THE BLOG
05/26/2011 05:06 pm ET | Updated Jul 26, 2011

More Than Spare Change: How NYC Scams City Street Vendors

New York is home to an estimated 10,000 street vendors, the vast majority of whom are immigrants from destinations like Bangladesh, Senegal and China. Life on the job for these workers is inherently tough; most vendors work grueling hours, rain or shine, and earn incredibly low wages that they use to support families at home and abroad. But the web of rules regulating the industry makes it even more difficult for street vendors to get ahead.

Mayor Bloomberg has always been outspoken about the value immigrant entrepreneurs bring to New York, and recently announced a promising new project to assist potential business owners. Yet in many ways, our current city laws seem designed to drive this group of immigrant entrepreneurs out of business.

Often called "the smallest of small business owners," street vendors receive an average of 50,000 tickets per year for a variety of violations, including parking more than 18 inches from the curb or less than 20 feet from a storefront. Violations of these and other rules result in staggering fines that represent a significant economic hardship to workers who make around $14,000 each year.

In 2006, the city increased the maximum fine for violations, making it so that a vendor cited for a few offenses could be fined as much as $1,000. Most vending violations fall under a graduated penalty system that increases fines for each violation within a two-year period. This means a first violation brings a fine of between $25 and $50, the second between $50 to $100 and so on. In addition, the graduated system applies to vendors even if they are cited for separate offenses. Take, for example, the case of a vendor cited for placing his table 20 inches from the curb one day, and for wearing a jacket that covers his license two months later. Under the current penalty scheme, the second violation would be treated as a repeat offense and he would be subject to a higher fine, even though it is completely unrelated.

Street vendors, who make their living selling low-cost goods, simply cannot afford to pay these fees, nor can they absorb them as a cost of business. Many are forced to lose their licenses, and instead choose to operate unlicensed and unregulated by the city.

Further, evidence shows that New York barely profits from this regulatory scheme. A recent study by the Independent Budget Office found that in fiscal year 2009, the city spent about $7.4 million on street regulation and enforcement of vending laws, while revenues from fees and fines added up to just $1.4 million. Of $15.8 million in fines levied during that period, the city only collected $900,000.

Cost issues aside, the sheer complexity of the vending regulation system also proves to be a barrier for vendors trying to stay on the right side of the law. According to the Street Vendor Project, most sellers don't understand the maze of vending laws, and sometimes neither do the police charged with enforcing them. The city's rulebook does not clearly explain the rules, and it isn't translated into some of the major languages vendors speak. Vendors also have trouble presenting their cases in front of the Environmental Control Board, an administrative court that provides neither interpreters nor court-appointed lawyers.

Two bills have been introduced in the New York City Council that would seriously improve economic conditions for street vendors throughout the city. The first bill, co-sponsored by 29 Council members, would lower the maximum vending fine to $250, such as it was before 2006. Co-sponsored by 31, the second bill amends the administrative code to ensure that vendors are subject to escalating fines only when they repeatedly commit the same offense. Reducing the fines would enable more vendors to pay off their debts to the city and hold on to their licenses.

It's encouraging that these common-sense fixes to the system are gaining traction at City Hall. The City Council should waste no time in amending the vending regulations that impede so many street vendors who are trying to make an honest living. In addition, city agencies ought to invest more resources in educating street vendors about the rules they are expected to uphold. If the mayor is serious about supporting the immigrant entrepreneurship, he should get behind the City Council's efforts to lower the fines that too often cost street vendors their licenses and their livelihoods.