Street Vendors in the Global Urban Economy

Sharit Bhowmik

• Publisher: Taylor & Francis
• Year: 2012
• Print ISBN: 9780415553728
• eBook ISBN: 9781136516269
• Edition: 1
• Topic: Social Sciences
• Subtopic: Regional Studies
• Index: Social Sciences

This volume looks at the living and working conditions of street vendors in different cities of the world. It examines the legal guidelines regarding control of public space and the rights of the working poor to earn their livelihood, and the civic authorities' constant regulation of this space.

1

Introduction

Sharit K. Bhowmik

This is a collection of studies on street vendors. This section of the employed is perhaps the most visible in the urban informal economy. In fact, some may feel that they are too visible and their overbearing presence on the streets becomes a menace for commuters, especially for those using the pavements. The civic authorities in most metropolitan cities all over the world treat these ‘intruders’ on public property as a nuisance. The urban elites view them as eyesores that blotch the urban scenario. On the other hand, for the urban poor, especially the working poor, street vendors are a boon to their existence. These street traders provide cheap food, clothes and other items for their daily use. They are also easy to access as street vendors conduct their business in convenient places in the city where a large number of commuters pass. We have tried to assess the pros and cons of street vending in this volume. Though the focus is on India, as the largest number of chapters is from there, the study covers cities in other countries as well. We have tried our best to provide a global view on street vending. There are, however, some important issues that need to be clarified in order to get a holistic understanding of the situation. The following sections deal with these.

Informal Economy

While discussing street vendors one has to delve into the nature of the informal economy. This was popularly known earlier as the informal sector as opposed to the formal sector and is called the unorganised sector in India. It includes all economic units and workers who are not a part of the regulated economic activities and protected employment relations (Chen 2004: 1). The concept of the informal sector was not popular till the 1970s, though this sector existed even then. For the industrially developed countries of Europe and North America, formal employment was the norm, especially in the U.S. after the Great Depression of 1929 and the post-World War II reforms in Europe. This type of employment entitles a degree of permanency to the job and the worker is entitled to retirement benefits after s/he retires from work. Workers who were not engaged in formal employment were proportionately small in number and did not merit any interest.

This idea of permanent employment being predominant in the economy was also echoed by developing countries in Asia and Africa. Though most workers in these countries were engaged in informal employment, their governments chose not to highlight their problems because employment in these countries was overwhelmingly in the agrarian sector. Modernisation of agriculture and industrialisation would surely change the situation as it had happened in developed countries.

It was only in the early 1970s that the notion of the informal sector gained currency. At that time the International Labour Organisation (ILO) was carrying out some major studies on the labour market in some of the countries on the African continent. One of the researchers was Keith Hart (1973), an anthropologist, who was studying the situation in Accra in Ghana in 1971. He found that quite unlike the organised markets in England, where he came from, there were workers who came to the city from their villages in the vicinity to offer their services as day labourers. These people would assemble at certain places in the cities and wait for possible employers to hire their services. He also found that there were sharp differences in retailing in England and these countries. In the developed countries, food grains and vegetables were available in standardised packets that were sold in departmental or grocery stores. In Accra, villagers would come to the cities and sell their wares to the public at large. These were not standardised goods that were weighed and neatly packed. Instead, the street vendors who sold vegetables or food grains did so in open baskets. These were weighed in front of the customers who wanted to buy these goods. On the whole, the scenario appeared quite chaotic. There were workers who worked as day labourers and whose employers had no responsibility towards them, except for paying them their daily wage. The retail trade was equally unorganised with individual sellers rather than organised retail outlets. For lack of any other word to describe these activities, Hart labelled them as the informal sector, as compared to the formal sector.

Hart also found that there were four basic features of the informal sector that proved useful for employment in developing countries. These were:

• Low levels of skill: Most of the jobs in the informal economy are labour intensive, involving low levels of technology. The skills required from workers are rudimentary. Developing countries have large reserves of untrained, unskilled workers who have little or no education. These people cannot hope to find work in the formal economy as they do not have the skills needed for specialised jobs in the formal sector. Hence, they find employment in the informal economy. This sector, therefore, absorbs the surplus labour in the economy.

