Mexico City getting rid of popular street vendors Shop owners' ire drives them to malls

May 02, 1993|By Ginger Thompson | Ginger Thompson,Mexico City Bureau

MEXICO CITY -- Americans aren't the only ones worried abou losing business to low-cost operations in Mexico. Some Mexicans are hit by the same phenomenon.

And the conflict this has aroused threatens to put an end to the street vendors of handicrafts that attract many tourists here, and anyone else looking for a bargain.

Two Mexico City city businessmen -- Francisco Padilla Lopez and Guillermo Gazal Jafif -- illustrate the conflict that has sparked violence in Mexico City's historic central district.

Mr. Padilla is the president of a group of artisans who sell their handicrafts from small stands on the sidewalks in the city's main square. The members of his group like the freedom to produce and sell goods made by their own relatives and friends. And, because the minimum wage in Mexico is a little more than $3 a day, they can make more money selling goods on the street than they can working in a factory.

Mr. Gazal is president of a group of small shop owners in the same neighborhood. These shopkeepers are also proud of their stores and are struggling to make ends meet. They say the street vendors are in their way.

Like their counterparts on the streets of Baltimore, Washington and many other U.S. cities, the street vendors here pay no rent, no utility bills and no business taxes, so they are able to offer the same goods as the store owners, but at a much lower price.

This gives them unfair advantage, the shop owners say.

Here, this has led to violence. Last year street vendors were pelted with tomatoes and verbal abuse; other have been drenched with water or beaten by angry store owners.

Recently, Mr. Gazal called a news conference to complain about the street vendors. He sounded like a North American union leader talking about the threat of cheap labor in Mexico: "Everyday we are in a more precarious situation that is also contributing to the country's economic crisis."

But Mr. Padilla sees it as a matter of discrimination against the landless poor. "They say we don't pay taxes, but that's because we don't have rights to any land. We don't pay electricity because we don't have electricity. We have a right to support our families, and we should not be denied that right just because we can't afford to have our own store."

Now the Mexico City government has interceded with a compromise. By the end of July, the government hopes to relocate the estimated 10,000 street vendors off the sidewalks of the city's central district and into 12 enclosed malls. For a down payment of about $1,000, each street vendor will be able to buy a space in one of the malls.

"This is a good plan because it takes the street vendors out of the way of the store owners," said Jose de Jesus Martinez Juarez, an administrator involved with the the city's plan, "and it gives the street vendors a dignified place to do business."

Store owners say the move can't happen soon enough. And just to make sure the government doesn't back out, many have said they would withhold payment of their taxes and their dues for membership in various business groups until the street vendors are off the sidewalks in front of their businesses.

At recent groundbreaking ceremonies throughout the area, attended by top government officials, the street vendors cheered and applauded the new malls. But privately they grumbled that they are getting a bad deal.

It won't be the same, they say.

"Our sales are going to drop a lot," said Inocencio Vargas, a 30-year-old vendor of polished semiprecious stones whose wooden stand sits across the street from a jewelry store. "We sell by chance, meaning that people don't come here to shop. But when they see these pretty things, they buy them.

"In the mall," he said, "we will only get those customers who come to find certain things."

Salvador Linan Garcia, director of an institute that offers consulting services to small businesses throughout Mexico, says his clients are also skeptical that the plan will have any lasting success.

He says that unemployment continues to grow in Mexico City -- government statistics show that 400,000 new jobs have to be created annually simply to cope with the daunting population growth. And until wages are increased, people will continue to turn away from construction or factory jobs in favor of illegal commerce.

"They may move this group of street vendors into malls," he said. "But there will be thousands of others who come along to replace them."

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