Chicago’s “Maxwell Street Market”

The 120-year-old street vendor haven…

     In this article, we will look at research into the effect of shutting down the original Maxwell Street market in the early 1990’s. In the future, we will get into some of the history of Maxwell Street and other stories of interest.

     Fortunately, researchers were able conduct a few studies on several aspects of the famous year-round Chicago Maxwell Street Market where hundreds of street vendors sold every Sunday for about 120 years. Sadly, most of the research was done in the last few years of the existence of Maxwell Street before it was shut down.

     In a report titled “Utilizing the informal economy: the Case of Chicago’s Maxwell Street market”, the researchers of Balkin, Morales, and Presky attempt to show not only the financial loss to Chicago, but the intrinsic educational opportunity losses to the lower income families and immigrants in the neighborhoods.

     Financially, they first analyze the street vendor participation based on the markets capacity during the four seasons of operations. For example, they take into account that market is smaller during the cold Chicago windy winter months (40% capacity during January and February.) Secondly, they divide the vendors into four types to help calculate the street vendors’ weekly average sales. Marginal goods (20% earning $75 average). Specialty goods (40% with a$175 average sales). Low-margin new goods (30% averaging $350 a week). Lastly, high-margin new goods (10% of all vendors earning an average $800).

     The direct financial loss of closing Maxwell Street was anticipated to be minimally about $10 million (in 1994 dollars).

      They were able to demonstrate that shoppers consisted of both international tourists and interstate customers. They pointed out the “diverse cultural cooperation” of the multiethnic market population on a weekly bases was an immeasurable addition to the Chicago community.

      They were unable to calculate the financial loss to micro-entrepreneurs, wholesalers, and incubator businesses, the vendor’s personal investments in their own neighborhoods, and the cost of private school for the children. They were also unable to quantify the loss of education in money and lifelong business skills the next generation, e.g. bargaining skills, language translating, responsibility, and good work habits.

Reference

Balkin, S., Morales, A., Persky, J. (1994). Utilizing the informal economy: the case of Chicago's Maxwell Street market, (Working paper number 23). Tucson, Az., Mexican American studies and Research Center.

Street vendors and neighborhood

 businesses are

“Sold Out” 

http://www.citylimits.org/news/articles/2805/sold-out

In her article "Sold Out," Hilary Russ interviews store owners 16 months after the city of New York kicks out the street vendors in the Fulton Street neighborhood the year earlier. The city used helicopters, mounted police, and a special police task force in a one-day “raid” to remove the undesirable legally licensed and unlicensed vendors in the spring of 2001.

The police were acting on complaints by a real estate group and supposedly unidentified businesses. This is typical of many communities where the brick and mortar establishments often times do not “take to kindly” to the “good old fashion American free market” and lower priced competition. Some vendors do make bad impressions on the neighborhood, not demonstrating respect for their business or the neighborhood. Nevertheless, poor treatment of customers, leaving trash around, and dishonesty is found in even brick and mortar establishments or neighborhoods.

Sadly, most of the storeowners imply their incomes fell 20% after the vendor evictions. Often most cities do not fully understand the economies of agglomeration, despite the practice in every shopping mall in their own back yards.

Importantly, council member Alan Gerson makes three great suggestions on managing proper balance for street vendors. 1.“Identify the appropriate time, place and density for sidewalk vending; 2. work with vendors on-site to address sanitation or noise complaints; and 3. develop something he calls a "vendor benevolent society.” If that fails, consider putting them in a marketplace.”

A very well written article, which also quotes Professor Steve Balkin based on his in-depth studies in the original Chicago Maxwell Street Market on the many aspects of street vending. (We will review many of his papers as time allows.)

Reference

City Limits Magazine, September/October 2002, Sold Out by Hilary Russ.

http://www.citylimits.org/news/articles/2805/sold-out