• Easy entry: Because of the low skill requirements, entry to the informal sector is comparatively easy. For example, it is easier for a person with low skills and little capital to take to street vending instead of starting a venture in the formal economy such as a grocery store.

• Low-paid employment: Wages of workers in the informal economy are low because of the low levels of skills of the workers. Moreover, easy entry in this sector is precisely because of low wages offered to the less skilled workers.

• Largely immigrant workforce: The labour employed in informal employment does not consist of local people and they are mainly immigrants. Hart presumes that migrants mainly possess low skills and that is why they can find work only in this sector. This feature is not necessarily correct because one finds a large number of local people who are engaged in this sector, especially in developing countries.

The Employment Mission of the ILO (1972) had noted that the traditional economic sector not only persisted along with modern enterprises, but it had expanded. The mission chose to use the term informal sector (coined by Hart a year earlier) rather than traditional sector. This sector included small-scale and unregistered economic activities.

Both Hart and the ILO believed that the informal sector was a transitory sector. It would disappear when these countries developed. The formal sector would expand and absorb the informal sector. In other words, day labourers or workers in unregistered small factories would be absorbed as formal sector workers and street vendors would possibly be absorbed into the organised retail sector as these countries develop and expand their formal sector. Hence, the ILO believed that these two sectors were independent of each other and the informal sector would disappear or reduce considerably as the formal sector expanded. This approach is known as the dualist approach and it is regarded as outdated considering the developments in the economy in recent years. In fact, we find that far from disappearing, this sector has grown tremendously in all countries, even in the developed ones.

It would be foolish to throw out the entire concept of a dualistic approach. These studies were important because they brought to light some important aspects of the informal economy, especially its potential for providing employment. In developing countries the informal economy was able to absorb surplus and untrained labour. However, it was by and large a concept that was not able to effectively understand changes in the economy, and why, despite development, this sector continues to expand. This, in fact, brings us to the other approach to studying the informal economy, namely the structuralist theory.

This theory was developed by Manuel Castells, Alejandro Portes and Lauren Benton in late 1989 though the issue was raised by Caroline Moser in her study in World Development in 1978 (Moser 1978). Portes and Castell argue that far from being independent of each other, the formal and informal sectors are related to each other. The enterprises in the formal sector use the informal sector for manufacturing components as costs are much lower. The informal sector enterprises are not subject to the laws that regulate production in the formal sector. The formal economy thus finds the informal economy a useful means for increasing its profits. At the same time the informal economy depends on the formal sector for its sustenance. The structuralists thus stress on the fact that there is a close, symbiotic relationship between the two sectors. This is to a large extent true as we can see low-paid, sweated labour in the informal sector being used to provide inputs to the formal sector. Small-scale industries are engaged in manufacture of parts that are used as inputs in the manufacture of goods produced in the formal sector. The automobile industry depends on a number of small manufacturers who supply the different components for making the vehicle. Similarly, we find that manufacturers in the developed economies outsource their production to the developing countries because manufacturing in the informal sector in these countries is much cheaper than in the developed countries.

The third theoretical approach is of the legalists. This approach was developed by Hernando de Sotto, a Peruvian economist who gained considerable fame because of his contribution to the understanding of the informal economy and urban poverty. The legalist theory states that the informal sector comprises small operatives who work outside the formal economy because they find the legal procedures too cumbersome to follow. These operators prefer to operate informally because the government procedures for giving them formal recognition are long-winded, complicated and difficult for them to understand. Hence, these people are not willing offenders. They try to circumvent the rules because they find them too complicated and time-consuming.

