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Food and the Shadow Economy

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Touch the Soil News #549

The dollar has limits in our culture on how efficiently it is allowed to move in the employment sectors. For example, over the last 50 years, workers have amassed a retirement nest egg of almost $25 trillion. These dollars do not flow freely from wages to purchasing and back to wages. Along the way they are taken out and re-inserted into the economy as debt or investments. In addition, the concept of financial efficiency – get by with the least labor costs – means just that.

Out of this austerity of dollars for purchasing power by the citizenry, there is now a significant portion of the world’s people who live in the shadow economy. They buy and sell imitations of products, often are unable to pay taxes as there is not enough income and the world’s corporations don’t want them or need them.

The problem is surfacing in New York City, were as many as 10,000 street vendors struggle to eke out a living. They sell everything from hot dogs to mobile phone chargers – more than in any other large city. Permits for the street vendors cost $200 for a 2-year permit. Given that so many more people want to get on the street with a vending cart, a black market has emerged where dealers may lease the street vending permits illegally for as much as $30,000.

New York City hot dog street vendor is one of thousands in the city that lives in the “B” or shadow economy partway between legal and illegal and on the fringe of mainstream economics.

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New York City lawmakers, elected on the promise to help low-income workers are considering doubling the number of street vending permits and boosting the cost of the permits to $1,000. The increased price of the permits is intended to fund sanitation inspections on the food vendors and help curb the black market.

Not everyone is happy, as some of the opponents say the street vendors already get too much sidewalk space interfering with residential and business access. Given the dramatic growth in second-hand stores in the nation, the shadow or “B” economy will unlikely shrink, but continue to expand.

Following is a short video clip on the street vendor situation in New York. While the video is from 2012, it illustrates the situation well.

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