the Title’s of your articles. I know you’re trying to make them sensational, but it’s just making you sound like a tabloid. They are not stupid, they are not committing “suicide”, they are knowingly, purposely, breaking the system. Then the Gov’t, probably Federal will have to step in and make draconian changes and send tons’ of money as in Calif. Ill. with another Bailout. I certainly don’t know the details but I know the direction.

  • Person of Choler

    “Did you really think that we want those laws to be observed? We want them broken….The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What’s there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted and you create a nation of law-breakers.”
    ~’Floyd Ferris’, bureaucrat – Atlas Shrugged

  • Brenz

    Being an architect here in NYC, the reason for the rules could be for various reasons – see Tom Gates comment.

    However the $$ aspect is strictly to bring in as much revenue as possible. That blue model is very very expensive. With the financial sector not pumping out the cash like the old days, the city needs to bring in the cash and just as important, keep the public workers busy.

    Try getting a project built here. Or just trying to keep your existing building from having fines that build up quickly is very hard.

    The reasons for the rules may have been created for the common good/safety – BUT the time and money that all of these rules cost is too much.

  • Art

    As a lifelong NYer, I and all others that will admit it have come to see, it is no secret that the state, city, towns, and municpalities use arcane regulation, extreme tolls, ever increasing mta rates, a mountain of laws, obscene property taxes, high sales taxes, and pickpocket NYS income tax, to fund a failed prison, welfare, city pension, workers compensation, Leftist boondoggle.

    The tidal wave of earners leaving NY for friendlier economic environments is no secret either.

  • gringojay

    Go try to walk the NYC street housing the Museum of Modern Art (53rd) & enjoy the impass of “art” street vendors, with free grooving to the “cultural” music blaring from food vendor carts across the street.
    The crowded population of NYC makes it a logistical imperative to regulate the public space to uphold access for all. It is unsafe for pedestrians to be shunted off the curb into street traffic. NYC street vendors have won the court case that upholds their right to that form of commerce on public walkways.
    Veterans of US military in that city are assured the right to street vending.

  • LarryD

    *cynic mode on*
    The purpose of byzantine regulatory structures is to provide status and sinecures for the nomemklatura, the gentry members of the elite. Any useful regulation is an accident.
    *cynic mode off*

  • George Dixon

    If it like Philadelphia then a $50 bill in a box of Good & Plenty candy, handed to the ‘correct’ person, is all it takes to not have to follow the rules…..

  • vince52

    You missed the boat on this one, Walter.
    If you don’t impose regulations on street vendors that are comparable to the regulations on their tax-paying brick and mortar competition, they will put their rent and tax paying competition out of business. It’s not suicide, it’s self-preservation.

  • koblog

    I wish you’d quit calling it the “blue” model. This is red to the core — absolute power by a central planning authority. That is Marxist and certainly not “true blue.”

  • http://www.tempeteaparty.org Lee Reynolds

    This article makes many good points, but it fails to uncover the mindset and intent behind these attacks on normal commerce.

    First of all, the left wants control. Commerce that it cannot control is commerce that it wants to stop. The notion of street vendors running businesses without any sort of interference from the government makes their hackles go up.

    Second, and perhaps most damning, the left literally finds it unfair that someone who has spent the time and effort to create a successful business will benefit from it, while 3rd parties who have done nothing will not. They disagree with market economics and believe that goods and services should somehow be allocated equally to everyone.

    This is what they mean when they harp on about “equality.” They’re not talking about equality in any rational sense, such as equality before the law or equality of rights, but equality of material wealth. They literally believe that no one should have any more than anyone else, and they wish to hijack the state in order to enforce that vision of the world. So they seek to punish those who are taking the time and effort to increase their own material wealth since such a person is “increasing inequality.” They have a hard time attacking larger businesses, though they certainly do try, and so they target street vendors and other businesses that are particularly vulnerable, all for the sake of destroying as much wealth, and potential for wealth, as they possibly can.

    In short, they are evil and insane.

  • kcs

    In this age of instantaneous communication, internet, teleconferencing, etc., I fail to understand why the financial industry needs to be based in a crowded, expensive, over-regulated megalopolis.

    New York’s time has passed.

  • Mastro

    Harry

    “You need New York style regulations (and perhaps stronger regulations) to prevent Indeed, it is a shame that New York lets rootless vendors set up shop on sidewalks at all. If you want to run a business, rent store space and become part of the community.”

    Except I don’t want a lobster omelette for $35- but a $7 sandwich- $7 sandwiches don’t pay for the rent for a Manhattan location (a big problem is that real estate people don’t take reasonable rents- they either want a fortune- or they write off that mythical rent in tax losses).

    So- the low end can only be serviced by trucks/tables etc.

    All these regulations add up to businesses that are so complex and costly- they are for the rich, by the rich. Enjoy your omelette.

  • OsoPardo

    koblog says: I wish you’d quit calling it the “blue” model. This is red to the core — absolute power by a central planning authority. That is Marxist and certainly not “true blue.”

    Dear koblog,

    For some reason the Left is referred to a blue in the US, while the Right is referred to as red. You’re partially right, this is Marxist thought. Unfortunately in the US, Marxist thought is the color blue and, yes, it’s red to the core.

  • Rich K

    Its not that they forgot Walter, they dont give a fig. Its hard to see those folks from the forty first floor and care much, well , until your lunch cart is 5 minutes late rolling down the hall that is.

  • Molly

    When listing all the ethnoi that make up New York, and that founded businesses there, let’s not forget the Jews (along with the Irish, Italians, Puerto Ricans, Chinese).

    There are also Dominicans, Germans, and everything you can imagine. What a great city it once was, before its current Mayor Nanny!

  • Jim.

    @33

    You’re right, the grand experiment that was NYC has failed, in this day and age. When businesses have to depend on government inefficiency at law enforcement for their profitability (and thus survival), the system is too weak to stand.

  • http://jamesbbkk.com JamesB
  • richard40

    To Tom Gates, #3.
    “The tone of the article strikes me as being naive or somehow unfinished. Why is the City doing this? ”

    I can think of several reasons.
    1. Most of these regs hit recent immigrants, who dont vote. Why worry about how badly you [hurt] them. Freedom only matters for voters if you are a leftist, and even then it only matters to those who vote for leftists.
    2. It brings in money the city can give to handouts to voters.
    3. It kills competition to businesses with brick and mortar stores, who vote, pay property taxes, and give campaign contributions.

    So much for the statue of liberty saying “give us your poor and hungry, so they can prosper here”. Now that the leftists have taken over, the US no longer stands for freedom.

  • Vinny B.

    I noticed you failed to blame the Republican mayor. I am sure if he were a black Democrat like the president, you’d blame him right away because, well he’s black and that’s how those people are. Sick how the Republicans can’t defend Bush’s record somtheyntell you not to vote for Obama because he’s black and then they spread the lies about him eating dogs since they couldn’t prove the lie about him not being born here.