Download the report here.
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.
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.
- 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.
- 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.
via Seeds of Change
Los Angeles’ economy is operating at an unsafe level for people and the planet. A new report by the Economic Roundtable, Industry Greenhouse Gas and Wage Sustainability released on Mother’s Day in honor of Mother Earth, identifies the climate change effects as well as the wage sustainability of jobs in each industry.
via Seeds of Change
A Black man brutalized by police officers. The incident touched a nerve in the city, lighting a powder keg of long-held disappointment of Black communities in city institutions purporting to serve the people. I’m not talking about Baltimore, which we’ve watched burn since the funeral of 25-year old Freddie Gray earlier this week. Twenty-three years ago, Los Angeles too exploded with outrage and indignation when four white police officers were acquitted in the beating of Rodney King.
We understood the 1992 uprisings as a manifestation of rage over economic deprivation and blighted hopes. At the time, Los Angeles County was in its second year of what proved to be its most severe recession since the Great Depression. The greatest concentration of the region’s low-income and Black residents then (and now) lived in South Los Angeles, where the scarcity of jobs and economic opportunities was acute. The unrest was followed by public commitments to ensuring that South Los Angeles workers would have equitable opportunities to provide a decent standard of living for their families.
In our 2002 report South Los Angeles Rising, we reviewed how far those commitments had been kept for South Los Angeles (see Map 1). We found that only 19 percent of the buildings that were torched in South L.A. were operational by 1999. And, the jobs created by the businesses paid below average wages. In contrast, Central L.A. enjoyed a recovery of 42 percent of their buildings. Workers employed in Central L.A. earned above average wages.
Yesterday, Angel Jennings reported that a $100-million entertainment district on Vermont between 84th Street and Manchester broke ground. The developer, Sassony Properties, dubbed the future site Vermont Entertainment Village and promises to open in late 2016 with a new supermarket, pharmacy, and a host of other stores to a neighborhood still struggling with a deficit of retail options. [Strangely, promotional photos of the center feature only white people.] The site, once a swap meet for the neighborhood, was the first to burn down on the block in 1992. For twenty-three years, an empty lot has stood in its place, a visible reminder that commitments had not been kept.
Earlier this week, Steve Lopez wrote about the parallels between Sandtown-Winchester, the neighborhood where Freddie Gray lived, and South Los Angeles. “[We] have Third World conditions here in the land of riches. It’s there in Baltimore, a short drive from the national halls of power. And it’s here in Los Angeles, the national capital of cardboard villages and mansions the size of coliseums.”
Let’s hope that the Vermont development is a sign of South Los Angeles rising, the city keeping its commitment to our Black communities.
via Seeds of Change
Restaurants want an exemption from a minimum wage increase for workers receiving tips, reported Emily Alpert Reyes for the LA Times. Their reasoning is that workers who earn tips already make above the proposed $13.25 and $15.25 an hour. “We treat our workers like family,” one restaurant owner, who declined to be named, told me at the minimum wage public hearing in Watts. “Our workers make more than $15 an hour, they make $19 or even more, both front and back of the house.” He pointed to the sticker on his shirt, “Make Tips Count.”
But, evidence tips us towards a different story. We know that restaurant workers are more likely to live in poverty than the general working population. In our report Los Angeles Rising, we calculated that a quarter lives below the poverty line. This is based on wages that includes tipped income. As a result, families get by with the help of public programs. About 15 percent of employees working in restaurants and bars rely on food stamps and subsidized health insurance (Medi-Cal) to survive. A recent report released by the Restaurant Opportunities Centers United calculated the national cost to taxpayers of over $9 billion a year.
The poverty wages earned by those employed in eating and drinking places is exacerbated by wage theft, when employers don’t abide by wage and hour standards. Wage theft can take many forms; from workers not paid for cleaning up at the end of a shift to not receiving meal or rest breaks. The restaurant industry is rife with wage theft. The Department of Labor conducted investigations of 1,800 restaurants in the west coast and found 72 percent guilty of wage theft. In Los Angeles, approximately one out of every five restaurant workers is a victim of unpaid wages.
A $15.25 minimum wage with strong enforcement provisions for the 113,776 restaurant workers in Los Angeles can tip the scales towards a more sustainable city. We estimate that a raise in the minimum wage to $15.25 would affect 71 percent of restaurant workers in the city. Not only would families supported by a restaurant employee have more money to spend on basic needs, we taxpayers would not absorb the costs of the industry’s poverty-level wages. Across the economy, a raise would save our city an annual $314 million in public assistance payments, a cumulative benefit of $941 million if phased-in over five years (see Table 1).
To us, saving $941 million for taxpayers is the tipping point to include restaurant workers in a $15.25 raise.
via Seeds of Change
Los Angeles is considering a raise of the citywide minimum wage.
Economic Roundtable recently coauthored a report Los Angeles Rising: A City That Works for Everyone with the UCLA Labor Center and Institute for Research on Labor and Employment which looked at the consequences, both intended and unintended, of such a lift. We found that a phased-in increase to $15.25 by 2019 will put $5.9 billion more into the pockets of 723,000 working people, which will generate $6.4 billion in increased sales. That means that every dollar increase in the minimum wage generates $1.12 in economic stimulus. Businesses will hire more in response to the greater demand, creating 46,400 new jobs.
Why is a $15.25 raise such an economic boost for the local economy?
The answer, we found, lies in the household spending patterns of families who earn minimum wages. Families who earn less than $40,000 a year typically spend their earnings as soon as they are paid on basic needs. On average, a U.S. household that earns $34,000 spends about $36,000 on living expenses (see figure below). The wages earned by low- and moderate-income workers, therefore, go quickly back into circulation after pay day. The direct beneficiaries are place-based businesses, that cater to households within the immediate geographic vicinity. This includes real estate, health care, restaurants, and retail stores. These local businesses will reap increased sales, which allows them to grow and expand the economy.
In contrast, high-income households who bring home $70,000 or more a year, which includes most shareholders of corporations that employ minimum wage workers, set aside almost a quarter of their earnings, an average of $25,630 a year, in savings. Most of this money is placed into investments that are far removed from Los Angeles.
Therefore, a raise to $15.25 by 2019 is an investment in Los Angeles. Minimum wage workers will spend increased earnings of $5.9 billion in the local economy that will help the city grow.