Informal Street Vending Analysis

Informal Street Vending: A Parasite or a Blessing for Costa Rica’s Economy?

In analyzing the economic vigor of a particular nation it is important to include activities occurring in the informal sector. Although the informal economy exists in every country, its presence is particularly noticeable in developing nations and during times of global economic crisis. Therefore the study of the informal economy is crucial to understanding the employment patterns and availability for economic growth in Latin America, and more specifically in Costa Rica. Despite its importance, debate exists over exactly what defines the informal economy. Although the term is often used to refer to urban, unregulated, self-directed, small-scale, low-skilled, labor-intensive
Nine out of the 26 vendors reported that the money they made was always sufficient, and another five reported that it depended on the day. To put things into perspective, many of the vendors who reported that their earnings were not enough to cover bills often made only between 10,000 – 20,000 colones per day (approximately $20 - $40 per day). While these earnings may exclude people from traditional poverty measures, considering that the cost of living is high in Costa Rica, they are likely not enough to care for all of someone’s needs or to support a family. Yet the inability to make adequate profits does not seem to be based on a lack of skill by vendors. Rather the problem seems to be due to the negative stigma that the government of Costa Rica has given to street vending. Through my observations of the Central Avenue in San Jose, the phenomenon I noticed most was people hurrying past the vendors without addressing them or making eye contact. Although this may be due simply to a lack of time or interest, I argue instead that street vending is seen as negative to society. Out of the five interviews I conducted, only one of the vendors (an ocarina salesman) expressed a positive attitude towards both the police and the public. However I believe this was a special case for two reasons. The first reason was because he had been doing the job for 32 years and therefore was probably well known by people passing through the area. The second reason was that he told us people respected ocarina salesmen more than other vendors, as the tradition of selling ocarinas has a longer and more culturally relevant history. However for the majority of street vendors, negative social stigma coupled with incursion by the police leads to a tough reality in struggling to survive. Thus, the elimination of police harassment and the lifting of the ban against informal