OPINION:
A Michigan teen and his mother are living in a shelter for the homeless after a city shut down the teen’s hot-dog stand. Thirteen-year-old Nathan Duszynski saved $2,500 to start his own business and then diligently secured permission from both the state and city hall to operate downtown. Nathan hoped to use the hot-dog cart to help support his parents, both of whom have serious health problems. So when the city of Holland closed him down 10 minutes after he opened, Nathan was devastated. Apparently, government officials had forgotten to tell Nathan that the city prohibits food-cart vendors from downtown. Why does it ban mobile food vendors from this area? To protect existing restaurants from competition.
The story has provoked disbelief and outrage across the country. In this sluggish economy, we should be encouraging entrepreneurship, not crushing it. Denying a teenager the opportunity to support his impoverished family is especially shocking. What few realize, however, is that the story is not an anomaly. Rather, it is just the latest example of the national trend of cities enacting and enforcing laws that make it nearly impossible for food-cart and food-truck vendors to earn an honest living.
These laws — found not just in small towns like Holland, but also in many of America’s major cities — are passed at the behest of politically connected brick-and-mortar restaurants to keep vendors as far away from restaurants as possible. Last week, for example, Chicago passed a law that will fine food trucks up to $2,000 for the crime of servicing customers within 200 feet of any brick-and-mortar restaurant.
Whatever happened to the “land of opportunity,” the place where a street vendor could work hard, save, buy another cart and put others to work as he worked to build his own enterprise? Businesses are supposed to compete with each other. Competition lowers prices and encourages business owners to come up with the best product possible — or in this case, the tastiest food possible. Under our Constitution, it is not the proper role of government to infringe upon its citizens’ economic liberty by passing laws that favor businesses with political power over those without that power.
The government has indeed assumed that role — in large part because courts have not been diligent enough in restraining the government from doing so. As a result, politicians regularly pass laws that have nothing to do with protecting the health or safety of their constituents and everything to do with naked economic protectionism. Politicians often do not even bother to cover up their ill-conceived motives with a credible pretext.
Take, for example, the argument that food carts and food trucks have an “unfair” advantage over restaurants. This argument is absurd. After all, unlike restaurants, vendors cannot operate when the weather is bad, and they cannot provide seating in a climate-controlled dining room for their customers. Nor can vendors get a liquor license — a big moneymaker for restaurants. Scarce space limits how much vendors can carry at once. And of course, food trucks have no guaranteed location. They have to struggle daily to find parking spots and must count on loyal customers to locate them through social media.
In short, if a restaurant cannot compete with a food truck or food cart under these conditions, the restaurant only has itself to blame.
Not only are laws aimed at protecting restaurants from food carts and trucks based on flawed logic, they also are counterproductive because they destroy the economic benefits that these vendors provide. These benefits include wealth creation, job creation, expanded consumer choice and an additional source of tax revenues for local governments. (In addition to paying sales tax, many vendors also pay property taxes or rent in order to maintain a commissary that serves as their base of operations.) Vendors also help other businesses, including restaurants, by encouraging more people to leave their offices or homes and walk along the streets — increasing foot traffic for all.
Cities shouldn’t deprive their local economies of these benefits to protect a few politically connected insiders. Until cities learn that lesson — a lesson that courts must reinforce by more rigorously protecting constitutional limits on government power — they will continue to stifle entrepreneurs like Nathan. Because the city of Holland blocked his path, Nathan lost the business he had planned to use to support his family, which is homeless now. The city clearly has lost its moral bearings.
Bert Gall and Erica Smith are attorneys with the Institute for Justice in Arlington.
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