FNS: Third world-style economies proliferate

Frontera NorteSur

Pirate profiteers and street merchants are central players in the economies of Mexico and other nations of the developing world.  Although informal businesses are far from new in the United States, recent reports indicate they are growing in scope and diversity. In the pinnacle of advanced capitalism, commercial  transactions based on hard cash and record-free trails exist alongside high-tech gadgetry and instantaneous financial services.

With poverty on the rise and millions of unemployed and underemployed people still scratching by in urban and rural areas of the US, the potential for expansion of the informal sector is enormous. At the same time, as some people tinker with creative ways to make a living in tough times, spurts of growth in the underground economy are laying the groundwork for new tensions and conflicts over immigration, jobs and taxes, quality of life and even national security.

In southern California, for instance, the growth of informal commerce is unleashing complaints that echo long-running ones heard south of the border. After a federal court decision struck down a local anti-street vending ordinance as unconstitutional, the number of street vendors at popular Venice Beach increased to such an extent that some locals complained it impaired their beach views. Many of the entrepreneurs sell mass-produced items including T-shirts and jewelry.

Los Angeles City Councilman Bill Rosendahl  is critical of the expansion. In comments to the New York Times, Rosendahl contended that people from across the globe were “just taking over with junk and cheap trinkets.” Officials like Rosendahl are wagering that a new ordinance set to go into effect on January 20 will meet the federal court’s constitutional test and curb the merchants of low-brow fashion.

In Los Angeles’ Westlake section, the ranks of street vendors have likewise increased,  incorporating as many as 280 people, according to City Councilman Ed Reyes. The boom in street selling is eliciting criticisms frequently voiced in Mexico: informal vendors are squeezing established, tax-paying business people who must also pay overhead for their storefronts.

As a solution to the problem, Reyes, is promoting the training and licensing of street vendors. The idea is to regularize the merchants by assigning them spaces in a weekend market. Until now, however, only 80 vendors have reportedly signed up for the 120 available market spaces.

New Mexico is another state where the informal economy is on the uptick. Early this month, a joint law enforcement task force conducted an operation to dissuade vendors from selling illegal merchandise at two Albuquerque flea markets.

The sprawling, open-air markets are located in low-income sections of the city populated by many immigrants. One of the raided flea markets is also situated in the same property where a new casino is due to be built. High on the list of items of police interest were pirated movies and cosmetics. The officers did not make any arrests, but warned some sellers to desist from peddling illegal goods or confront the legal music next time. The participating law enforcement agencies included the Albuquerque Police Department, the New Mexico State Police and, notably, the Department of Homeland Security.

While flea markets have long enjoyed a presence in the Land of Enchantment, the bazaar-like gatherings have become more varied and sophisticated since the days when funky antiques, hokey turquoise jewelry and half-functioning household appliances served as the draw. Albuquerque’s underground economy extends beyond the weekend markets, with corner DVD and clothing vendors increasingly common sights scattered about the city’s streets.

Additional sources: San Francisco Chronicle/New York Times, January 11, 2012. Article by Jennifer Medina. KRQE.com, January 9, 2012. Article by Crystal Gutierrez. KOB.com, January 7, 2012. Article by Heather Mills.  

Frontera NorteSur: on-line, U.S.-Mexico border news
Center for Latin American and Border Studies
New Mexico State University
Las Cruces, New Mexico

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