This theory perhaps explains best why street vendors prefer to engage in the informal economy. In most cases, as shown by the studies in this volume, street vendors can become legal operatives if they obtain licenses for plying their trade. This process, if allowed, is a cumbersome process. It would appear that the concerned authorities are only too keen to make the process of licensing so complicated that it becomes almost impossible for the semi-literate street vendor to comprehend what the forms contain. It is even more complicated to fill in the forms. Most street vendors do not have the capacity to do so. In fact, it is ironic that most governments try to simplify procedures for conducting large-scale business in the formal sector but they continue to make issues more complicated for the small operators.

After discussing the informal economy let us now deal with street vendors. Who are these people? What do they do? Why are they in the informal economy? We will deal with these questions in the next few sections.

Who are Street Vendors?

This collection deals with street vendors and their role in the urban economy. Street vendors have been in existence since ancient times. In all civilisations, ancient and medieval, one reads accounts of travelling merchants who sold their wares in towns by going from house to house. There were also markets that were held at certain intervals—weekly, monthly, etc. Vendors would set up their stalls in these markets. They carried out their trade like any other merchants or shopkeepers. The main difference was that while shopkeepers and other merchants had fixed places to carry out their business, street vendors, as their name suggests, had no permanent places for their trade. They plied their trade on either the pavements in order to attract customers who were mainly pedestrians, or they moved from place to place carrying their goods on carts. Those who could not afford carts carried their wares in baskets on their heads. Others tied two baskets on either side of a bamboo pole which they would carry on their shoulders. In fact, one can still find street vendors in many of the poorer Asian countries carrying their wares in a similar fashion.

Street vendors are thus of two types, namely, those who squat in public places such as pavements, parks or other such places, and those that are mobile as they move from place to place in search of customers. The common feature in both cases is that the places for conducting business are not permanent. Hawkers that occupy public spaces may conduct their business from that spot for years but they do not have legal claims to that space. They can be evicted by the local authorities at any time. This sets them apart from shopkeepers and others as these people occupy space that is legally theirs and as such they have permanency of tenure.

Another major difference between street vendors/hawkers and shopkeepers is that they approach the likely customers whereas customers go to shops to buy their goods. In this sense, vendors are more customer-friendly than shopkeepers. This point was noted in a major decision of the Supreme Court of India (the apex court in the country) in the case of a street vendor, Sodhan Singh, a garment seller who operated from a pavement in New Delhi, the capital of India, along with other hawkers. The police and the municipal staff would frequently evict them and would confiscate their goods. The hawkers would be beaten up if they resisted.

Sodhan Singh contacted a lawyer who was willing to file a Public Interest Litigation (PIL) in the Supreme Court. The question raised was that harassment of these hawkers resulted in the violation of their fundamental right (Clause 19[1g] of the Constitution of India) to carry out trade as a part of their livelihood. The case ran for three years but after this the Supreme Court gave a landmark judgement. The main extract is given here:

If properly regulated according to the exigency of the circumstances, the small traders on the side walks can considerably add to the comfort and convenience of the general public, by making available ordinary articles of everyday use for a comparatively lesser price. An ordinary person, not very affluent, while hurrying towards his home after a day’s work can pick up these articles without going out of his way to find a regular market. The right to carry on trade or business mentioned in Article 19(1)g of the Constitution, on street pavements, if properly regulated cannot be denied on the ground that the streets are meant exclusively for passing or re-passing and no other use.

The above extract from the Supreme Court judgement is significant because it emphasises several important aspects of street vending and the use of public space. The judgement notes the positive role of street vendors in providing essential commodities to common people at affordable prices and at convenient places. Moreover, the judgement notes that street vending, if regulated, cannot be denied merely on the grounds that pavements are meant exclusively for pedestrians. The most important aspect is that street vendors are exercising their constitutional right to carry out trade or business, hence the practice should be regulated properly and not abolished.

In modern times we find that street vendors are rarely treated with the same measure of dignity and tolerance. They are targeted by municipalities and the police in urban areas as illegal traders; the urban middle class complains constantly about how these vendors make urban life a living hell as they block pavements, create traffic problems and also engage in antisocial activities. (Though more often than not, the same representatives of the middle class prefer to buy goods from street vendors as these are cheaper even though the quality is as good as those in the overpriced departmental stores and shopping malls.)

