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Sidewalk Stimulus

Economic and Geographic Impact of Los Angeles Street Vendors

June 22, 2015 / By Yvonne Yen Liu, Patrick Burns and Daniel Flaming
Underwriter: East LA Community Corporation
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ECONOMIC IMPACTS

Street vending is a $504 million industry in Los Angeles. Every year, 50,000 microbusinesses set up shop on the sidewalks of the city, according to the Bureau of Street Services. Three-quarters sell merchandise, such as clothing and cell phone accessories. The other 10,000 sell bacon-wrapped hot dogs, tamales, and ice cream, street food for which Los Angeles is famous.

Enterprise by Los Angeles street vendors has rippling effects across the local economy. As Los Angeles street vendors sell food and goods to passersby, the multiplier effects from the supplies they purchase and the income they spend accumulate and reverberate through the local economy, adding to the demand for goods and services from local suppliers. This translates into added sales and jobs for local stores, as well as other suppliers who help street vendors keep their carts in operation.

These small purchases create jobs for workers in the upstream supplier chain, supporting still more sales and jobs when households of those workers spend their earnings, as well as more tax revenue for local, state and federal government. This spending sustains 5,234 jobs in Los Angeles, created to meet the demand of vendors and their households’ purchasing activities.

IMPACTS ON BRICK AND MORTAR BUSINESSES

Street entrepreneurs play a complementary role to brick and mortar establishments in the retail ecosystem. Retail stores and restaurants operating in geographic proximity to street vendors (who typically sold different products than the businesses they were near) enjoyed firm expansion and job growth. In our three case study locations – Boyle Heights, Downtown, and Hollywood – we found that brick and mortar businesses were more likely to experience job growth when street vendors were operating nearby.

PUBLIC SAFETY

The public safety issue raised about street vendors, as stated by the Central City East Business Association, is that they may be “targets for crimes of opportunity because of the cash on hand.” The issue is that vendors may risk being victims of crime. Our analysis of crime records showed a negligible relationship between street vendors and serious crimes. Using a goodness of fit test, we found that the correlation between both Part I and II crimes with street vendors was less than one percent.

The physical presence of purposeful and neighborly vendors on the street is associated with less frequent rather than more frequent incidents of crime. It is reasonable to conclude that the presence of vendors reduces conditions of anonymity that can encourage anti-social behavior, increases neighborhood stability, and contributes to community economic viability.

RECOMMENDATIONS

1. End punitive policies that criminalize these entrepreneurs and incorporate street vending into the mainstream economy. The first step is for the city to pass an ordinance making sales on sidewalks legal.

2. Legitimizing street vendors through a citywide comprehensive ordinance creating a permit system for sidewalk sales will bring vendors into the mainstream economy and contribute to local, state and federal tax revenue.

Legal vending will allow for expansion of new vending models and street vending community spaces in conjunction with small business corridors that will promote small business development, growth and vibrant streets.

Mobile street vendors benefit communities that lack supermarkets and healthy food options. Residents in those areas, especially the elderly, benefit from the convenience of having street vendors on their sidewalks offering the products they need.

Cities thrive when sidewalks are public spaces for neighbors to gather and engage in activities. Los Angeles street vendors are an integral weaver of the fabric of city life. Sidewalk sales bring together neighborhood residents in communities that lack access to food or goods.

PRESS COVERAGE

L.A. Street Vendors Contribute Half A Billion Dollars To Local Economy
By Rick Paulus, KCET.org (July 16, 2015)

Tamales y temor: The world of Chicago’s shadow chefs
By Austin Berg, Illinois Policy Institute (July 15, 2015)

Food Cart Vendors Are Getting Kicked to the Curb
By Michelle Chen, The Nation (July 13, 2015)

Street Vendors Generate Half a Billion Dollars for L.A.’s Economy, Report Says
By Dennis Romero, LA Weekly (June 25, 2015)

Debate Over Street Vending Heats Up
By Eddie Kim ” LA Downtown News, June 9, 2015.

Los Angeles Criminalizes Sidewalk Vendors
By Pui-Yee Yu, Beyond Chron (April 13, 2015)

Street Vendors Help Nourish L.A.’s Economic Gain
CBS Los Angeles (December 8, 2014)

L.A. officials take a step toward legalizing street vending
By Emily Alpert Reyes, Los Angeles Times (December 2, 2014)

(Op-Ed) Legalize L.A. street vendors
By Mark  Vallianatos, Los Angeles Times (October 14, 2014)

More Angelenos are becoming street vendors amid weak economy
By Tiffany Hsu, Los Angeles Times (September 6, 2014)

Area of Work: Economy
Tags: City of Los Angeles, Economic Impacts, Economic Ripple Effects, Employment, Informal Economy, Los Angeles County