The Gothamist has joined the know-nothing chorus in support of flooding the streets of the city with produce peddlers. The website begins with a quote from Intro 665 opponent John Liu: "The theory behind this bill is if you increase the supply, the demand will increase, and that's likely a faulty premise," Council Member John Liu of Queens said in an interview yesterday. "If there was demand, it's doubtful that the stores would simply refuse to address it." He called the legislation "wishful thinking," and warned it would eat into existing grocers' profits without providing its intended health benefits."
To which the Gothamist responds: "Actually, basic economics holds that increasing the supply of a product--even if demand is totally static--will increase the overall consumption of that product at a lower price. Who benefits from that growth in consumption and to what degree will depend on the price-sensitivity of consumers."
Such astute analysis! No discussion of what happens when outlets with considerable more overhead are forced to lower their costs to compete with street vendors. No discussion of the price elasticity of fresh produce. In fact, in Manhattan where peddlers have metastasized scores of green grocers were forced out of business. This, not increased consumption, is the more likely result of peddler proliferation.
In today's Metro this point on the effects of unfair competition is brought home by Sung Soo Kim: "Sung Soo Kim of the Small Business Congress, said that small grocers have seen their profit margins shrink from 25 percent down to 3 percent. “This is a crushing threat to their survival,” Kim said. He called for a moratorium on the vote, which is scheduled to go before the Consumer Affairs Committee tomorrow."