For most street vendors, trading from the pavements is full of uncertainties. They are constantly harassed by the authorities. The local bodies conduct eviction drives to clear the pavements of these encroachers and in most cases confiscate their goods. A municipal raid is like a cat-and-mouse game with municipal workers chasing street vendors away while these people try to run and hide from these marauders. Confiscation of their goods entails heavy fines for recovery. In most cases it means that the vendor has to take a loan from private sources (at exorbitant interest rates) to either recover whatever remains of his confiscated goods or to restart his business. Besides these sudden raids, street vendors normally have to regularly bribe the authorities in order to carry out their business on the street. All this means that a substantive income from street vending is spent on greasing the palms of unscrupulous authorities or private money lenders. In fact, in most cases street vendors have to survive in a hostile environment though they are service providers.

Why Street Vending?

In most cities in the world the urban poor survive by working in the informal economy. This trend is prominent in developing countries. Poverty and the lack of gainful employment in rural areas and in smaller towns drive large numbers of people to the cities for work and livelihood. These people generally possess low skills and too low a level of education for the better paid jobs in the organised sector. Besides, permanent protected jobs in the organised sector are shrinking. Even those with requisite skills are unable to find proper employment. For these people, work in the informal sector is the only means of survival. This has led to a rapid growth of the informal sector in most large cities. For the urban poor, hawking is one of the means of earning a livelihood, as it requires minor financial input and the skills involved are low.

A large section of street vendors in urban areas are those with low skills and who have migrated to the larger cities from rural areas or small towns in search of employment. These people take to street vending when they do not find other means of livelihood. Though the income in this profession is low, the investment too is low and the people do not require special skills or training. Hence, for these men and women, street vending is the easiest way of earning their livelihood.

There is also another section of the urban population that has taken to street vending. These people, or their spouses, were once engaged in better paid jobs in the formal employment sector. Deindustrialisation in cities in many of the developing countries has created job losses in formal employment. This trend is very evident in cities in India and some of the Latin American countries. Many of the displaced, or their spouses, have become street vendors in order to eke out a living. Over the past few decades there has been a substantial increase in the number of hawkers in the major cities around the world.

So street vendors are those people who do not have employment or those who have lost their stable jobs. They try to overcome their problems by pooling their meagre resources and starting their own enterprises. They do not take to stealing or crime nor do they beg for a living. All they want is to live a life of dignity. However, the authorities in most cases do not let them live in peace. The studies in this volume show that in almost all countries one of the obsessions of street vendors and their organisations is of trying to negotiate with the authorities for space to run their business.

Street Vending and Public Space

Before we move further let us examine what is meant by urban public space and what it means for the working poor. In a broad sense urban public space includes areas that are used for public activities. It can be defined as all physical spaces and social relations that use that space within the nonprivate realm of the city. Hence, urban public s...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Contents
• List of Tables
• List of Maps
• Foreword
• Preface and Acknowledgements
• 1. Introduction
• 2. Street Vendors in Asia: Survey of Research
• 3. Street Vending in Delhi
• 4. The Politics of Illegality: Mumbai Hawkers, Public Space and the Everyday Life of the Law
• 5. Integrating Street Vendors in City Planning: The Case of Vadodara
• 6. Street Vendors in Phnom Penh, Cambodia
• 7. Street Food Vending in Bangkok
• 8. Street Trading Trends in Africa: A Critical Review
• 9. Street Trade in Latin America: Demographic Trends, Legal Issues and Vending Organisations in Six Cities
• 10. Governance of Street Trade in Caracas, Venezuela
• 11. Clandestine Geometries: Mapping Street Vending in Downtown Sao Paulo
• 12. Advocacy Coalitions Influencing Informal Sector Policy: The Case of India‘s National Urban Street Vendors Policy
• About the Editor
• Notes on Contributors
• Index